Special Notice / Hearing: 10-Day Notice_
Vote Required: Majority
To: Honorable Board of Supervisors
From: Steve Monowitz, Director of Planning and Building
Subject: Consideration of a resolution amending San Mateo County Local Coastal Program Policy 1.23 to modify the method of calculating the average annual residential growth rate in specified circumstances and directing staff to submit the proposed amendment for Coastal Commission review and certification.
RECOMMENDATION:
title
Public hearing to consider adoption of a resolution amending the Local Coastal Program:
A) Open public hearing
B) Close public hearing
C) Adopt a resolution amending San Mateo County Local Coastal Program Policy 1.23 to modify the method of calculating the average annual residential growth rate in specified circumstances and directing staff to submit the proposed amendment for Coastal Commission review and certification.
body
BACKGROUND:
San Mateo County’s Local Coastal Program (LCP), which regulates land use and development in the County’s Coastal Zone, establishes an annual limit on the issuance of residential building permits in Policy 1.23. Originally, the LCP limited residential growth to 125 units per year. In 2006, the County proposed reducing this limit to 75 units per year (approximately a 2 percent growth rate) to lessen the burden on public services while still allowing for gradual infill housing.
However, the California Coastal Commission (CCC) subsequently determined that a 75-unit per year growth rate was too high because it would not slow growth enough to address infrastructure constraints. As a result, in 2012, the limit was ultimately reduced to 40 new units per calendar year (roughly a 1 percent growth rate, matching the adjacent City of Half Moon Bay).
Per the CCC 2009 Staff Report discussing the proposed LCP amendments, inadequate public infrastructure resulted in adverse effects on public health and safety and coastal access, necessitating limits to slow residential growth:
• Severe Traffic Congestion: Peak hour traffic on major access routes, specifically Highways 1 and 92, is constrained and sometimes operates at Level of Service (LOS) F, which indicates breakdown operations and significant delays. This congestion adversely impacts the public's ability to access the coast for recreation.
• Wastewater and Sewer Failures: The Intertie Pipeline System (IPS), which collects and delivers wastewater, suffers from inadequate transmission capacity and aged infrastructure. This has led to systemic untreated sewage overflows during wet weather, which pollute the environment and violate water quality standards.
• Water Supply Constraints: The region faces strained municipal water supplies, failing private wells, and heightened problems associated with the overdraft of groundwater basins.
Conditions and Exemptions
Per LCP Policy 1.23, the 40-unit annual limit cannot be changed until:
1. a comprehensive transportation management plan is incorporated into the LCP;
2. facilities are constructed that can adequately contain stormwater and prevent IPS sewage overflows; and
3. the growth rate is changed through an LCP amendment.
To ensure that the cap does not completely halt the development of affordable housing, there is some flexibility for affordable housing projects and second dwelling units under LCP Policy 1.23 d: if the 40-unit cap has been reached in a given year, permits for affordable housing and second units that are subject to income and cost/rent restrictions for the life of the units may still be issued, provided that the average growth rate over a three-year period that includes the year of building permit issuance and following two years does not exceed 40 units per year.
Until 2025, the County had never reached the 40-unit cap. However, with the issuance of building permits for the 71-unit Cypress Point Affordable Housing project in 2025, the 40-unit limit has been reached and exceeded by 62 units. LCP Policy 1.23, based on the three-year average, now limits the County to issuing building permits to just 18 new units in total during 2026 and 2027.
DISCUSSION:
A. KEY ISSUE
1. With the issuance of building permits for the 71-unit Cypress Point Affordable Housing project in 2025, the County issued a total of 102 building permits in 2025. As a result, based on the allowed average over three years, the County is limited to issuing building permits to just 18 new units over the next two years. This will lead to significant challenges, including:
a. A likely rush by applicants to submit permit applications on January 1, 2028.
b. A cascading overflow of permits to process in 2028 that may hit the cap for that year, and likely the next.
c. Initiation of an LCP amendment request to the Coastal Commission to increase the cap by at least 50 percent pursuant to Housing Element policy 11.6.
d. Pressure and potential imposition of penalties/de-certification of the Housing Element if the above amendment is not adopted.
e. Restricting future affordable/workforce housing developments like Cypress Point potentially until 2030 to allow processing of a backlog of permit applications.
f. Potential increased public opposition to and litigation over future affordable/workforce housing developments in the urban Midcoast due to potential consequences for other development projects.
2. In 2026, two residential building permits have been issued, and there are currently pending building permit applications for the remaining 16 residential building permits. After these 16 permits have been issued, the Department will not be able to issue residential building permits until January 1, 2028.
B. ALTERNATIVES
1. Meeting LCP Policy 1.23 requirements to increase the building permit cap.
The ultimate solution to the building permit limit is to seek Coastal Commission approval of an amendment to Policy 1.23.d to increase the annual permit cap, based on significant improvements in the relevant infrastructure.
The County has diligently worked towards addressing the critical infrastructure issues identified in LCP Policy 1.23 with the development of the Connect-the-Coastside (CTC) plan, that addresses transportation-related challenges. Several projects outlined in the CTC plan have been implemented, while planning for others is underway. The Half Moon Bay to El Granada bike trail has been completed. The County worked jointly with the City of Half Moon Bay to develop the Getting-there-Together Travel Demand Management (TDM) Plan, and planning for the safety and circulation improvements on SR-1 in Moss Beach is underway.
Since 2011, the Sewer Authority Mid-Coastside (SAM) has significantly improved the resilience of the Intertie Pipeline System (IPS) through a multi-phase reinforcement program designed to handle extreme weather and replace aging infrastructure. SAM has replaced or rehabilitated approximately 12,450 linear feet of pipeline with another 13,395 linear feet of pipeline to be replaced in 2027 with more resilient materials, removing holes and leaks in the IPS and preventing breaks. A new wet weather storage facility was installed in El Granada and upgraded in 2021 to hold 400,000 gallons of wastewater during storm events, allowing systemwide storage of a total of 834,000 gallons, substantially decreasing surge volumes and overflows. The SAM treatment plant was significantly expanded in 2000. As part of the 2023 SAM National Pollutant Discharge Elimination System (NPDES) permit renewal SAM demonstrated the ability of the plant to safely treat 3.71 million gallons per day (MGD) dry weather flows with the ability to handle 9.0 MGD and short-term bursts of up to 15 MGD of influent during major storm events. Winter effluent flows peaked at 2.486 MGD in February 2025, and the average dry weather flow was 1.1 million gallons per day. The treatment facility has more than enough capacity to serve the Midcoast in the future.
SAM is also dedicated to improving the IPS further. Future improvements that are under evaluation include an Electrical Relocation Building to protect critical controls from flooding, working with member agencies to reduce Infiltration and Inflow (I&I) rainwater that leaks into the system, which is the primary driver of surge volumes during storms, and Increasing the capacity of the northernmost wet weather storage facility (Walker Tank).
Half Moon Bay, the largest member of SAM by volume treated, completed a 2025 Wastewater Collection System Master Plan Update. The plan shows the results of modeling to predict the sites of overflows during heavy rain events. Future improvements are under consideration to prevent backups in the local system by upsizing pipes in key areas identified in the capacity constraint models.
In addition, the County’s newly adopted Stormwater Management Development Standards further reduce risks of stormwater runoff impacting water quality.
However, while these improvements position the County to request an increase in the building permit cap from the Coastal Commission, Coastal Commission review and approval processes for changes of this magnitude do not provide a short-term solution to the immediate strict limit on building permit issuance. Thus, to address this immediate need and retain the 40-unit cap, the proposed amendment modifies the method of calculating and staying within the one-percent growth rate, when approved affordable housing units exceed the 40-unit annual limit, as described below.
2. Changing how excess affordable housing units are averaged over subsequent years.
LCP Policy 1.23d allows for issuing building permits above the 40-unit/year cap for affordable housing and second units that are subject to income and cost/rent restrictions for the life of the units, provided that the average growth rate over a three-year period that includes the year of building permit issuance and following two years does not exceed 40 units per year.
With the exception of 2025, the County has never reached the 40 units/year cap since the building permit cap went into effect. The table below shows the number of new residential unit permits issued since 2013.
|
Year |
Total Units (Issued) |
Cap balance |
Affordable Units |
ADUs |
JADUs |
Other (SFR, Apts, Etc.) |
|
2026# |
2 |
16 |
0 |
1 |
0 |
0 |
|
2025 |
102 |
(62) |
71 |
18 |
1 |
12 |
|
2024 |
32 |
8 |
0 |
19 |
3 |
10 |
|
2023 |
29 |
11 |
0 |
18 |
3 |
8 |
|
2022 |
34 |
6 |
0 |
16 |
1 |
17 |
|
2021 |
24 |
16 |
0 |
13 |
0 |
11 |
|
2020 |
22 |
18 |
0 |
8 |
0 |
14 |
|
2019 |
30 |
10 |
0 |
14 |
0 |
16 |
|
2018 |
20 |
20 |
0 |
6 |
0 |
14 |
|
2017 |
13 |
27 |
0 |
1 |
0 |
12 |
|
2016 |
30 |
10 |
0 |
0 |
0 |
30 |
|
2015 |
23 |
17 |
0 |
2 |
0 |
21 |
|
2014 |
9 |
31 |
0 |
0 |
0 |
9 |
|
2013 |
2 |
38 |
0 |
0 |
0 |
2 |
|
Total |
372 |
166 |
71 |
117 |
8 |
176 |
|
Average |
28 |
12 |
5 |
8 |
1 |
13 |
|
#As of 05/08/2026. |
|
40-Unit Cap |
|
* Approved by BOS May 24, 2011 (Resolution No. 071395) |
|
* Certified by the CCC on August 8, 2012 (effective 30 days later) |
Since the County has over 166 unrealized building permits in aggregate since the inception of the permit cap, the Department is recommending a change in LCP Policy 1.23 d. (2) to average the excess number of affordable units across the previous years since imposition of the 40-unit cap, beginning January 1st, 2013. This allows the Department to capture the unrealized development potential of past years without limiting the ability to accept building permit applications and issue building permits for housing during 2026 and 2027.
The Department discussed this approach with Coastal Commission staff, who indicated their preliminary support and identified the possibility that the amendment could be processed as a minor or “de minimus” amendment, providing the most efficient option to alleviate the present challenge of halting the issuance of new residential building permits when the cap for 2026 is reached.
To that effect, the County is recommending the following existing LCP Policy 1.23 d. (italics added for emphasis):
“If the number of issued building permits for any given year has reached the 40-unit maximum, building permits for affordable housing, including second dwelling units, may still be issued under the following circumstances: (1) the units are “affordable” as defined by Section 6102.48.6 of the certified zoning regulations and subject to income and cost/rent restrictions for the life of the development; and (2) the growth rate average over the three-year period, that includes the year of building permit issuance and the following two years, does not exceed 40 units/year.”
To be replaced with the following provision (modified text shown in italics and underline):
“If the number of issued building permits for any given year has reached the 40-unit maximum, building permits for affordable housing, including second dwelling units, may still be issued under the following circumstances: (1) the units are “affordable” as defined by Section 6102.48.6 of the certified zoning regulations and subject to income and cost/rent restrictions for the life of the development; and (2) the annual average number of permits issued from January 1, 2013 (the year after the adoption of the growth limit was certified by the Coastal Commission) through and including the year of building permit issuance, does not exceed 40 units/year.”
This change will allow the Department to average out the excess 62 units from the Cypress Point 100 percent affordable housing project across the previous 12 years, bringing the average number of permits issued for new units in that 12-year period to 28.5 new units/year. This would allow the Department to continue issuing building permits for up to 40 new residences (including those already issued) in 2026 and each year thereafter.
C. HOUSING ELEMENT REQUIREMENTS
State Housing Law requires local jurisdictions to update their Housing Elements every eight years. During the California Department of Housing and Community Development’s (HCD) review of the most recent update to the County’s Housing Element, HCD identified the existing Midcoast growth limit as a concern, due to the impact that such quotas have on the need to address unmet housing demand. As a result, the County was required to include a policy to address this concern, as were jurisdictions with similar quotas, such as the City of Half Moon Bay.
Specifically, County Housing Element Policy 11.6, entitled Monitoring and Assessment of Urban Midcoast Permit Limit, states:
Monitor the annual issuance of permits for residential development in the County’s Urban Midcoast, and if the 40-unit limit on annual permit issuance poses a constraint to development during the Housing Element Period, amend the limit to allow additional permit issuance.
Lead: Planning and Building Department, Department of Housing Implementation
Target: Ongoing assessment of permit issuance in the Urban Midcoast throughout the Housing Element period, 2023-2031. If the limit is reached in any year of the period, draft amendments to raise the limit by at least 50 percent for local adoption and presentation to the California Coastal Commission within one calendar year.
The proposed amendment seeks to modify the way in which the current growth limit is implemented in a manner that will avoid the need for the County to seek Coastal Commission approval to raise the growth limit by at least fifty percent. To this end, the recommended changes modify the method of averaging the growth rate to ensure that affordable housing projects that go over the 40-unit annual limit will not exceed the one percent growth rate as averaged over the years since the 40-unit limit took effect. By making this change, the County will prevent the current limit from halting development and thereby avoid the requirement to seek a substantial increase in the growth rate.
D. PLANNING COMMISSION REVIEW AND RECOMMENDATION
On May 27, 2026, the Planning Commission voted to recommend that the Board of Supervisors adopt the resolution and submit the proposed amendment to the Local Coastal Program to the Coastal Commission.
E. PUBLIC OUTREACH
After the Planning Commission hearing, Planning and Building staff presented the proposed amendment to the MidCoast Community Council (MCC). The MCC identified the need for further review and analysis of the various options for addressing the current limit, including the option of making no change. In response, staff organized a community meeting on June 30th, 2026, where the issues, several alternatives, and the recommended amendment were presented and discussed. The meeting was well attended with approximately 110 to 130 people in person and via Zoom. The community meeting ended with an online survey wherein the attendees selected their preferred alternative, including one that maintained the status quo. The survey indicated a strong preference for the approach recommended by the Department and endorsed by the Planning Commission.
Following the community meeting, the Department presented the results of the community meeting to the MCC on July 22, 2026. The MCC deliberated on the alternatives, and the survey results, and voted in favor of the recommended alternative five to two (5-2). A primary reason why the MCC endorsed the proposed amendment was that the council members who voted in favor of it recognized that doing nothing would trigger Policy 11.6 of the Housing Element, which requires the County to propose an amendment to its Local Coastal Program to increase the number of allowable units if the 40-unit limit poses a constraint to development during the Housing Element Period. The MCC understood that the proposed amendment would allow the County to retain the 40-unit cap and avoid triggering actions by the State that would mandate an increase in the growth rate.
F. ENVIRONMENTAL IMPACT
Section 21080.9 of the California Public Resources Code (California Environmental Quality Act (CEQA)), exempts a local government from the requirements of CEQA in connection with its activities and approvals necessary for the preparation and adoption of a Local Coastal Program. Certification of an LCP by the Coastal Commission is subject to CEQA, and the Commission's LCP review and approval program has been found by the Resources Agency to be the functional equivalent of the environmental review required by CEQA, pursuant to CEQA Section 21080.5.
The County Attorney’s Office has reviewed and approved the resolution as to form.
COMMUNITY IMPACT:
The proposed amendment will allow residential building permits to be issued until the 40 unit/year limit is met for the years 2026 and 2027, rather than halting new permit applications until January 1, 2028. Allowing continued issuance of residential permits will help the County alleviate the ongoing countywide housing shortage, provide new housing opportunities for Midcoast residents and reduce the adverse impact that the current situation is having on Midcoast property owners and businesses.
FISCAL IMPACT:
The amendment will allow the County to process building permit applications for new residential units on the Mid Coast for the years 2026 and 2027. Allowing these projects to proceed will help address the region’s housing needs and result in an increase in property tax revenue.