HomeMy WebLinkAbout6.1 NonResImpactFee
SUBJECT:
ATTACHMENTS:
BACKGROUND
DOCUMENTS;
CITY CLERK
File # D~~[Q]-f8JQ]
)( ~O-~
AGENDA STATEMENT
CITY COUNCIL MEETING DATE: April 19, 2005
PA 01·039, Nonresidential Development Affordable Housing
Impact Fee Ordinance and Fee Resolution
Report Prepared by: Eddie Peabody, Community Development Director. if
and Pierce Macdonald, Associate Planner
I.
Ordinance adding Chapter 7.86 of the Dublin Municipal
Code Establishing a Nonresidential Development Affordable
Housing hopaet Fee
Resolution Adopting a Nonresidential Development Affordable
Housing hop act Fee Amount for Future Development in the City of
Dublin without Exemptions
Resolution Adopting a Nonresidential Development Affordable
Housing Impact Fee Amount for Future Development in the City of
Dublin with Exemptions
The Nonresidential Development Affordable Housing hopaet Fcc
Study, dated March 25, 2005
Notice ofIntent to Adopt Development Fee to Mitigate the Impacts
of Nonresidential Development on the Affordability of Housing in
the City of Dublin, published September 22,2001
City Council Agenda Statement and Meeting Minutes for October
21,2003
City Council Agenda Statement and Meeting Minutes for October
19,2004
Current Comparable Fees of Other Jurisdictions
City Council Resolution 18-01 Adopting the Affordable Housing
Implementation Plan
City Council Resolution 173-01 Expressing the City's Intent to
Adopt Development Fee to Mitigate the hopacts of Non-Residential
Development on the Affordabjlity of Housing in the City of Dublin
2.
3.
4.
5.
6.
7.
8.
9.
10.
The following documents will be available at the City Council
Meeting:
a. General Plan
b. General Plan Housing Element Update
c. Downtown Core Specific Plan
d. West Dublin BART Specific Plan
c. Village Parkway Specific Plan
f. Downtown Specific Plan
____________R._.~~________~_________________________.W-_.___w________..______________~_______~_.._~..~__._.__
COPIES TO:
In-House Distribution
Task Force Mcm0.1
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ITEM NO.
G:\PAN\200J\0I-039 Commer<lal Llnk\2005\CCSR 4-19·05.00C
RECOMMENDATION:
~
g. San Ramon Boulevard Specific Plan
h. Eastern Dublin Specific Plan
1.
2.
3.
4.
Open Public Hearing;
Receive the Staffprescntation and public testimony;
Close the Public Hearing and deliberate;
Waive the Reading and Introduce an Ordinance Adding
Chapter 7.86 of the Dublin Municipal Code Establishing a
Nonresidential Development Affordable Housing Impact
Fee; and
Take action on one of the following items:
A. Adopt Resolution Establishing Nonresidential
Development Affordable Housing Impact Fee
Amount for Future Development in the City of
Dublin without Exemotions (Attaclnnent 2); or
B. Adopt Resolution Establishing Nonresidential
Development Affordable HousiJJg Impact Fee
Amount for Future Development in the City of
Dublin with Exemptions (Attachment 3).
5.
The Nonresidential Development Affordable Housing Impact Fcc
will be used to finance affordable housing programs pursuant to the
Affordable Housing Implementation Plan to further the goa]s ofthe
Dublin General Plan Housing Element. Based on the projected
development of new commercial floor area in the City (to build-out
of the City in 2025), the total estimated cost of affordable housing
linked to commercial development is $ 83,016,877 and the
Nonresidential Development fee has been sized to collect an
estimatcd$ 6,048,438 in fee payments to provide affordable housing.
FINANCIAL STATEMENT:
DESCRIPTION:
Background:
On February 6,2001, the City Council adopted an Affordable Housing Implementation Plan that included
program and funding options (included as Attachment 9). One funding option was to implement a
commercial linkage fcc, also known as a nonresidential development affordable housing impact fee. After
discussion of the Affordable Housing Implementation Plan, as a whole, the City Council passed a motion
on February 6,2001 to direct Staff to undcrtake the study of a possible commercial linkage fee.
On August 21, 2001, the City Council approved ofa preparation ora study lor a commercial linkage tee.
On October 2,2001, the City Council passed Resolution No.173-01 (Attachment 10) expressing the intent
ofthe City to adopt a development fee to mitigate the impacts of nonresidential development on the
affordabilily of housing in the City or Dublin. The purpose of the resolution was to alert developers and
interested parties that applications for discretionary permits submitted after the passing of the resollltion
but before the adoption ofthe fee could be subject to a Nonresidential Development Affordablc Housing
Impact Fee (Fee).
The City Council formed a Nonresidential Affordable Housing Task Force to meet with Staff and the
City's consultants to provide input related to a potential commercial linkage fee. The Task Force was
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constituted of Dublin residents, businesspeople, developers, one member of the Dublin City Council, and
one member of thc Planning Commission.
The Task Force held its first meeting on December 13,2001. Delays in the release of detailed Census
2000 housing and income information caused the Task Force to cease working for over one year. The
customized report preparcd by the U.S. Census Bureau for the Fee Study was releascd in May of2003.
The Task Force met on July 31,2003 to review the preliminary findings. On September 4,2003, the Task
Force reviewed the Draft Nonresidential Devclopment Affordable Housing Impact Fee Study (Fee Study)
and agreed to forward a recommendation to the City Council that the City Council adopt a Nonresidential
Dcvelopment Affordable Housing Impact Fee (see Fee Study included as Attachment 4).
On October 21, 2003, the City Council considered the recommendation of the Task Force to adopt a Fee
limited to $1 per square foot of commercial area (see Agenda Statement and Meeting Minutes for October
21,2003 included as Attachment 6). Members of the development community addressed the Council and
expressed opposition to the Fee, stating that the Fcc would be a burden to new development and could
reduce the attractiveness of Dublin as the site of future development Also, concerns were expressed
regarding the City's economic climate, as well as the fairness of how to share the responsibility of
affordable housing between residential and nonresidential development The City Council approved a
motion to table the discussion for one year.
On October 19,2004, the City Council passed a motion to take the item off of "the table" and considered
the Nonresidcntial Dcvelopment Affordable Housing Impact Fee Study once more (see Agenda Statcment
and Meeting Minutes for October 19, 2004 included as Attachment 7). City Council passed a motion
directing Staffto proceed with preparation of a draft Fee Ordinance and/or Fee Resolution.
The Nonresidential Development Affordable Housing Impact Fee Study (Attachment 4» and the Task
Force's recommendation are presented and discussed below. The Fee Study was updated on March 25,
2005 to include definitions of the facilities that are subject to the fee, as well as to correct formatting
errors. Stafrs analysis includes the Fee Study's legal requirements, methodology, and maximum
justifiable fees; the Task Force's recommendation; the draft Fee Ordinance (Attachment 1) and Fee
Resolutions (Attachments 2 and 3); and, current projects that may be subject to the Fee.
ANALYSIS:
Authority to Adopt a Nonresidential Development Affordable Hou.çing Pee:
Commercial affordable housing impact fees are subject to two overlapping sets of legal requirements, both
Federal constitutional requirements and California state law requirements, codified as the Mitigation Fee
Act (AB 1600).
The Federal constitutional requirements were addressed in Commercial Builders o.fNorthern California v.
City of Sacramento 941 F.2d 872. In that case, the Ninth Circuit Court of Appeals upheld a fee identical
to the proposed fee against a ehallcnge that the fee violated the Takings Clause of the U.S. Constitution.
The Mitigation Fee Act (also known as AB 1600) requires that the City make certain findings prior to
imposing any development impact fee, such as the nonresidential development affordable housing lee
proposed by the Fee Study. The required findings are as follows:
(I) Identify the purpose of the fce.
(2) Identify the use to which the fee is to be put. If the use is financing public facilities, the
facilities shall be identified.
(3) Determine how there is a reasonable relationship between thc fee's use and the type of
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development project on which the fee is imposed.
(4) Determine how there is a reasonable relationship between the need for the public facility and
the type of development project on which the tee is imposed.
The Fee Study (Attachment 4) provides the support to make these findings. A full discussion of the legal
requirements can be found on pages 3 and 4 ofthe Fee Study.
Proposed Fee:
The Nonresidential Dcvelopment Affordable Housing Impact Fee is proposed as a mechanism to fund
housing affordable to persons in the income category of those who will work in the new nonresidential
(i.e. commercial) development in Dublin. The Fee would be applied to new nonresidential development
in Dublin not otherwise exempted by prior agreement. New development is dcfined to mean new
construction and additions to existing buildings (such as building expansions).
Methodology:
To establish the link between non-residential development and affordable housing, a Nonresidential
Development Affordable Housing Impact Fee Study was prepared by the Nonresidential Affordable
Housing Task Force in consultation with City Staff, dated October 21,2003 and updated March 25, 2005
by City Staff. Based on a survey of reecntly completed commercial linkage fee studies in Northern
Californian (Oakland, Plcasanton, Livermore, Sonoma County, Menlo Park, and Mountain View), the
Task Force and Staff developed a five-step approach to examining the relationship between new
nonresidential development in Dublin and the demand and cost of producing affordablc housing. Thc
methodology is summarized below.
Step I:
Step 2:
Step 3:
Step 4:
Step 5:
Determine total employees generated by future nonresidential development based on
employment generation rates for projected land uses in Dublin.
Calculate the distribution of householder earnings and household income generated from
jobs/industries likely to migrate into thc Tri-Val1ey area.
Determine the number of employees by income and earnings generated by land use
designation who would be likely to seek housing in Dublin.
Determine the cost of producing market rate single-family rcsidenees and apartments, and
determine the gap between that cost and what very low, low, and moderate income
households could afford to pay for such housing (known as the "afford ability gap").
Determine the maximum impact fee per square foot by multiplying employment generation
factors by the affordability gap for households of different income levels, and by the
contribution of the Tnclusionary Zoning Ordinance housing program, and lastly, to examine
the feasibility ofthe impact fee(s).
Fee Study Findings:
As detailed in Chapters 2 and 3 ofthe Fee Study, a strong demand for housing in Dublin, fueled in part by
strong employment growth in the Tn-VaHey region, has resulted in a growing gap betwccn housing costs
and the ability of area workers to afford housing. While median housing costs increased between 55 and
120 percent from 1990 to 2000, dcpending on the type of housing, the median income in Dublin increased
by 44 percent (additional detail is ineluded in Chart 2- J and page 2-2 of the Fee Study, Attaclunent 4).
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According to the .Fee Study, the City of Dublin has the potential to create 30,120 additional jobs between
2005 and 2025. It is expected that a significant percentage of these jobs will be filled by individuals
living in very low-, low, and moderate~income households. These households experience thc greatest
difficulties in finding affordable housing in Dublin.
A portion ofthe future affordable housing need will be met through the City's Inclusionary Zoning
Ordinance program, in which 12.5 percent ofilew housing units constructed in Dublin must be affordable
to very low-, low-, and moderate-income households. Nevertheless, a significant gap will rcmain between
the need and demand for affordable housing in Dublin and the number of affordable housing units
available to very low-, low-, and moderate-income residents. One method of bridging the gap is to charge
an affordable housing fee to nonresidential developments. The Fee Study defined nonresidential
development as accommodations and services, light industrial, office, research and developmcnt and
retail.
Nonresidential developments create employment that generates a need and demand for affordable housing
based on the anticipated income levels ofthe workforce employed in those developments. Revenues from
the affordable housing fee would be used to build, subsidize, and rehabilitate housing in Dublin that very
low-, low-, and moderate-income households can rent or own. All Fees collected would be used to
implement the City's Affordable Housing Implementation Plan (Attachment 9).
Maximum Justifiable Fee:
Based on the Fee Study methodology described above, the maximum justifiable fee for the various
nonresidential businesses projected to locate in Dublin ranges from $4.70 pcr squarc foot of nonresidential
floor area to $ 13.72 per square foot The Task Force did not calculate a fee for Public/Semi~Publie laud
uses which include facilities such as schools, religious institutions, hospitals, community centers, and
others because these uses provide benefits to the community that off-set the need for affordable housing
created by the facilities.
The original Fee Study, dated October 21,2003, omitted a section of the report providing definitions for
the fee categories uscd in the Fee Study which was corrected in the updated Fee Study, dated March 25,
2005 (Attachment 4). In addition, the updated Fee Study used current development projections; removed
the "Commercial" fee category to improve implementation ofthe fee program; and consolidated the
"Office" and "Corporate Headquarters" categories, as the definitions and fec amounts were identical. The
maximum justifiable fees are outlined in Chart 3-12 ofthe Fee Study, reproduced below:
Table 1: Chart 3-12, Maximum Justifiable Fees
Future Land Use Building Size (KSF1)
Maximum Fee
Li t Industrial
Office
R&D
Retail
Svcs/ Accommodations
Total
840.37
5,303.5 (-1,462.7)'
985.5(- 860.5)
2,633.13 (- 696.7)'
--.
1,012.52 (-299.74)
$ 5.46
$ 13.72
$ 8.81
$ 10.99
$ 4.70
I KSF symbol denotes 1,000 square fect of floor area.
2 The number in parentheses represents the square footage exempted fTom the fee as part of Fairway Ranch. On July 15,2003,
the Cily Council approved !he Fairway Ranch project, which waived any potential commercial linkage fees for cOIl1II1Crcial
development in Dublin Ranch. Thc tces were waived as part of the Fairway Ranch development agreement to build affordable
housing in excess ofInclusiona!)' Zoning Ordinance requirements.
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However, the Task Force found that most cities surveyed adopted impact fees that wcre a fraction of the
maximum justifiable fee (see Chart 3-10 in the Fee Study for compaTable maximum justifiable fees).
Based on the Task Force's rcview and recommendation, the attached draft Pee Resolutions (Attachments
2 and 3) caps the Pee at $1 for office development and reduces the other categories of development by the
same percentage (7.28 percent). The recommended fees are swnmarized in Table 2, Chart 3-13 of the Fee
Study, below. Chart 3-13 also reflects the projected amount ofrevenue expected to be geneTated by the
proposed fee per category from now to build-out of the City in the year 2025.
Table 2: Chart 3-D, Recommended Fee
Future Land Uses Total Projected
Building Size to
Year 2025 (KSF)
840.37
3,840.8
125
1,936.43
712.78
7,455.38
Fee Amount
Future Anticipated
Impact Fee
Payments
$ 336,148
$ 3,840,800
$ 80,000
$ 1,549,144
$ 242,346
$ 6,048,438 _,,"_
Light Industrial
Office
R&D
Retail
Svesl Accommodations
Tota1:
$ .40
$ 1.00
$ .64
$ .80
$ .34
.
Procedure for Applying Fee to New Development:
The Nonresidential Development Affordable Housing In1pact Fee would be imposed on proposed
development projects that involve discretionary action for approval. Discretionary action means the
excrcise of judgment or deliberation at the time that the City decides to approve, conditionally approve, or
deny a project. Examples include Site Development Review and Conditional Use Permit applications.
The appropriate Fcc would be collected for all nonresidential development including new buildings and
expansion of existing buildings. Building expansions of 500 squarc fect or less would be exempted from
the Fee. Thc Fecs would be collected at the time of the first building permit issuance according to the
types of development specified in the Nonresidential Development Affordable Housing Impact Fee
Resolutions (Attachments 2 and 3), as established by the Fee Study.
During application review and prior to issuance of building permits, the Applicant/Developer normally
requests an estimate of appropriate fees, which would include the Nonresidential Development Affordable
Housing Impact Fee. City Staff would ealeulate the Fee based on the new, gross floor area ofthe facility
as defined in the Dublin Zoning Ordinance, and the Fee Category that is most appropriate to the typc of
use proposed, except for those cases when a use does not fit a particular fee category. The following
scenarios describe the process under specific conditions:
.
Scenario 1; An application is received for a new shopping ecnter, consisting of a major retail
tenant (60,000 square feet) surrounded by smaller retail (20,000 square feet), service (10,000
square feet) and restaurant leaseholds (12,000 square feet). The ApplieantlDeveloper requests an
estimate ofthe Nonresidential Development ACTordable Housing Impact Fee from City Staff. City
Stafr calculate the total gross floor area for the center at 80,000 square feet at the retail fee
category ($ .80); and 22,000 square feet at the services and acconunodations fee category ($ .34),
based on the definition of the fec eategorics in the Nonresidential Development Affordable
Housing Impact Fee Resolution and the definition of gross floor area in the Dublin Zoning
Ordinance. The Fee estimate would total $71,480, which would be due prior to issuance of the
fïrst building permit.
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Scenario 2: An application is received for a 450-square-foot expansion to an existing
neighborhood restaurant. The Applieant/Developcr requests an estimate of the Nonresidcntial
Development Affordable Housing Impact Fee from City Staff. City Staff note that the expansion
is less than 500 square feet, based on the definition of gross noor area in thc Dublin Zoning
Ordinance, and, therefore, it is exempted from the Nonrcsidential Development Affordable
Housing Impact Fee. The Fee estimate would total S 0.00.
The Community Dcvelopment Dircetor would determine the appropriate employee density rate and
subsequent Fee for any use that is not listed on the Fee Resolutions (Attachments 2 and 3). Employee
density rates would be deternlined by the Community Development Director bascd on appropriate
numbers of employees per square foot of floor arca contained in Institute of Transportation Engineers Trip
Generation Manual, San Diego Association of Governments Trip Generator Study, or other data sources.
Scenario 3, below, describes the process under (hese conditions:
Scenario 3: An application is received for a new soccer stadium, and the AppljcantlDeveloper
requests an estimate ofthe Nonresidential Development Affordablc Housing Impact Fce from City
Staff. City Staff calculatc thc gross floor area for the stadium at 100,000 square feet, based on thc
definition of gross floor area in the Dublin Zoning Ordinance. There is no fee category for
stadiums included in the Fee Resolutions, Attachments 2 and 3. Although the Fcc Study does
inelude ineomc information for persons employed in the Service industry, the Fee Study does not
inelude an employee density rate for stadiums. The Community Development Director would
have (he authority to calculate the appropriate employee dcnsity rate for an individual usc that is
not specifically listed in the Fee Resolutions. Employee density rates wil1 be determined from
sources such as the City of Dublin Community Development Department; the Institute of
Transportation Engineers Trip Generation Manual, 5th Edition, 1997; the San Diego Association of
Governments Trip Generator Study; or other sources as dcemed appropriatc by the Community
Development Director.
.
Use of Fee Revenue:
The revcnucs raised by payment of the Nonresidential Development Affordable Housing Impact Fee will
be placed in a separate Nonresidential Affordable Housing Fund ("Fund"). A Fund account will be used
(0 account for such revenues, along with any interest earnings on the account. The Fee revenues (and
earned interest) will be used for the following purposes, per the Affordable Housing Implementation Plan,
adopted by City Council on February 6, 2001 (Attachment 9):
Priority 1: Acquisition-Rehabilitation of Housing
Priority 2: Construction of New Affordable Multi-Family Units
Priority 3: Down Payment Assistance
Priority 4: Rental Assistance
Pipeline Projects:
At its last meeting on September 4,2003, the Nonresidential Development Affordable Housing Impact
Fee Task Force recommended that the City Council consider excmpting "pipeline" projects, which arc
projects that arc currently under review by the City of Dublin for permits and other land use entitlements.
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Thc Task Porcc recommended that thc City Council consider exempting projects that are under review
because Applicants may not have anticipated the additional costs of payment of the Nonresidential
Dcvelopment Affordable Housing Fee. However, on October 2,2001, the City Council passed a
Resolution that put all current and future Applicants on notice ofthe Council's intent to adopt a
development fee to mitigate the impacts of nonresidential development on the afforoability of housing in
Dublin. The resolution allows the City to require payment of the Pee for those project applications
deemed complete after October 2,2001 as long as the Fee is effective before a building permit is issued.
This Agenda Statement ineludes two versions ofthe Fee Resolution (Attaelunents 2 and 3). The
Nonresidential Development Affordable Housing Impact Fee Resolution included as Attachment 2 does
not exempt any pipeline projects. The Nonresidential Development Affordable Housing Impact Fee
Resolution included as Attachment 3 does exempt pipeline projects that have applications for final
discretionary land usc approvals (normally a Site Development Review) that were deemed completed
before the effective date of the Pee Resolution. Table 3, below, provides information on current project
applications that mayor may not be deemed completed prior to the effective date of the Fcc Resolution
and, therefore, may be exempted by the Resolution as drafted in Attachment 3.
Tablc 3; Current Commercial Pipeline PrO.lects
Project Name Type Size Poteutial Application
Payment Status
Enea Village Office I Ofllce ($1) 5,707 $ 5,707 SOR Approved
GM Hummer 2 Retail ($.80) 9,500 $ 7,600 SOR Complctc
GM Saturn 2 Retail ($.80) 23,000 $ 18,400 SOR Complete
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Ikea] Retail ($.80) 265,842 $ 212,674 SOR Approved
lkea/Blake Hunt Retail' Retail ($.80) 109,360 $ 87,488 1'0 Approved
lkea/Blake Hunt Restaurant' Services and 25,860 $ 8,792 I'D Approved
Accommodations ($.34)
Koll/Gateway Phase I 2 Office ($1) 120,000 $ 120,000 SOR Approved
KolllGateway Phase II 2 Office ($1) 58,849 $ 58,849 SOR Approved
--~,,~,-~,
Legacy/AMB Office 4 Office ($1) 150,500 $ 150,500 SDR Approved
-.- . R&O ($.64) $ 80,000
Micro Dental Labs Phase II 2 125,000 PO Approved
New Dublin Place Leasehold I Retail ($ .80) 17,000 $ 13,600 Pre-application
See's Candies I Retail ($.80) 7,905 $ 6,324 SOR Complete
Shamrock Village Retail ($.80) 3,000 $ 2,400 SOR Approvcd
... _~_w
Tralee Pak-n-Sav I Rctail ($.80) 35,000 $ 28,000 SOR Approved
Transit Center Commercial Retail ($.80) 15,000 $ 12,000 SOR Approved
Avalon Bay" ,--
West Dublin BART Hotel' Services and 79,500 $ 27,030 PO Approvcd
Accommodations ($.34) .---
West Dublin BART Services and 7,500 $ 2,550 PD Approved
Restaurant ' Accommodations ($.34)
__..0·'
TOTAL $841,914
L................ ..
I Projects may be subject to Fee because no Development Agreement exists.
1 Projects may be subject to Fee because tenn of Development ^h'Tccmcnt has expired.
, Projects may be subject to the Fee because under the Conditions of Approval, Project's Developer is liable 10 pay all
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applicable t~es in effect at the time of building permit issuance::.
4 Project may be subject to Fcc because Developer explicitly agreed to pay the Fee.
If pipeline projects were to be exempted in the Nonresidential Development Affordable Housing Impact
Fee Resolution, Staff would expect that approximately $ 841,914 in fees would not be deposited into the
Nonresidential Affordable Housing Fund and would not be available for use to implement the Affordable
Housing Implementation Plan. These Fees would be available if the pipeline projects were not exempted,
provided that the Fees did not deter property owners from proceeding with their projects.
Public Review:
A public hearing notice for this item was advertised in the VaHey Times 14 days prior to the City Couneil
meeting date and posted at several locations throughout the City. In addition, a courtesy notice was sent
to all persons requesting notice of fee increases and to all commercial real estate developers including the
Applicants/Developers responsible for the projects included in Table 3, to make them aware of the
pending City Council consideration. As of the writing of this report, no comments have been received by
City Staff.
ENVIRONMENTAL REVIEW:
The proposed Nonrcsidential Development Affordable Housing Impact Fee Ordinance and Fee
Resolutions would facilitate the collection offees ITom new development to implement the Affordable
Housing Implementation Program to provide affordable housing to Dublin workers. Establishment of the
Nonresidential Development Affordable Housing Impact Fce Ordinance and Fee Resolutions does not
constitute a discretionary approval of any application to build or construct any residential or nonresidential
project. Therefore, the Impact Fee does not cause physical changes to the environment. Thereforc it is
not a "project" according to the CEQA Guidelines; and, it is exempt from environmental review pursuant
to CEQA Section 15061.b(3).
CONCLUSION:
A draft Nonresidential Development Affordable Housing Impact Fee Ordinance and draft Fee Resolutions
have been prepared for City Council consideration. The Ordinance and Resolutions are based on the
findings of the Nonresidential Development Affordable Housing Impact Fee Study completed in October
of 2003 by a Task Force appointed by City Council, and updated March 25, 2005 by City Staff to correct
minor formatting errors. Two versions ofthe Fee Resolution arc ineluded for City Council consideration:
one Resolution (Attachment 2) would not exempt projects that have been deemed complete since the
adoption ofthe Resolution expressing the City's intent to adopt the development fec by City Council in
2001; and, a second, alternative Fee Resolution (Attachment 3) would exempt these projects, also called
"pipeline" projects. The Resolution in Attachment 3 would apply the Fee to project applications deemed
complete after the effective date of the Resolution. The Ordinance and Fee Resolutions comply with State
ofCaljfomia and federal law. The Fee would be effective 60 days following adoption of the Resolution.
RECOMMENDATION:
Staff recommends that the City Council I) open Public Hearing; 2) receive the Staff presentation and
public testimony; 3) elose the Public Hearing and deliberate; 4) waive the Reading and introduce an
Ordinance of the City of Dublin Adding Chapter 7.86 of the Dublin Municipal Code Establishing a
Nonresidential Development Affordable Housing Impact Fee; and 5) take action on one of the following
items: A) adopt a Resolution Adopting a Nonresidential Development Affordable Housing Impact Fee
Amount for Future Development in the City of Dublin without Exemptions (Attachment 2); or B) adopt a
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Resolution Establishing Nonresidential Development Affordable Housing Impact Fee Amount for Future
Development in the City of Dublin with Exemptions (Attachment 3).
10 'D\ 0
I Gb 1oC\
D~rT
ORDINANCE NO. - 05
AN ORDINANCE OF THE CITY OF DUBLIN ADDING CHAPTER 7.86 OF THE
DUBLIN MUNICIPAL CODE ESTABLISHING A NONRESIDENTIAL
DEVELOPMENT AFFORDABLE HOUSING IMPACT FEE
The City Council ofthe City of Dublin does hereby ordain as follows:
Section 1.
Findings: The City of Dublin finds that:
A. The citizens of Dublin are experiencing a housing shortage for very low-, low-
and moderate-income households.
B. A goal of the Housing Element of the City's General Plan is to achieve a balanced
community with housing available for households of a range of income levels.
C. Persons with very low-, low-, and moderate-incomes that currently live and/or
work in the City are increasingly unable to locate housing at prices they can afford, and oftcn
become excluded fÌom living in the City.
D. Federal and State housing subsidy programs are insufficient by themselvcs to
satisfy the housing needs of very low-, low- and moderate-income households.
E. The newly constructed housing market does not, to any appreciable extent,
provide housing affordable by very low-, low-, and moderate-income households, except as
required by the City's Inclusionary Zoning Regulations, and continued new nonresidential
development that does not include affordable housing to meet such demand will serve to further
aggravate the current housing shortage by reducing the supply of developable land.
F. Increased nonresidential development has the effect of creating an increased
demand for affordable housing.
G. The courts have upheld fees imposed on nonresidential development to mitigate
the impacts of such development on the affordabjlity of housing based on studies that
demonstrate the relationship between nonresidential development and an increased demand for
affordable housing.
H. It is a public purpose of the City, and a public policy of the State as mandated by
the requirements ofthe Housing Element of the City's General Plan, to make available an
adcquate supply of housing for persons of all economic segments of the community. To that
end, the Council adopts this ordinance.
Page' 013
to, \ 1.\-\0. -ö6
ATTACHMENT I
"Z.Db\..QÜ¡
Section 2. Addition of Chapter 7.86 to Municipal Code. Chapter 7.86, entitled
"Nonresidential Development Affordable Housing Impact Fee," is added to the Dublin
Municipal Code to read as follows:
CHAPTER 7.86
NONRESIDENTIAL DEVELOPMENT AFFORDABLE HOUSING
IMP ACT FEE
7.86.10
Purpose. The Purpose of this chapter is to:
In order to implement goals and objectives of the City of Dublin's General Plan and Specific
Plans, and to mitigate the impacts caused by future development in the City, affordable housing
units must be constructed. The City Council has determined that a nonresidential development
affordable housing impact fee is needed in order to finance affordable housing at income levels
affordable to the workforce for such nonresidential developments, and to pay for each
nonresidential developer's fair share of the construction and acquisition costs of such affordable
housing. In establishing the fee described in the following sections, the City Council has found
the fee to be eonsistcut with its General Plan and Specific Plans and, pursuant to Government
Code Section 65913.2, has considered the effects ofthe fee with respect to the City's housing
needs as established in the Housing Element of the General Plan. The goal of this chapter is to
impose a fee on new nonresidential development that funds or partially funds the need for
affordable housing created by the workforce of this new development.
7.86.20
Nonresidential Development Affordable Housing Impact Fee Established.
A. A nonresidential development affordable housing fee ("fee") is established to pay for
housing affordable to households of very low, low and moderate income.
B. The City Council shall, in a Council resolution adopted after a duly noticed public
hearing, /Tom time to time set forth the amount of the fee, identify the purpose ofthe fee and the
use to which the fee is to be put, and, determine how there is a reasonable relationship between
the fee's use and the need for affordable housing and determine how there is a reasonable
relationship between the amount ofthe fee and the cost ofthe affordable housing.
7.86.030 Use of fee revenues.
A. The revenues raised by payment of the nonresidential development affordable housing
impact fee shall be accounted for in the City's Affordable Housing Fund. Separate and special
accounts within the fund shall be used to account for revenues, along with any interest earnings
on such account. These monies shall be used solely to increase the supply of housing affordable
to households of very low, low and moderate income.
Section 3. Compliance with California Environmental Quality Act ("CEQA '): The City
Council declares that this ordinance is exempt from CEQA based on the following findings:
This ordinance is not a ''project'' within the meaning of Section 15378 of the State CEQA
Guidelines, because it has no potential for resulting in physical change in the environment,
directly or ultimately. This ordinance does not, in itself, allow the construction of any building
Page 2 of 3
3 ~LOÜ¡
or structure. This ordinance, therefore, has no potential for resulting in physical change in the
environment, directly or ultimately.
Section 4. Severability: In the event any section or portion of this ordinance shall be
determined invalid or unconstitutional, such section or portion shall be deemed severable and all
other sections or portions hereof shall remain in full force and effect.
Section 5. Savings Clause: All code provisions, ordinances, and parts of ordinances in
conflict with the provisions ofthis chapter are repealed. The provisions of this chapter, insofar as
they are substantially the same as existing code provisions relating to the same subject matter
shall be construed as restatements and continuations thereof and not as new enactments. With
respect, however, to violations, rights accrued, liabilities accrued, or appeals taken, prior to the
effective date of this ordinance, under any chapter, ordinance, or part of an ordinance shall be
deemed to remain in full force for the purpose of sustaining any proper suit, action, or other
proceedings, with respect to any such violation, right, liability or appeal.
Section 6. Effective Date and Posting of Ordinance: This ordinance shall take effect and be in
force thirty (30) days from and after the date of its passage. The City Clerk ofthe City of Dublin
shall cause the Ordinance to be posted in at least three (3) public places in the City of Dublin in
accordance with Section 36933 of the Government Code ofthe State of California.
PASSED AND ADOPTED BYthc City Council of the City of Dublin, on this _day of
, 2005, by the following votes:
AYES:
NOES:
ABSENT:
ABSTAIN:
MAYOR
ATTEST:
CITY CLERK
733689vl :114.3001
Page 3 of 3
y DO \.DC¡
RESOLUTION NO. -05
A RESOLUTION OF THE CITY COUNCIL
OF THE CITY OF DUBLIN
*********
ADOPTING A NONRESIDENTIAL DEVELOPMENT AFFORDABLE HOUSING IMPACT
FEE FOR FUTURE DEVEI"OPMENT IN
TilE CITY OF DUBLIN
RECITAI_S
WHEREAS, the City Council has adoptcd Dublin Municipal Code Chapter 7.86 creating and
establishing the authority for imposing and charging a Nonresidential Dcvelopment AJlordable
Housing Impact Fee ("Fee") to mitigate the impacts of nonresidential development on the
affordability of housing within the jurisdictional limits of the City of Dublin; and
WHEREAS, on Oetobcr 2, 2001, the City Council adopted Resolution No. 173-01 to
authorize a fee to mitigate the impacts of nonresidential development on the affordability o I' housing
in the City of Dublin (the "Fee"); and
WHEREAS, in August, 2001 the City undertook a study to prepare a report on nonresidential
development as linked to increased demand for affordable housing ("Report"). The City relies upon
and incorporates the Report; and
WHEREAS, the Report was available for public inspection and review for ten days prior to
this public hearing; and
WHEREAS, in accordance with the Government Code, at least fourteen (14) days prior to the
public hearing at which this resolution was adopted, notice of the time and place of the hcaring was
mailed to eligible interested parties who filed written requests with the City for mailed notice or
meetings on new or increased fees or service charges; and
WHEREAS, the City of Dublin Nonresidential Development Affordable Housing Impact Fee
Ordinance (Chapter 7.86 of the Municipal Code) ("the Ordinance") provides as follows:
I. That a nonresidential devclopment affordable housing fee ("fee") is established to pay
tor housing at10rdable to households of very low, low and moderate income housing ("affordable
housing"). (Section 7 _86.020.)
2. That the City Council shall, in a Council resolution adopted aftcr a duly noticed public
hearing, fi'om time to time set forth the amount ofthe fee, identify the purpose of the fee and the use
to which thc fec is to be put, and, dctermine how therc is a reasonable relationship between the fcc's
use and the need for affordable housing and determine how there is a reasonable relationship between
the amount of the fee and the cost of the affordable housing. (Section 7.86.020.)
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ATTACHMENT ~ FINAL
5" GtJ LDC\
3. That the rcvenues raised by payment of the nonresidential development affordable
housing impact fee shall be accounted for in the City's AíYordable Housing Fund. Separate and
special accounts within thc fund shall bc used to account for revcnues, along with any interest
earnings on such account. These monies shall be used solely to inereasc the supply of housing
affordable to households of very low, low and moderate income. (Section 7.86.030.).
FINDINGS
WHEREAS, The City Council finds as follows;
A. Persons of very low, low and moderate income are experiencing increasing difficulty in locating and
maintaining adequate, safe and sanitary 'affordable housing within the City of Dublin. As noted in
the City's Report, a regional shortage of affordable housing and projected job growth will
contribute to an increased need for affordable housing accommodations. According to the Report
projections, the City of Dublin needs to provide housing affordable to persons ofvery low, low and
moderate income who are expected to become residents ofthe City due to the significant gains
anticipated in job and population growth; and
B. Development of new nonresidential projcets encourages new residents to move to the City. Some of
the employees needed to meet the needs of new nonresidential development earn incomes only
adequate to pay for affordable housing. Bccausc affordable housing is in short supply within the
City, these employees now may face a lack of choice in where they may live within tho City, pay a
disproportionate share oftheir incornes to live in adequate housing within tho City, or commute
over-increasing distancos to their jobs from housing located outside the City. These circumstances
hall1l tho City's ability to attain goals articulated in the City's Affordable Housing
Implementation Plan, Specific Plans and General Plan's Housing Element; and
C. Prices and rents for affordable housing remain below the level needed to attract adequate new
construction. At the sanIe time, escalating land costs and rapidly diminishing amounts of land
available for development hinder the provision of affordable dwelling units solely through private
action. The City's Inclusionary Zoning Ordinance is not sufficient by itselfto satisfYthc
affordable housing needs; and
D. The Report documents the linkage between projected job growth, and the rcsulting nonresidential
development and the employees, employee households, and the housing demands of these
households resulting ¡¡-om the projected job growth. New housing afIûrdable to persons identified in
the Report is not now being added to the supply in sufficient quantity to meet the needs ofthe new
employec households associated with projected job growth and resulting nonresidential
development. The Report also identifies the gap between the City's affordable housing goals and the
anticipated revenue generated by the Inclusionary Zoning Ordinance that needs to be filled to meet
the needs for affordable housing for the additional workers. The City is imposing the Fee
established by the Ordinance in order to partially dosc this gap by using the Fee to provide for
increased affordable housing; and
E. In adopting the Fee, thc Council is exercising its powers under Section 7 of Article Xl of the
California Constitution; and
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F. The record establishes:
I. The purpose ofthc Fee is to implement the goals and objectives ofthe Housing
Element of the City's General Plan by mitigating the impacts of future nonresidential
development; and
2. The Fee collected pursuant to this resolution shall be used to increase and maintain the
supply ofholLsing affordable to households of very low, low and moderate ineomc;
and
3. There is a reasonable relationship bctween thc need for affordable housing and the
impacts of the types of developmcnt for which the corresponding Fee is charged in
that ncw nonresidential developmcnt in the City of Dublin will result in additional
persons who work in Dublin who generate or contribute to the need for affordable
housing; and
4. There is a reasonable relationship betwecn thc Fee's use and the impacts of
nonresidential development as development of new nonrcsidential projects encourages
new residents to move to the City who arc not ablc to afford market rate housing; and
5. There is a reasonable relationship bctween the amount ofthc Fcc and the cost ofthe
affordable housing or portion thereof attributable to nonresidential development in the
City of Dublin in that the Fee is calculated based on the number ofresidents or
employees generated by specific types ofland uses, the total amount it will cost to
construct the affordable housing, and the percentage by which nonresidential
development within the City of Dublin contributes to the need for the affordable
housing; and
6. That the cost estimates set forth in the Report are reasonable cost estimates for
constructing the affordable housing, and the Fces expcetcd to be gencrated by future
nonresidential development will not exceed the projected costs of constructing the
affordable housing; and
7. The method of allocation ofthe Fee to a particular nonresidential development bears a
fair and reasonable relationship to, and is roughly proportional to, each development's
burden on, and benefit from, the affordable housing to be funded by the Fee, in that
the Fee is calculated based on the number of residents or employees each particular
nonrcsidential developmcnt will generate; and
8. The empirical data as set forth in the Report demonstrates that anticipated
nonresidential development and job growth would justi fy fees that arc approximately
thirteen times higher than the Fee imposed by this Resolution; and
WHEREAS, the City Council's intent in adopting this resolution is that the Fee adopted by
this resolution shall apply to projects deemed complete alter October 2,2001 that upon the date ofthe
fee becoming effective have not yet received a building permit.
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ADOPTION OF FEE
NOW THEREFORE, the City Council of the City of Dublin does RESOLVE as follows:
1. Definitions.
I. "Affordable Housing" shall mean housing afTordable to households of very low,
low and moderate income as defined in Chapter 8.68 ofthe City of Dublin's
Zoning Ordinance.
II. "Development" shall mean the construction, alteration or addition of any
building or structure within the City of Dublin.
111_ "Light Industrial" shall mean development constructed for the manufacture,
production, assembly, and processing of consumer goods and other space uses
incidental to these activities. Industrial land uses include but arc not limited to:
assembly, contractor's storage yards, fàbrieation, lumber yards, manufacturing,
outdoor stockyards and service yards, printing, processing, warehouse and
distribution, and wholesale and heavy commercial uses.
IV. "Office" shall mean any development constructed for general business offices,
medical and professional offices, administrative or headquarters offices for large
wholesaling operations and other space uses incidental to these activities. Office
land uses include but are not limited to: administrative or corporate headquarters,
banks and savings and loans, business parks, finance offices, insurance offices,
legal offices, medical and health services offices, offices and ofiïee buildings,
professional and administrative ofiïces, professional associations, real estate and
accounting ofiices and travel agencies.
v. "Research & Development" shall mean any facilities devoted almost exclusively to
research and development activities. Research & Development land uses include
but are not limited to: biotechnology, technology and other products and services
research facilities.
VI. "Retail" shall mean establishments that arc constructed for the purchase and sale
of commodities and the sale, servicing, installation, and repair of such
commodities and services and other space uses incidental to these activities. Retail
land uses include but are not limited to: apparel and clothing stores, auto dealers
and malls, auto accessories stores, book stores, discount stores and centers, drug
stores, furniture stores and outlets, home furnishings and improvement centers,
service stations, supennarkets, hardware stores, pharmacies and video rentals.
vii. "Services and Accommodations" shall mean any development constructed as a
hotcl, motcl, bcd-and-breakfast, inn, rcstaurant, bar, theater, other entertainment,
recreation, cultural làcilities, and personal services such as laundries, dry cleaners
and beauty salons.
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2. Nonresidential Development Affordable Housing Impact Fee Imposed.
1. A Nonresidential Development Affordable Housing Impact Fee ("Fcc") shall
be charged and paid for non-residential buildings or structures within the City
of Dublin when the building permit is issued for construction of such building
or structure.
11. A Fee shall be charged and paid for non-residential development for any
addition to an exiting building or structure ifthe addition exceeds 500 square
feet.
Ill. Any nonresidential use ofland which is substantially similar to, but not
ineluded in thc definitions of "Light Industrial," "Office," "Research and
Development," "Retail," and "Services and Accommodations" shall be
allocated by the Community Development Director to one of the five
categories, maintaining as much consistency as possible with the definitions of
such terms.
IV. In the event that a nonresidential use of land is not substantially similar to the
definitions of "Light Industrial," "Office," "Research and Development,"
"Retail," and "Services and Accommodations" the Community Developmcnt
Dircctor may establish a new category and calculate the appropriate fee for
such category based upon the assumptions as used in the Report. The
Community Development Director will calculate the fee based on employment
generation rates adjusted for commuting, income distribution of householder
and the affordabiIity gap for apartments and condominiums as set forth in the
Report at respectively, charts 3-1 and 3-2, 3-3 and 3-4, and 3-7 and 3-8. The
Community Development Director shall detennine the appropriate
employment density per square foot by utilizing data from the City of Dublin
Community Development Department, the Institute of Transportation
Engineers Trip Generation Manual, 5th Edition, 1997 and the San Diego
Association of Govemments Trip Generator Study or other sources as deemcd
appropriate by the Community Development Director.
3. Amount of Fee.
1. The Nonresidential Development Affordable Housing Impact Fee authorized
by Municipal Code section 7.86.020 is hereby set as follows:
~~.'."..._--,.
Future Land Use
Light Industrial
Office
·__·"'W"~'_'.'_'.
Research & Development
Retail
,.."-....-,.....-......---
Services and
Accommodations
,_ ßee per square foot. ...
$ .40
$ 1.00
$ .64
$ .80
$ .34
--.......--
__',""·,,'~'.M.'_.",____
5
FINAL
d¡ Cö l.D C1
4. Exemvtions from Fee.
I. The Fee shall not apply to any projects for which the application for final
discretionary land use approval was deemed eomplcted before October 2,2001
and that have not yct received a building permit.
u. Any alteration or addition to a nonresidential building or structure, except
when the project results in an increase in 500 square feet of operational space
or more to the building or structure.
I1L Any replaecmcnt or reconstruction of an cxisting nonresidential building or
structure that has been destroyed or demolished, provided that the building
permit for new reconstruction is obtained within three (3) years afìer the
building was destroyed or demolished and there is no ehangc in the land use
designation ofthe property (as between Commercial, Office and Industrial).
IV. Any nonresidential building or structure constructed on property on which a
building or structure was demolished for which the Fee has been paid within
the prior twenty year period, provided the cxemption shall be in thc amount of
the previously-paid Fee only, and the applicant shall pay any additional
amount based on the lhen-current Fee. The new development shall not accrue
any unused credit or reimbursement rights, in the event that the rcplacement
project results in a lower Fee.
v. A partial exemption will be granted based on prior Fees paid, ifwithin 20 years
of paying the Fees for a specific development project, the project is demolished
or replaced by a new type of development in which case an exemption from
payment ofthc Fec will he given for up to the amount which was paid by the
prior development project. The new development shall not accrue any unused
credit or reimbursenlenl rights, in the event that the replacement project results
in a lower Fcc.
5. Use ofRevenlles.
I. The revenues raised by payment of the Fee shall be placed in the Affordable
Housing Fund. Separate and special accounts within the Affordable Housing
Fund shall be used to account for such revenues, along with any interest
earnings on each account. The revenues (and interest) shall be used for the
following purposes:
1. To increase lhe supply of housing affordable to households of very low,
low and moderatc income; and
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2. To pay for design, engineering, land acquisition and b(1ilding,
subsidizing and rehabilitation of affordable housing and reasonable
costs or outside consultant studies related thereto; and
3. To reimburse the City for affordable housing constructed by thc City
with funds from other sources ineluding fhnds fTOm other public
entities, unless the City funds were obtained from grants or gifts
intended by the grantor to be used for affordable housing; and
4. To pay for and/or reimb(1TSe costs of program development and
ongoing administration of the Fee program.
n. Fees in these accounts shall be expended only ror affordable housing and only
for the purpose for which the Fee was collected.
6. Periodic Review.
i. D(1ring each fiscal year, the City Manager shall prepare a report for the City
Council, pursuant to Govemment Code section 66001 (b), detern1Îning how
there is a reasonable relationship between the amount ofthe Fee and the cost of
affordable housing, or portion of the affordable housing attributable to the
devclopment on which the Fcc is imposed.
n. During the fifth fiscal year following the first Nonresidential Development
AfJordable Housing Impact Fcc deposit into the Affordable Housing Fund, and
every flve years thereafter, the City Manager shall prepare a report for the City
Council. pursuant to Govcrnment Code section 66001(d), regarding the
disposition of any uncxpended portion ofthe Fund, whether committed or
uncommitted.
Ill. During each fiscal year, the City Manager shall prepare a report for the City
Council, pursuant to Government Code section 66006, identifying the balance
of Fees in each account.
7. Subsequent Analvsis and Revision ofthe Fee.
i. The Fee established hcrein is adopted and implementcd by the COlll1cil in
reliance on the rccord identified above. The City wil1 continue to conduct
further study and analysis to determine whether the Fee should be revised.
When additional information is available, the City Council shall review the Fee
to determine that the amounts are reasonably related to the impacts of
development within the City of Dublin. The City Council may revise the Fee
to incorporate the findings and conclusions of further studies and the General
Plan and Specific Plans.
8. Automatic Fcc Adiustments.
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t"".
\\OÒ\...Q·1
The purpose of this Section 8 is to provide for annllal adjustments of the Fee for
inflation, beginning July 1,2005 and each July I thereafter.
Annllally each July, the City Manager shall adjust the Fee by applying the then current
Consumer Price Index for all urban consumers for the San Francisco/Oakland bay area for the months
of Marçh or April. The City Manager may round the adjusted Fcc to whole dollars.
9. Administrative Guidelines.
The Council may, by resolution, adopt administrative guidelines to provide procedures
for calculation and other administrative aspects ofthe Fee.
10. Effective Date.
This resolution shall become effective immediately. The Fee provided in Sections 2
and 3 of this resolution shall be effective sixty (60) days from the adoption of the resolution.
11. Severabilitv.
The Fee and all portions of this resolution arc severable. Should the Fee or other
provision ofthis resolution be adjudged to be invalid and uncnJorceable, the remaining provisions
shall be and continue to be fully effective, and the Fee shall be fully effective except as to that judged
to be invalid.
PASSED, APPROVED AND ADOPTED this day of
following vote:
2005, by the
AYES;
NOES:
ABSENT:
ABSTAIN:
MAYOR
^ TTEST;
CITY CLERK
732640.4.DOC
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I "2.. 0b l,þ(1
RESOLUTION NO. -05
A RESOLUTION OF THE CITY COUNCIL
OF THE CITY OF DUBUN
*********
ADOPTING A NONRESIDENTIAL DEVELOPMENT AFI<'ORDABLE HOUSING IMPACT
FEE FOR FUTURE DEVELOPMENT IN
THE CITY OF DUBUN
RECITALS
WHEREAS, the City Council has adopted Dublin Municipal Code Chapter 7.86 creating and
establishing the authority for imposing and charging a Nonresidential Development Affordable
Housing Impact Fee ("Fee") to mitigate the impacts of nonresidential development on the
affordabiJity of housing within the jurisdictional limits of the City of Dublin; and
WHEREAS, on October 2,2001, the City Council adopted Resolution No. 173-01 to
authorize a fee to mitigate the impacts of nonresidential development on the affordability of housing
in the City of Dublin (the "Fee"); and
WHEREAS, in August, 2001 the City undcrtook a study to prepare a report on nonrcsidential
dcvelopment as linked to increascd dcmand for affordable housing ("Report"). The City relies upon
and incorporates the Report; and
WHEREAS, the Report was available for public inspection and review for ten days prior to
this public hearing; and
WHEREAS, in accordance with the Government Code, at least fourteen (14) days prior to the
public hearing at which this resolution was adopted, notice of the time and place of the hearing was
mailed to eligible interested parties who filed written requests with the City for mailed notice of
meetings on new or increased fccs or service charges; and
WHEREAS, the City of Dublin Nonresidential Development Affordable Housing Impact Fee
Ordinance (Chapter 7.86 ofthe Municipal Code) ("the Ordinance") provides as follows:
I. That a nonresidential development affordable housing fee ("fee") is established to pay
for housing atYordable to houscholds of very low, low and moderate income housing ("affordable
housing"). (Section 7.86.020.)
2. That the City Council shall, in a Council resolution adopted aftcr a duly noticed public
hearing, from time to time set forth the anlOunt of the fee, identify the purpose of the fee and the use
to which the fee is to bc put, and, determinc how there is a reasonable relationship between the fee's
use and the need for affordable housing and determine how therc is a reasonable relationship bctween
the amount of the fee and the cost of the affordable housing. (Section 7.86.020.)
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ATTACHMENT 3
\3ÖÖ\..Þ~
3. That the rcvenues raised by payment of the nonresidential development afforrlab Ie
housing impact fee shall be accounted for in the City's AfJordable Housing Fund. Separate and
special accounts within the fund shall be used to account for revenues, along with any interest
earnings on such account. These monies shall be used solely to increase the supply of housing
affordable to households of very low, low and moderate income. (Section 7.86.030.).
FINDINGS
WHEREAS, The City Council finds as follows:
A. Persons of vcry low, low and modcrate income arc experiencing increasing difficulty in locating and
maintaining adequate, safe and sanitary affordable housing within the City of Dublin. As noted in
thc City's Report, a regional shortage of aflordable housing and projcctedjob growth will
contribute to an increased need for affordable housing accommodations. According to the Report
projections, the City of Dublin needs to provide housing affordable to persons of very low, low and
moderate income who = expected to become residents ofthe City due to the sig¡ùficant gains
anticipated in job and population growth; and
B. Development ofncw nonresidential projects encourages ncw residents to move to the City. Some of
the employees nceded to meet the needs of new nonresidential development earn incomes only
adequate to pay for al10rdable housing. Because anordable housing is in short supply within the
City, these employees now may face a lack of choice in where they may live within the City, pay a
disproportionate share of!heir incomes to live in adequate housing within the City, or commute
ever-increasing distances to their jobs from housing located outside the City. These circumstances
harm the City's ability to attain goals articulated in the City's Affordable Housing
Implementation Plan, Specific Plans and General Plan's Housing Element; and
C. Prices and rents for affordable housing remain below the level needed to attract adequate new
constTI1ction. At the same time, escalating land costs and rapidly dillÙnishing amounts of land
available for dcvelopment lùnder the provision of affordable dwelling units solely through private
action. The City's Inelusionary Zoning Ordinance is not sutIicient byitsclfto satisfy the
affordable housing needs; and
D. The Report documents the linkage between projected job growth, and thc rcsu1ting nonresidential
development and the employees, employee households, and the housing demands of these
households resulting from the projected job growth. New housing affordable to persons identified in
the Report is not now being added to the supply in sufficient quantity to meet the needs of thc new
employee households assoeiatcd with projeeted job growth and resulting nonresidential
development. The Report also identifies the gap between the City's afTordable housing goals and the
anticipated revenue generated by the Inelusionary Zoning Ordinance that needs to be filled to meet
the needs for affordable housing for the additional workers. The City is imposing the Fee
established by the Ordinanee in order to partially close tlùs gap by using the Fcc to provide for
increased affordable housing; and
E. In adopting the Fcc, the Council is excreising its powers under Section 7 of Artiele XI of the
California Constitution; and
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v-\ Db loC\
F. The rccord establishes:
I. The purpose ofthe Fee is to implement the goals and objectives of the Housing
Element ofthe City's General Plan by mitigating the impacts of future nonresidential
development; and
2. The Fee collected pursuant to this resolution shall be used to increase and maintain the
supply of housing affordable to households of very low, low and moderate income;
and
3. Therc is a rcasonable relationship between the need for af1òrdable housing and the
impacts oJ'thc types of development for which the corresponding Fee is charged in
that new nonresidential development in the City of Dublin will result in additional
persons who work in Dublin who generate or contribute to the need for affordable
housing; and
4. There is a reasonable relationship between the Fee's use and the impacts of
nonresidential development as development of new nonresidential projects encourages
ncw residents to move to the City who are not able to afford market rate housing; and
5. There is a reasonable relationship between the amount ofthe Fee and the cost of the
affordable housing or portion thereof attributable to nonresidential development in the
City of Dublin in that the Fee is calculated based on the number ofresidents or
employees generated by specific types ofland uses, the total amount it will cost to
construct the affordable housing, and thc pereentagc by which nonresidcntial
dcvelopment within thc City of Dublin eontributcs to thc need for the affordable
housing; and
6. That the cost estimates set forth in the Report are reasonable cost estimates for
constructing the affordable housing, and the Fees expected to be generated by future
nonresidential development will not exceed the projected costs of constructing the
affordable housing; and
7. The method of allocation ofthc Fee to a particular nonresidential development bears a
fair and reasonable relationship to, and is roughly proportional to, each development's
burden on, and benefit from, the affordable housing to be funded by the Fee, in that
the Fee is calculated based on the number ofresidents or employees each particular
nonresidential development will generate; and
8. The empirical data as set forth in the Report demonstrates that 3l1ticipated
nonresidential development and job growth would justi fy fees that are approximately
thirteen times higher than the Fee imposed by this Resolution; and
WHEREAS, the City Council's intent in adopting this resolution is that the Fcc adopted by
this resolution shall apply to projects for discretionary land use entitlements for which the application
was deemed complete after the effective date of this Resolution.
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I '5 ole> li/~
ADOPTION OF FEE
NOW THEREFORE, the City Council of the City of Dublin does RESOLVE as follows:
I. Definitions.
1. "Affordable Housing" shall mean housing affordable to households
of very low, low and moderate incomc as deltned in Chapter 8.68 of
the City ofDuhlin's Zoning Ordinance.
11. "Development" shall mean the construction, altcration or
addition of any building or structure within the City of Dublin.
iii. "Light Industrial" shall mean dcvclopment constructed for the
manufacture, production, assembly, and processing of consumcr
goods and other space uses incidental to these activities. Industrial
land uses include but are not limited to: assembly, contractor's
storage yards, fabrication, lumber yards, manufacturing, outdoor
stockyards and service yards, printing, processing, warehouse and
distribution, and wholesale and heavy commercial uses.
IV "Office" shall mean any development constructed for general
business offices, medical and professional offices, administrative or
headquarters ofltces for large wholesaling operations and other space
uses incidental to these activities. Office land uses include but are
not limited to: administrative or corporate headquarters, banks and
savings and loans, business parks, finance of11ees, insurance offices,
legal offices, medical and health services of11ces, offiees and office
buildings, professional and administrative offices, professional
associations, real estate and accounting of11ces and travel agencies.
v. "Research & Devclopment" shall mean any facilities devoted almost
exclusively to research and development activities. Research &
Development land uses include but are not limited to: biotechnology,
technology and other products and services research facilities.
VI. "Retail" shall mean establishments that arc constructed for the
purchase and sale of commodities and the sale, servicing, installation,
and repair of such commodities and services and other space uses
incidental to these activities. Retail land uses include but are not
limited to: apparel and clothing stores, auto dealers and malls, auto
accessories stores, book stores, discount stores and centers, drug
stores, furniture stores and outlets, home furnishings and
improvement centers, service stations, supermarkets, hardware stores,
pharmacies and video rentals.
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vii. "Services and Accommodations" shall mean any development
constructed as a hotel, motel, bed-and-breakfast, inn, restaurant, bar,
theater, other entertainment, recreation, cultural facilities, and
personal services such as laundries, dry eleaners and beauty salons.
a. Nonresidential Development Affordable Housing Impact Fee Imnosed.
I. A Nonresidential Development Affordable Housing Impact Fee
("fee") shall be charged and paid for non-rcsidential buildings or
structures within the City of Dublin when the building pennit is
issued for construction of such building or structure.
11. A Pee shall be charged and paid for non-residenlial development
for any addition to an exiting building or structure if the addition
exceeds 500 square feet.
111. Any nonresidentialllse of land which is substantially similar to,
but not included in the definitions of "Light Industrial," "Office,"
"Rcsearch and Deve10pment," "Retail," and "Services and
Accommodations" shall be allocated by the Community
Development Director to one of the five categories, maintaining
as much consistency as possible with the definitions of such
terms.
IV. In the cvent that a nonresidcntial use ofland is not substantially
similar to the definitions of, "Light Industrial," "Office,"
"Research and Development," "Retail," and "Services and
Accommodations" the Community Development Director may
establish a new category and calculate the appropriate fee for such
eatcgory based upon the assumptions as used in the Report. The
Community Development Director will calculate the fee based on
employment generation rates adj usted for commuting, income
distribution of householder and the affordability gap for
apartments and condominiums as set forth in the Report at
respectively, charts 3-1 and 3-2, 3-3 and 3-4, and 3-7 and 3-8.
The Community Developmcnt Director shall determine the
appropriate employment density per squarc foot by utilizing data
from the City of Dublin Community Development Department,
the Institute of Transportation Engineers Trip Generation Manual,
5'h Edition, 1997 and the San Diego Association of Govemmcnts
Trip Generator Study or other sources as deemed appropriate by
the Community Development Director.
b. Amount of Fee.
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J. The Nonresidential Development Affordable Housing Impact Fcc
authorized by Municipal Code section 7.86.020 is hcreby set as
follows:
Future Land Use
,-~~,~,-~''''".-
Light Industrial
Office
Rescarch & Development
Retail
Services and
Accommodations
Fee per square foot
$ .40
$ 1.00
$ _64
$ .80
$ .34
",',-,,,,".~-_.
un _..~,"... ..~
---, ...-
c. Exemvtions ITom Fee.
I. The Fec shall not apply to any projcct for discretionary land use
entitlements for which the application for final discretionary land
usc approval was deemed completed before the effective date of
the Resolution.
11. Any alteration or addition to a nonresidential building or
structure, except when the project results in an increase in 500
square feet of operational space or more to the building or
structure.
Ill. Any replaecment or reconstruction of an existing nonresidential
building or structure that has been destroyed or dcmolished,
provided that the building permit for new reconstruction is
obtained within thrce (3) ycars after the building was destroyed or
demolished and thcrc is no change in the land use designation of
the property (as betwcen Commercial, Office and Industrial).
IV. Any nonresidential building or structure constructed on property
on which a building or structure was demolished for which the
Fee has becn paid within the prior twenty year period, provided
the exemption shall be in the amount of the previously-paid Fee
only, and the applicant shall pay any additional amount based on
the then-current Fee. The new development shall not accrue any
unused credit or reimbursement rights, in the event that the
replacement proj eet results in a lower Fcc.
v. A partial exemption will be granted bascd on prior Fees paid, if
within 20 years of paying the Fees for a specific development
project, the project is demolished or replaced by a new type of
development in which case an exemption ITom payment of the
6
FINAL
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Fee will be given for up to the amount which was paid by the
prior development project. The new development shall not accrue
any unused credit or reimbursement rights, in the event that the
replacement project results in a lower Fee.
d. Use of Revenues.
i. The revenues raised by payment of the Fee shall be placed in the
Affordable Housing Fund. Separate and speeial accounts within
the Affordable Housing Fund shall be used to account for such
revenues, along with any interest eamings on each account. The
revenues (and interest) shall be used for the following purposes:
I. To increase the supply of housing affordable to
households of very low, low and moderate income; and
2. To pay for design, engineering, land acquisition and
building, subsidizing and rehabilitation of affordable
housing and reasonable costs of outside consultant studies
related thereto; and
3. To reimburse the City for affordable housing constructed
by the City with funds from other sources including funds
from other public entities, unless the City funds were
obtained from grants or gi fts intended by the grantor to be
used for affordable housing; and
4. To pay for and/or reimburse costs of program
development and ongoing administration ofthe Fee
program.
11. Fees in these accounts shall be expended only for affordable
housing and only for the purpose for which the Fee was collected.
e. Periodic Review.
i. During each liscal year, the City Manager shall prepare a report
tor the City Council, pursuant to Government Code scction
66001 (b), determining how there is a reasonable relationship
between the amount ofthe Fee and the cost of affordable housing,
or portion of the affordable housing attributable to the
development on which the Fee is imposed.
n. During the lifth liscal year tollowing the first Nonresidential
Development Affordable Housing Impact Fee deposit into the
Affordable Housing Fund, and every live years thereafter, the
City Manager shall prepare a report for the City Council, pursuant
to Govemment Code section 66001(d), regarding the disposition
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of any unexpended portion of the Fund, whether committed or
uncommitted.
111. During each fiscal year, the City Manager shall prepare a report
for the City Council, pursuant to Government Code section
66006, identifying the balance ofPecs in each account.
f. Subsequcnt Analvsis and Revision ofthe Fee.
i. The Fee establishcd herein is adopted and implemented by the
Council in relianec on the record identified above_ The City will
continue to conduct further study and analysis to detennine
whether the Fee should be revised. When additional information
is avai1ab1e, the City Council shall review the Fee to determine
that the amounts arc reasonably related to the impacts of
development within the City of Dublin. The City Council may
revise the Fec to incorporate the findings and COn elusions of
further studies and the General Plan and Specific Plans.
g. Automatic Fee Adjustments.
The purpose of this Section 8 is to provide for annual adjustments of the Fee for
inflation, beginning July I, 2005 and each July I thereafter.
Annually each July, the City Manager shall adjust the Fee by applying the then current
Consumer Price Index for all urban consumers for the San Francisco/Oakland bay area for the months
of March or ApriL The City Manager may round the adjusted Fee to whole dollars.
h. Administrative Guidelines.
The Council may, by resolution, adopt administrative guidelines to provide procedures
for calculation and other administrative aspects of the Fee.
i. Effective Date.
This resolution shall become effective immediately. The Fee provided in Sections 2
and 3 of this resolution shall be effcctive sixty (60) days from the adoption of the resolution.
j. Severabilitv.
The Fee and all portions ofthis resolution are severable. Should the Fee or other
provision ofthis resolution be adjudged to be invalid and w1enforeeablc, the remaining provisions
shall be and continue to be fully effective, and the Fee shall be fully effective except as to that judged
to be invalid.
PASSED, APPROVED AND ADOPTED this ___ day of
following vote:
2005, by the
AYES:
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NOES:
ABSENT:
ABSTAIN:
ATTEST:
CITY CLERK
732640_5.DOC
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.
MAYOR
9
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J,lðQLoCJ¡
City of Dublin Nonresidential Development Affordable
Housing Impact Fee Study
March 25, 2005
City of Dublin
Nonresidential Impact Fee
Final Report
PA 01-039
ATTACHMENT L
Introduction
dd 00 LÞ Cj
III
This chapter provides an introduction to the Nonresidential Development Affordable
Housing Impact Fee Study, including the purpose of the study, the methodology of the
study, and data sources used to generate the analysis.
A. Introduction
The State of California. Bay Area, and Tri-Valley
region have experienced unprecedented economic
growth during the latter half of the 1990s_
Concurrent with this economic growth, the region
continues to have a significant demand for new
housing. Because the supply of housing has not
kept pace with the demand for housing created by
new jobs, single-family home prices and apartment
rents have increased dramatically, making housing
less affordable to low and moderate income
households.
In 2000, the Dublin City Council recognized that affordable housing would continue to be
an important issue in Dubiin. In February 2001, the City of Dublin adopted an Affordable
Housing Implementation Plan which ultimately resulted in an Inelusionary Housing
Program that requires developers to set aside 12.5% of all new residential development
as affordable to very low. low. and moderate income households. In the Affordable
Housing Implementation Plan, the City Council also expressed a desire to examine the
relationship between job growth and housing, as the second important factor of
affordable housing demand_ The City of Dubiin retained an outside consultant,
Cotton/Bridges/Associates ("Consultant"), to perform an analysis of the impact of job
growth on the affordabiiity of housing and to recommend an impact fee program to
mitigate this impact.
The analysis reviews the types of industries projected to locate in Dubiin, the number of
employees those industries will attract (reduced for commuting patterns), and the
income ranges those employees would receive as salaries, wages and other income. In
addition, the analysis reviews the cost of constructing housing in the Tri-Valley area, as it
reiates to the number of empioyees whose household incomes fall within the very low,
low and moderate-income ranges. The analysis determines the price of closing the gap
between what employees can afford to pay for housing and what new construction costs,
and the analysis iinks that price to the size of the business' facility, as an impact fee.
City Staff and the Consultant began work on the Nonresidential Development Affordable
Housing Impact Fee Study (Fee Study) in August 2001. Soon thereafter, it became
clear that current data on household income, employment. and industries in the Tri-
Valley area was limited. Although the U.S. Census 2000 was gradually being released,
detailed cross tabulations needed for the analysis were not readily forthcoming.
City of Dublin
Nonresidential Impact Fee
2
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Moreover, alternative data sources also proved to be less than satisfactory for the study.
Therefore, the Fee Study was suspended in June 2002 until U.S. Census data became
available.
In late 2002, the Census Bureau indicated that staff was available to perform the
detailed cross tabulations necessary for the Nonresidential Development Affordable
Housing Impact Fee Study. The Consultant requested the appropriate cross tabulations
from the U.S. Census Bureau, which were provided in May 2003. The report findings
herein provide the results of the analysis_
B. Legal Requirements
In recent years, as municipalities have struggled to address their residents' needs for
affordable housing, cities have imposed fees on proposed nonresidential developments
to help finance the production of affordable housing for the employees that the
nonresidential development attracts. The U_S_ Court of Appeals, Ninth Circuit, upheld
one such fee against a Constitutional challenge in its decision, Commercial Builders of
Norlhern California v. City of Sacramento (941 F2d 872)_ In short, the Appellate Court
upheld a fee on nonresidential development to offset burdens created by such
development, based on a housing impacts study_
Commercial impact fees are subject to two overlapping sets of legal requirements. The
Federal constitutional requirements of "nexus" and "rough proportionality" set forth under
Nollan v. California Coastal Commission (1987) 483 U.S.825 and Dolan v. City of Tigard
(1994) 512 U.S.374 are generally inapplicable to fees imposed on a legislative basis on
all similarly situated development. (See Ehrilich v. City of Culver City (1996) 12 CaIA'"
854; City of Monterey v. Del Monte Dunes (1999) 5267 U.S. 687.) California's
"reasonable relationship" requirements are set forth in California case law and codified in
sections 66000-66010 of the California Governrnent Code, which the Legislature
adopted in 1987 (known alternatively as the Mitigation Fee Act or AB 1600). Although
distinct, these two standards are substantively similar and the California Supreme Court,
in Ehrlich v. City of Culver City (1996) 12 CaIA'", concluded that the two standards in the
context of legislatively enacted and generally applicable development fees for all
practical purposes have merged.
The Mitigation Fee Act also requires that the City adopt certain findings prior to imposing
a development impact fee, such as the nonresidential development affordable housing
fee proposed by this study. The required findings are as follows:
(1) Identify the purpose of the fee.
(2) Identify the use to which the fee is to be put. If the use is financing
public facilities, the facilities shall be identified_
(3) Determine how there is a reasonable relationship between the fee's
use and the type of development project on which the fee is imposed.
(4) Determine how there is a reasonable relationship between the need
for the public facility and the type of development project on which the
fee is imposed.
City of Dublin
Nonresidential Impact Fee
Final Report
3
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The Fee Study provides support for these required findings. The Sacramento decision
affords considerable deference to local agencies to develop a reasonable methodology
for establishing the nexus between commercial development and affordable housing and
the appropriate fee amount. The courts do not require mathematical precision in
developing a commercial impact fee, provided that the fee meets the requirements of the
Mitigation Fee Act. The fee upheld in the Sacramento case met the reasonable
relationship standard by demonstrating that non-residential development has an impact
on the affordability of housing, by (a) creating new low-income jobs in the City, which (b)
create additional demand for low-income housing. The amount of the fee upheld in
Sacramento was based on the difference between the incomes of such low-income
workers available for housing expenses and the cost to produce housing to house them.
A portion of this deficit was imposed on non-commercial development as the fee.
Therefore, if a local jurisdiction follows the aforementioned principles in developing a
commercial impact fee, the courts generally have upheld the fees as justifiable.
To develop the fee structure, the Task Force, City Staff and the Consultant examined
five commercial impact fee models used by surrounding jurisdictions. These included the
cities of Oakland, Livermore, Pleasanton, Menlo Park, Mountain View, and Sonoma
County. The cities of Danville, Hayward, San Ramon, San Leandro, and Union City and
counties of Alameda and Contra Costa were not examined because these jurisdictions
do not have impact fees for nonresidential development. The Consultant examined the
assumptions and data sources used by each jurisdiction and then developed a hybrid
approach tailored for the City of Dublin. Chapter 3 provides the methodology used to
meet the aforementioned legal requirements.
c. Methodology
Based on the survey, the Task Force, City Staff and the Consultant developed a five-
step approach to examining the nexus between new nonresidential development in
Dublin and the demand and cost of producing affordable housing. The methodology is
summarized below.
Step 1:
Determine total employees generated by future
nonresidential development based on employment
generation rates for projected land uses in Dublin.
Calculate the distribution of household income
generated from jobs/industries likely to migrate
into the Tri-Valley area.
Determine the number of employees by income
generated by land use designation who would be
likely to seek housing in Dublin.
Determine the cost of producing market rate
single-family residences and apartments and the
gap between that cost and what very low, low, and
moderate income households could afford to pay
for such housing (known as the "affordability gap").
Step 2:
Step 3:
Step 4:
Final Report
City of Dublin
Nonresidential Impact Fee
4
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StepS:
Determine the maximum impact fee per square
foot by multiplying employment generation factors
by the affordability gap for households of different
income levels and by the contribution of the
Inelusionary Zoning Ordinance housing program,
and, lastly, examine the feasibility of the impact
feels).
D. Data Sources
Data for the Nonresidential Development Affordable Housing Impact Fee Study is drawn
from a variety of sources, which are cited in Chapter 3. These data sources are as
follows:
· Employment, population, and households growth projections from the
Association of Bay Area Governments (ABAG Projections Series);
· Demographic data, economic data, and housing production trends from the 1990
and 2000 Census, including special tabulations for the Tri-Valley region related
to household income by industry, number of people in occupations by industry
groups, household income by occupation, and number of workers per household
by income, and other detailed information;
· Inventory of available sites for residential and nonresidential development as well
as the type of industry or project anticipated for each site based on an analysis
by the City of Dublin Community Development Department;
. Employment generation data from the City of Dublin Community Development
Department, the Institute of Transportation Engineers, Trip Generation Manual
(1997), and San Diego Association of Governments Trip Generator Study;
· Comparable commercial impact fee studies from the City of Oakland,
Pleasanton, Livermore, Sonoma County, Menlo Park, and Mountain View;
· Housing sales price trends from Dataquick Real Estate Services, and apartment
rents from Real Facts, the 1990 and 2000 Census, and other city survey data;
· Housing production cost information for apartments and single-famiiy homes in
Dublin from developers and from the Home Builders Association of Northern
California.
E. Committee Review
To develop the commercial impact fee, the City Council appointed a six-member task
force to oversee the development of the nexus study and commercial impact fee
analysis. The City Council and Planning Commission each had one member in
attendance. Developers and the local business community were also represented.
Members were as follows:
· Don Johnson, Imprint Works, for the Dublin Chamber of Commerce
· Adib Nassar, the Dublin Planning Commission
. Janet Lockhart, Mayor of Dublin
· Brad Kaune, Home Marketing Alternative Project Services
· Pat Cashman, Alameda County Surplus Property Authority
· Michael Parker, KolI Development Corporation
City of Dublin
Nonresidential Impact Fee
Final Report
5
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The Task Force met on four occasions, December 13, 2001, February 27, 2003, July 31,
2003, and September 4, 2003. The first two meetings focused on an introduction to the
key economic and housing issues facing Dublin over the next decade, as well as a
discussion of the methodology to be used to calculate the nexus study. At the July 31,
2003 meeting, the Fee Study preliminary findings were distributed to the Task Force for
comment. City Staff returned at the last meeting on September 4, 2003, with further
information in response to the Task Force's comments. Based on the information
provided and the Task Force discussion, the Task Force passed a motion expressing
the Task Force's recommendation to the Dublin City Council.
F. Findings Summary
As detailed in Chapters 2 and 3, a strong demand for housing in Dublin, fueled in part by
strong employment growth in the TriNalley region, has resulted in a growing gap
between housing costs and the ability of area workers to afford housing. While median
housing costs increased between 55 and 120 percent from 1990 to 2000 (depending on
the type of housing), the median income in Dublin increased by 44 percent (see Chart 2-
1 and discussion on page 2-2 for additional detail).
Dublin has the potential to create 30,120 additional jobs between 2005 and 2025. A
significant percentage of these jobs will be filled by individuals living in very low-, low-,
and moderate-income households. It is these households that experience the greatest
difficulties in finding affordable housing in Dublin.
A portion of the future affordable housing need will be met through the City's inelusionary
housing program, in which 12.5 percent of new housing units constructed in Dublin must
be affordable to very low-, low-, and moderate-income households. Of the affordable
units constructed under the City's inclusionary program, 30 percent must be affordable
to very low-income households, 20 percent to low-income households, and 50 percent to
moderate~income households.
Nevertheless, a significant gap will remain between the need and demand for affordable
housing in Dublin and the number of affordable housing units available to very low-, low-,
and moderate-income residents. One method of bridging that gap is to charge an
affordable housing fee to nonresidential developments. Nonresidential developments
create employment that generates a need and demand for affordable housing based on
the anticipated income levels of the workforce in those developments. Revenues from
the affordable housing fee would be used to build housing in Dublin that very low-, low-,
and moderate-income households can rent or own.
This maximum justifiable fee, however, could be modified to a rate that is comparable to
non-residential development rates of adjacent communities, so that Dublin can continue
to attract new employment generation in the future (see Chart 3-10 for comparable
rates). Recent economic conditions have slowed commercial development in the Tri-
Valley and any potential fee could be reviewed for its effect on the viability of commercial
projects.
At the September 4, 2003 meeting, the Nonresidential Development Affordable Housing
Impact Fee Task Force made the following recommendations: that the City Council
-.-
City of Dublin
Nonresidential Impact Fee
Final Report
6
d-7 Db Log
adopt a Nonresidential Development Affordable Housing Impact Fee Ordinance; that
due to current economic conditions, the City Council adopt a fee resolution capped at $1
per square foot of new nonresidential development floor area, which is scaled to the
impacts of different industries; and that the City Council consider exempting projects
which are currently under City review.
City of Dublin
Nonresidential Impact Fee
Final Report
7
{) '6 ðb lc/i
Employment/Housing
Trends
This chapter provides a general background and history of the Tri-Valley area, and then
focuses on economic and housing market changes in Dublin.
A. Tri-Valley Planning Area
The City of Dublin is situated in the Tri-Valley
area, an area encompassing more than 350
square miles in the Diablo, San Ramon, and
Livermore/Amador valleys. The Tri-Valley
includes the cities of Danville, Dublin, Livermore, '"""
Pleasanton, and San Ramon, and the
surrounding parts of Alameda and Contra Costa
counties.
í(i-Valley AreQ
_.-
-------
_.--
.-'
'"
Over the past fifty years, cities in the Tri-Valley
area have developed in a consistent pattern.
Each has shown similar demographics, housing
markets, and economic conditions.
Understanding the changes and transition of the
Tri-Valley area are therefore important in that these changes will likely occur in Dublin as
well.
.. ,.
J'-
'<¡"...?'I!!II>'/!JP.
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Until the 19505, the Tri-Valley area was primarily agricultural in nature. Pleasanton and
Livermore incorporated in the 19th century, providing services for the local agricultural
economy. However, the establishment of the Lawrence Livermore Laboratory and other
major research facilities during the 19505 began a new direction that would shape the
future character of the Tri-Valley. The completion of the freeway systems in the 19605
and 1970s (Interstates 580 and 680) opened the area to extensive single-family
suburban development In unincorporated areas.
With the rapid suburbanization of the Tri-Valley area, the cities of Dublin in Alameda
County and Danville and San Ramon in Contra Costa County incorporated in the early
1980s. These cities also included large tracts of land within their spheres of influence.
During the 1980s, the Tri-Valley area became a major center of employment for the
region, with the development of the Bishop Ranch Office Park in San Ramon and the
Hacienda Business Park in Pleasanton. Employment development accelerated through
much of the 19905,
City of Dublin
Nonresidential Impact Fee
Final Report
8
B. Dublin Market Trends
Dublin experienced substantial
population and employment growth
during the 1990s. ABAG's
Projections 2003 show that the City
of Dublin experienced a 70%
increase in job growth from 1990
through 2000 (Chart 2-1)'.
However, according to the U.S
Census Bureau, the City
experienced a 41% increase in
housing units and a 29% increase in
population during the same period of
time'. As a result, the jobs-housing
ratio in Dublin significantly increased
since 1990 from 1.84 jobs per
housing unit in 1990 to 2.2 jobs per
housing unit by 2000'.
Dublin's rapid growth and demand
for housing is evident in the changes in
housing prices over the decade as well.
Chart 2-2 details housing price trends
from 1990 to 2000. According to
Dataquick, the median sales price of a
condominium rose 55% to $291,000'.
Meanwhile, the median sales price of a
single-family home increased 120% to
more than $450,0005. Although long-
term trends on apartment rents are not
available, the Census Bureau reports
that the median contract rent for
apartments and single-family
residences has increased by
approximately 54% to $1,245 in 2000".
c9Q ótJ (oq
Chart 2-1
Population, Job, and Housing Growth
City of Dublin, 1990-2000
80%
7.%
70%·
60%
50%
40%
30%
20%
10%·
0°/1;1 .
Population
Job GrCMlth
Housing
Chart 2-2
Housing PrIce Increases
140'10
120%
120%
100%
80%
60%
40'10
20%
0%
Caldcminium
Ontrad Rent
Single-f8l1ily
I-krne
1 According to ABAG's Projections 2003, the total number of jobs in Dublin in 2000 was 21 ,870. The 1990
figures from ABAG's Projer;/ions 2002 totals 12,870 jobs.
2 U.S. Census Bureau figures for housing total 9,872 units in 2000 and 6,992 units in 1990. Population
totals 29,973 people in 2000 and 23,229 people In 2000.
2000 U.S. Census
" Condo median starting price of $187,500 in 1990
, Single·family home median starting price of $210,000 in 1990
, Median contract rent starting price of $811 in 1990
City of Dublin
Nonresidential Impact Fee
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9
30 Ciò I.P c¡
In contrast, the 1990 and 2000 Census reports that the median household income of
Dublin residents increased 44%, considerably slower than housing prices'. Changes in
household income are largely affected by two conditions:
1) The pace of net migration and turnover among households. For example, new
households moving to Dublin tend to have higher incomes, on average, than
existing residents, including those moving out of the community. The rate at
which higher income households replace lower-income households will affect the
pace of income growth in a community.
2) The rate of increase of incomes among existing residents. Most workers
experience significant gains in income as they progress in their careers, and
average incomes rise with age, at least through retirement. The rate of income
growth in a community will also be affected by the percentage of workers who
stay in a community through their peak eaming years (typically ages 45 to 54).
According to the City of Dublin Community Development Department projections, Dublin
is expected to continue its rapid pace of development through 2025. Dublin's
employment is expected to increase 154% from 19,500 jobs in 2002 to 49,620 jobs in
2025. Other indicators, such as Association of Bay Area Governments (ABAG), also
point towards rapid development. According to ABAG projections for Dublin for the
period of 2000 to 2025, Dublin's population is projected to increase 120% to 65,900
persons, and households are expected to increase 138% to 22,220 (Projections 2003).
These changes will significantly increase the demand for suitable housing.
These growth projections have long-term implications for the City of Dublin. Lower-
income residents often live in subsidized units and have limited choices to move
elsewhere. This creates a condition where upper income households who have homes
or lower-income persons who have subsidized units remain in the City. However,
moderate income families and the workforce of the City, including teachers, public safety
workers, nurses, and others leave the community entirely, or find affordable housing
elsewhere and commute to work in Dublin. This trend affects traffic and commuting
patterns, impacts quality of life, and makes it difficult for employers to attract and retain
employees '.
Based on these market trends and the methodology outlined in this Study, the Task
Force in consultation with City Staff and the Consultant developed the following fee
categories to be used in calculating the Nonresidential Development Affordable Housing
Impact Fee:
"Light Industrial" shall mean development constructed for the manufacture, production,
assembly, and processing of consumer goods and other space uses incidental to these
activities.
"Retail" shall mean establishments that are constructed as regional and community-serving
retail facilities for the purchase and sale of commodities and services and the sale,
I Median income for Dublin residents was $53,710 in 1990 and $77,283 in 2000, according to the U.s.
Census Bureau.
1 Section 4.6.3 of the Eastern Dublin Speciffc Plan discusses the advantages of a jobs/housing balance
(page 30).
City of Dublin
Nonresidential Impact Fee
Final Report
10
31 D"bl£)q
servicing, installation, and repair of such commodities and services and other space uses
incidental to these activities.
"Office" shall mean any development constructed for general business offices, medical and
professional offices, administrative or headquarters offices for large wholesaling operations
and other space uses incidental to these activities.
"Research & Development" shall mean any facilities devoted almost exclusively to
research and development activities. Research & Development land uses include but
are not limited to: biotechnology, technology and other products and services research
facilities_
"Services and Accommodations" shall mean any development constructed as a hotel,
motel or bed-and-breakfast inn, restaurants and bars, theaters, personal services such as
laundries, dry cleaners and beauty salons, and entertainment, recreation, and cultural
facilities.
City of Dublin
Nonresidential Impact Fee
Final Report
11
3~ ~ 0q
Jobs-Housing Demand
Linkage
This chapter analyzes projected employment growth and evaluates the impact of this
growth on the need for affordable housing. This analysis is intended to demonstrate the
nexus between employment growth and the demand for housing, and calculate the
maximum justifiable fee that could be charged for affordable housing.
A. Employment Growth
Population growth in Dublin is attributable, in
part, to nonresidential development. As available
land is gradually developed with commercial and
industrial businesses, new job opportunities are
created. New jobs will attract a workforce, many
of whom may wish to live in Dublin if suitable
housing is available. The first step in determining
the demand for housing is therefore to estimate
the number of new jobs generated from
nonresidential development in Dublin. The
calculations are illustrated to the right and in
Charts 3·1 and 3-2 on the following page.
Employment
Available Acreage
x
Industry Employee Generation
Rate
x
Commuting Rates
Employees to live in Dublin
To that end, City Staff provided an inventory of developable nonresidential land in Dublin.
For each, City Staff determined the type of use (e.g., commercial, industrial, school,
parkland, etc.) expected to occupy each site and trip generation rates. Using recognized
data sources, the Consultantcalculated the total amount of developable acreage and the
number of jobs generated from different types of commercial, industrial, retail, and other
uses. Taken together, Dublin can expect to accommodate 30,120 additional jobs by build-
out (projected to be 2025).
Regardless of employment projections, not all employees will choose. to live in Dublin.
Households choose a community for a variety of reasons, including quality of schools,
availability of affordable housing, proximity to family and relatives, public service levels, etc.
According to a 1990 study by the Tri-Valley Planning Committee2, an association of planning
directors and other public agency officials in the Tri-Valley area, only 48% of all employees
will eventually choose to live within the Tri-Valley area. This factor was applied to projected
employment to estimate the demand for housing in Dublin.
The employment generation rates and the projected employment generation totals are
shown in Charts 3-1 and 3-2. The totai projected building floor area is approximately
10.78 million square feet.
2 Working Paper #3, T ri-Valley Planning Committee, ABAG 1 g90 Census Transportation Package
(According to ABAG, the Tri.Valley Planning Committee was formed out of the Tri-Valley Transportation
Council with a one-time grant from ABAG to produce a subregional planning strategy.)
City of Dublin
Nonresidential Impact Fee
Final Report
12
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Chart 3-1 Employment Generation Rates
Employment Generation Rates
ITE Average Adj. Rate for
Land Uses in Industrial Density Commuters
Code 1 per KSF2 per KSF3
110 1.69 0.81
710 3.85 1.85
760 2.47 1.19
814 2.04 0.99
Future
Dublin
Light Industrial
Office
Research & Development
Retail
Services & Accomodations5 310
0.47
0.23
Notations
1. Institute of Transportation Engineers Trip Generation Manual, 5'h Edition, 1997
2. Eastern Dublin Specific Plan, surve~ information, and Institute of Transportation
Engineers, Trip Generation Manual, 5 h Edition, 1997
3. Employment density adjusted for average 52% commute factor for Trl-Valley (Tri-
Valley Planning Committee)
4. Hotel/Arts & Entertainment rate of .47 per KSF adjusted for a 240-room hotel at 508
square feet per room (based on survey of Monarch Hotel, Amerisuites and Holiday
Inn Extended Stay hotels; Regal Cinemas; and the Applebee's, Mimi's, Black
Angus, Casa Orozco, EI T orito, and Macaroni Grill Restaurants.)
Chart 3-2 Employment Generation Totals From 2003 to Build Out
Employment Generátlon Totals
Future Land Uses in
Dublin
Light Industrial
Office (with Transit CtL)
Research & Development
Retail (with Transit Ctr.)
Services & Accommodations
Total
Building
Size (KSF)1
840.37
5,303.50
985.50
2,633.13
1,012.52
10,775.02
New
Employees2
1,420
20,418
2,434
5,372
476
30,120
Employees
to Live in
Dublln3
681
9,811
1,173
2,607
233
14,505
Notations
1. City of Dublin provided building size capacity by different land uses
2. Total employment determined by calculating employment generation rate by building size.
3. Employees expecled to live in Dublin determined by adjusting employment generation for average
52% commuting factor for Tri-Valley (Trl-Valley Planning Committee).
B. Job-Related Earnings and Income
City of Dublin
Nonresidential Impact Fee
13
Final Report
---.-.....--.-...-
.3 '-I rFtJ U> q
Having calculated the additional jobs created by projected non-residential development,
the question that arises is: How does one determine the wages and salaries of
anticipated future jobs? To that end, the U.S. Census Bureau provided specialized cross
tabulations of earnings of householders working in the Tri-Valley area (2000 Census).
Since many households have more than one worker, the Census Bureau also provided
information in its cross-tabulations on the income of all members of the household,
called "Household Income."
As shown in Chart 3-3, the Task Force, City Staff and the Consultant first calculated the
median earnings of householders employed in various industries, as well as the income
of the entire household of that employee. Household income is a broad measure of all
monetary gains reported by a household. Many households have more than one worker
and sources of income in addition to earnings, which increases their ability to pay more
for housing. For this reason, household income is used as the basis of the
nonresidential development impact fee. Industry categories were collapsed into broader
categories in order to match the types of industries likely to occupy the particular general
plan land use designations in Dublin.
Chart 3-3: Median Earnings and Income by Industry, Census 2000
Median Median Median
Class Industry Householder Householder Household
Esrnlngs Earnings Income
--~ ~.. (Averaged)
1 Manufacturing $ 77,216 $77,216 $107,320
"....
2 Construction $61,213
Transport., Warehouse, and Utility $58,904
Wholesale Trade $64,759 $62,440 $91,416
3 Retail Trade $49,923 $49,923 $85,072
4 Information $71,618
Finance and Insurance $67,609
Real Estate, Rental and Leasing $57,846
Professional, Scientific, and Tech_ $76,116
Administrative Support _._-~..- $42,571 $69,801 $99,960
5 Educational Services $48,824
Healthcare and Sociai Assistance $49,112 $48,984 $79.703
-.
6 Arts, Entertainment, and Rec_ $31,737
Accommodations and Food $29,468
Other Services $41,609 $35,482 $65,427
"'''~
7 Public Administration $65,343 $65,343 $95,957
City of Dublin
Nonresidential Impact Fee
Final Report
14
32>- ðQ (pq
Chart 3-4 summarizes the household incomes by householder industry distributed to
very low, low and moderate income groups. For example, using the chart below, one can
calculate that out of 100 employees or jobs within the Serviee/Accomodation industry in
the Tri-Valley, 14 employees or jobs could be expected to be within the low-income
range set by the State's Department of Housing and Community Development (HCD)'.
Chart 3-4: Trl-Valley Household Income By Industry Distribution
-~
Household Income
Very Low- Low-Income Moderate-
Industry Income Income
-
Manufacturing 4.5% 6.5% 21.6%
Other Industrial 3.8% 4.4% 15.5%
Retail Trade 85% 9.8% 21.2%
Professional 5.7% 6.2% 17.1%
Education/Social 7.8% 10.1% 25.4% ."-
Service/Accommodation 18.2% 14.3% 21.7%
Public Administration 3.7% 4.6% 16.6%
Source: U.S. Census, 2000 adjusted for income thresholds developed by HCD.
c. Employment Generation by Land Use
Section A calculated the total number of
jobs expected to be generated in Dublin Employees Per Land Use
from nonresidential development. Section ~--_.._-_...~._._,..
B then calculated the expected distribution Adjusted Employee Generation Rate
x
of household income of a householder Square footage of each land use
working in each industry. This section (weighted for different industries)
determines the employment densities, by x
income, associated with each land use. Income Distribution Profile (weighted for
The calculations for this step are illustrated different industries)
in the sidebar to the right.
Number of very low, low, and moderate
Based on the developable land remaining income employees per land use
in Dublin, the Study estimated the
distribution of industries likely to occupy a
particular site based on Specific Plan land use designations and the North American
Industry Classification System (NAICS) also used by the U.S. Census Bureau. For
example, on commercial-designated sites, the City estimated that the site would contain
60 percent retail industry uses, 26 percent services and accommodations (arts,
entertainment, and food uses), and 14 percent information uses (professional and
administrative offices). This mix of uses was forecasted using the Waterford commercial
center as the model, because it is a recent commercial project in the Eastern Dublin
Specific Plan area.
I The California Department of Housing and Community Development (HCD) determines income ranges for
Alameda County based on the median household income, adjusted for household size. Very low income
means 50% or less of the County's median income. Low income means more than 50% to 80% of the
median income. Moderate means more than 80% to 120% of the median income.
City of Dublin Final Report
Nonresidential Impact Fee 15
. .
-
31J¿ i5b /..Pq
Chart 3-5; Employment Generation Per land Use
Light Office Res & Retail Svcs &
Industry Mix Indust.; Dev Accom
~-~~-- .'~~~
Goods 100% 0% 0% 0% 0%
Manufac_t':'.r!.~!ì.,,_. 0% 0% 0% 0% 0%
Retail 0% 0% 0% 100% 0%
Professional 0% 100% 100% 0% 0%
-..".---.--...
Education/Social 0% 0% 0% 0% 0%
Service/Acom. 0% 0% 0% 0% 100%
Having estimated the mix of industries on each land use, it is possible to determine the
number of future employees by household income that can be expected to work and live
in Dublin. The Study developed by the Task Force, City Staff and the Consultant
multiplied the employee generation rate (adjusted for commuting) by the amount of
developable land to yield the total number of employees per land use. This total was
then multiplied by the distribution of household income generated by householders
working in those industries. This calculation yielded the number of employees by
household income, generated per 1,000 square feet of floor area. Chart 3-6 provides a
summary of the calculations.
Chart 3-6: Employment Generation Per land Use
Number of Emplo.yees Per 1,000 Square Feet
Very Low Income Low Income Moderate-
Land Uses Income
--'''~.,,,.'~.'',,
Light Industrial 0.04 0.05 0.17
c----',,-...
Office 0.11 0.12 0.32
Research & Development -- 0.Q7 0.07 0.20
-".
Retail 0.08 0.10 '0.21
~_."
Services & Accomodations 0.04 0.03 005
Note: Figures refer to employees per 1,000 square feet of floor area.
D. Housing Prices and Affordability Gap
Having determined the number jobholders by industry and income projected to locate in
Dublin, the focus turns to the housing market. This section develops the average cost of
producing market rate housing in Dublin and contrasts that with the amount that can be
afforded by very low, low and moderate income households (the "affordability gap").
The City of Dublin's Consultant developed an apartment proforma based on three recent
projects built in Dublin between 2001 and 2003 for the analysis. In addition, the Study
City of Dublin Final Report
Nonresidential Impact Fee 16
3l r5b wcr
used the single-family home proforma (essentially a small-lot condominium) developed
by the Homebuilders Association for the City's inelusionary program in 2001. Chart 3-7
provides a summary of the cost of producing affordable rental projects and the market
prices of a condominium development in Dublin.
Chart 3-7: Housing Proformas in DUblin
Project Specifics
For Sille
12 units/acre
Wood Frame
1 storL_._...___.____
Attached Gara e
Hau¡¡i" ¢
Land Costs
Soft Costs
Construction Costs
Avera e Cost
45% of sales price
$80 er s uare foot
...:g82.,-Q.9.Q.Œ'lice )
Notes:
1. Based on average of three proformas of apartment projects built in Dublin (2001-2003), average
unit size of 793 square feet.
2. Data provided by HomeBuilder Association for the City's Incluslonary program (2001), unit size of
1,200 square feet.
The Task Force determined the breakeven rent and sales price for these projects using
residential industry standards for financing, operating costs, and vacancies based on
information provided by the Consultant and Task Force members' knowledge and
expertise. The Study calculated the maximum amount that could be afforded by
households of different income levels. The difference (calied the "affordability gap) was
annualized and discounted using a 7 percent capitalization rate, which is the market
interest rate for permanent loans. This calculation provides the lump sum amount
necessary to compensate a property owner for renting at below market rents.
Calculating the "affordability gap" for single-family residences was more straightforward.
The maximum affordable payment for moderate-income households was calculated
based on standard assumptions regarding annual property taxes and insurance, a 5
percent down payment, and a 30-year fixed loan at a 7 percent interest rate. The
difference between the sales price and maximum affordable price represented the lump
sum amount necessary to compensate a property owner.
It should be noted that the sales price of a single-family home used in the above analysis
($282,000) is substantially below the market rate price for single-famiiy residences being
built in Dublin today. The difference could be due to the small lot size for the unit (3,500
square feet) as well as the higher densities allowed. Still, even with those qualifications,
the $282,000 price used for the inclusionary anaiysis is probably more reflective of the
sales price of condominiums. Chart 3-8 summarizes the results of the affordability gap
analysis.
City of Dublin
Nonresidential Impact Fee
Final Report
17
Chart 3-8: Affordability Gap Analysis
,3'£ i5b 19q
Affordability Apartment Project Single-family Residence (Condo)
Calculation Very Low Low Moderate Very Low Low Moderate
Annual HH Income' $ 32,200 $48,450 $77,300 $35,800 $57,280 $85,920
-'~ ~~~~~..~
Ma~. I}ffordable Rent $730 $1,136 $1,858 $81,166 $166,129 $279,414
I Pnce
_' U_y", ..
Breakeven $1,668 $1,668 $1,668 $282,000 $282,000 $282,000
RenUSales4
Affordability Gap/Unit 0 $938 $532 - $(189) $200,834 $115,871 $"2,586
Annualized ----
Affordability Gap $11,259 $6,384 $(2,271) N/A N/A N/A
-- ,~,- ,--'""-.--.- ~_..
Lump Sum to
Compensate Property $160,838 $91,195 $(32,448) $200,834 $115,871 $ 2,586
Owner"
NoteS:
1. Annual Income determined by HCD income limits. For apartments, a three-person household was
assumed; a four'person household was assumed for a single-famiiy residence (three-bedroom size).
2. Maximum affordable rent refers to payments of no more than 30% of income toward housing after utility
payments.
3. Maximum affordable sales price assumes a 5% down payment, 30 year loan at 7% interest rate and
standard assumptions regarding property taxes and Insurance.
4. Breakeven rent wes determined by calculating the likely financing costs of a 100% financed loan for 30
years at an interest rate Of 7%. The Institute of Real Ëstale Management provided standard
assumptions for calculating the operating costs of apartment projects. For single-family residences, the
breakeven price was assumed to be the sales price.
5. Difference between the breakeven rent for an apartment unit or home sales price and the maximum that
could be afforded by a very low, low, and moderate income household.
6. The lump sum payment needed to compensate the property owner for renting or selling a unit at below
market rates is determined by a 7% capitalization rate.
E. MaxImum JustifIable Fee
The final step was to determine the
maximum justifiable commercial impact
fee, and the fee's feasibility. To
maximize the utility of the fee, the fee
was based on very low and low-income
households living in apartments and
moderate income households living in
smail lot single-family homes. The fee
calculation methodology is represented
in the sidebar to the right.
City Staff and the Consultant also
surveyed one dozen jurisdictions to
compare their maximum justifiable fees
with the results of the analysis. From this
pool, three jurisdictions were selected
from Alameda County (Pleasanton,
Livermore, and Oakland) and three were
City of Dublin
Nonresidential Impact Fee
Maximum Justifiable
Commercial Impact Fee
------------------------------------------------------
Step A: Employment Generation Rate
for Each Industry Adjusted for
Commuting
x
Step B: Income Distribution of
Householder employed by Industry
x
Step C: Affordability Gap for Apartments
and Condominiums
Final Report
18
.3Cì 0b Lo<1
outside the County (Sonoma County, Menlo Park, and Mountain View). The adjacent
cities of Danville, Hayward, San Ramon, San Leandro, Union City and counties of
Alameda and Contra Costa were not selected because these jurisdictions do not have
housing impact fees for nonresidential development.
Dublin's fee methodology is comparable to the latter four studies, conducted after 2000.
Fees for the first two, Livermore's study (DMG, 2001) and Pleasanton (EPS, 1990
updated in 2000), were the lowest. The Livermore study derived the lowest fees,
primarily due to significantly lower construction costs estimated at approximately
$77,000 for a multi-family apartment unit and low proportions of very low and low-income
jobs. Chart 3-10 shows the comparable jurisdictions with maximum non-residential
affordable housing impact fees, below.
Chart 3-10: Maximum Justifiable Fee (Per Square Feet)
Industries lakland Mountain Menlo Park Sonoma Livermore Pleasanton
View County
r-----.--..-..-...--.. $12.85 $24.72 $20 $.07 - $.26 $4.58
Light 16.97
Industrial
Office $35.11 16.97 45.32 $31 $.52 $13.62
Corp. HQ $24.72 $.52
Rand D 16.97 45.32 $4 $537
Retail $32.39 14.84 $24.72 $36 $.81 $6.26
Commercial $24.72
-~~'- -~~~,-~,..'~
Hotel/A&E/Svcs $12.91 13.90 $24.72 $32 $397/room $7.46/room
Public/Semi- $24.72 $31
Public ~"_'_.m.'''''~~ L..-...~~
In most cases, except for the City of Livermore, the cities surveyed did not adopt the
maximum fees established in their studies, but opted instead to adopt fees that were on
average 9 to 34 percent of the maximum justifiable fee. For example, the City of
Pleasanton recently adopted an impact fee of $2.31 per square foot for new commercial
development. The City of Livermore adopted the maximum fee, which was calculated as
totaling between $0.7 and $.81 per square foot.
City of Dublin
Nonresidential Impact Fee
Final Report
19
Llo f5Q laq
F. Dublin's Maximum Justifiable Fee
The City of Dublin's maximum justifiable fee is calculated in a manner similar to the
jurisdictions above. In addition, the Task Force recommended that the contributions of
the City's Inclusionary Zoning Ordinance in meeting the City's housings needs, including
workforce housing, be considered when calculating the maximum justifiable fee.
The Fee Study recognizes that the maximum justifiable fee by industry could be adjusted
for the percentage of very low-, low-and moderate-income housing units anticipated to
be produced under Dublin's inclusionary housing program. The inelusionary program
requires that 12.5 percent of all new units produced be affordable to low- and moderate-
income households, of which 30 percent should be affordable to very low-income
households, 20 percent to low-income households, and 50 percent to moderate-income
households.
The number of units affordable to very low, low and moderate income level residents,
expected to be produced under the Inclusionary Zoning Ordinance is approximately
1,260 units3. These units could house 2,772 employed residents within the City of
Dublin or approximately 52 percent of the very low, low and moderate income jobholders
projected to be employed by businesses locating in Dublin. The City of Dublin's housing
needs and the contribution of the Inclusionary Zoning Ordinance are described in Chart
3·11 below.
Chart 3-11, Contribution of Ineluslonary Program to Housing Employed Residents
Remaining 12.5% Number of Employed State of
Units Inclusionary Workers at 2.2 Residents within California
to Build by Year Requirement per Unit Very Low, Low Regional
2025 and Moderate Housing Needs
Income Ranges Assessment
To Year 20254 (1999 - 2006)
10,084 1,260 Units 2,772 5,303 5,436
The Study recommends that by reducing the maximum justifiable fee by the percentage
of affordable housing that will be created by the City's Inclusionary Program, the non-
residential development fee program would not duplicate the Inelusionary Zoning
Ordinance's contribution to providing affordable housing to jobholders. Using this
formula, the maximum justifiable fees to provide affordable housing to jobholder
residents, as a direct result of commercial development in Dublin, are as follows (Chart
3-12):
, Affordable Housing Priority Areas map approved May 7, 2002 by City Council Resolution 57-02, totals
10,084 units remaining 10 be buill in Dublin. Inclusionary requirement of 12.5% produces 1,260.5 units.
4 Employed Residents are the percentage of workers who would desire to mOve 10 Dublin at 48%. Average
of Very Low, Low and Moderate Income workers i. approximately 35.3% of total employed resident..
City of Dublin
Nonresidential Impact Fee
Final Report
20
.
141 UbLDC¡
Chart 3-12, Maximum Justifiable Fees
Future L.and Use Total Building Size Fee
_ IK~Fsl
Light Industrial 840.37 $ 5.46
Office 5,303.5 (-1,462.7)* $13.72
R&D 985_§!:: 8EìO-5)* $ 8_81
Retail 2,633.13 (-696.7)* $ 10.99
Svcs/Accommodations 1,012.52 (-299.74)* $ 4.70
, The number in parentheses represents the square footage exempted from the fee
as part of Fairway Ranch project.
G. Task Force Recommendation
At the September 4, 2003 meeting, the Nonresidential Development Affordable Housing
Impact Fee Task Force made the following recommendations: that the City Council
adopt a Nonresidential Development Affordable Housing Impact Fee Ordinance; that,
due to current market conditions, the City Council adopt a fee resolution capped at $1
per square foot of new nonresidential floor area, which is scaled to the impacts of
different industries; and that the City Council consider exempting projects which are
currently under City review.
The Task Force approved a motion to make the following recommendations to the City
Council:
1.) That an ordinance be adopted for charging a commercial linkage fee.
2.) That, due to current market conditions, a fee be capped at $1.00 per square foot
of new nonresidential floor area and that it be scaled to the impacts of different
industries.
3_) That the City Council consider exempting certain categories of projects that are
currently in the pipeline and under City review.
As recommended, the adopted fees would range from $.34 to $1.00 per square foot of
commercial development based on the type of commercial use or business tenant, as
outlined in Chart 3-13, below. The fee would be collected prior to issuance of a building
permit. The fee would be levied one time, with the construction of new commercial floor
area.
5 KSF symbolizes 1,000 square feet of floor area.
City of Dublin
Nonresidential Impact Fee
Final Report
21
y?. DO Ld1
Licht Industrial
Office
R&D
Retail
Svcs&Äccommodation
Total
Chart 3-13, Recommended Fee
Future land Use Building Size
IKSFI6
840.37
3,840.8
125
1,936.43
712.78
7,455.38
Fee7
Impact Fees
$ .40
$ 1.00
$ .64
$ .80
$ .34
$ 336,148
$ 3,840,800
$ 80,000
$ 1,549,144
$ 242,346
$ 6,048,438
The City estimates that there is approximately 10.78 million square feet of commercial
development remaining to be built, including the Transit Center Master Plan and the
Dublin Ranch commercial development. Due to the terms of some development
agreements, approximately 7.5 million square feet of commercial development would be
subject to the potential nonresidential development fee^-
H. Definitions
To aid in the implementation of the Nonresidential Development Affordable Housing Impact
Fee, the following definitions provide the meanings of the fee categories, as they were
developed in the fee methodology.
"Light Industrial" shall mean development constructed for the manufacture, production,
assembly, and processing of consumer goods and other space uses incidental to these
activities. Industrial land uses include but are not limited to: assembly, contractor's
storage yards, fabrication, lumber yards, manufacturing, outdoor stockyards and service
yards, printing, processing, warehouse and distribution, and wholesale and heavy
commercial uses.
"Office" shall mean any development constructed for general business offices, medical
and professional offices, administrative or headquarters offices for large wholesaling
operations and other space uses incidental to these activities. Office land uses include
but are not limited to: administrative or corporate headquarters, banks and savings and
loans, business parks, finance offices, insurance offices, iegal offices, medical and health
services offices, offices and office buildings, professional and administrative offices,
professional associations, real estate and accounting offices and travel agencies.
.
"Retail" shall mean establishments that are constructed for the purchase and sale of
commodities and the sale, servicing, installation, and repair of such commodities and
services and other space uses incidental to these activities. Retail land uses include but
are not limited to: apparel and clothing stores, auto dealers and malls, auto accessories
stores, book stores, discount stores and centers, drug stores, furniture stores and outlets,
, Total building floor area projections include areas within the Dublin Ranch development which have been
exempted from any potential nonresidential development impact fee.
r Fee calculated per square foot of new commercial development floor area.
, Total floor area subject to the fee Is reduced by the approximately 3.3 million square feet of commercial
floor area exempted by the Fairway Ranch development agreement.
City of Dublin
Nonresldentlallmpacl Fee
Final Report
22
'-\ ~ ~ \0<1
home furnishings and improvement centers, service stations, supermarkets, hardware
stores, pharmacies and video rentals.
"Research & Development" shall mean any facilities devoted almost exclusively to
research and development activities. Research & Development land uses include but are
not limited to: biotechnology, technology and other products and services research
facilities.
"Services and Accommodations" shall mean any development constructed as a hotel,
motel, bed-and-breakfast, inn, restaurant, bar, theater, other entertainment, recreation,
cultural facilities, and personal services such as laundries, dry cleaners and beauty salons_
I. Conclusion
A strong demand for housing in Dublin, fueied in part by strong employment growth in
the Tri-Valley region, has resulted in a growing gap between housing costs and the
ability of area workers to afford housing. This trend may continue as Dublin has the
potentiai to create 30,120 additional jobs between 2005 and 2025. According to Census
data for the Tri-Valley area, a significant percentage of these jobs will be filled by
individuals living in very low-, low, and moderate-income households. It is these
households that will experience the greatest difficulties in finding affordable housing in
Dublin.
The City of Dublin has established an Inclusionary Zoning Ordinance which requires
12_5 percent of all residential units be made affordable to very low, low and moderate
income families and individuals. Nevertheless, a significant gap will remain between the
need and demand for affordable housing in Dublin and the number of affordable housing
units available to these residents. One method of bridging that gap is to charge an
affordable housing impact fee to nonresidential developments. A justification for such a
fee is that nonresidential developments create employment that generates a need and
demand for affordable housing based on the anticipated income levels of the workforce
in those developments. Revenues from the Nonresidential Development Affordable
Housing Impact Fee would be used to build, subsidize, and rehabilitate housing in Dublin
that very low-, low-, and moderate-income households can rent or own.
City of Dublin
Nonresidentiallmpacl Fee
23
Final Report
The Tri~Vallev Herald
YL/ C5biD~
010 ANG Newspapers
4770 Willow Road, Pleasanton, CA 94588
Logal Advertising
(925) 416-4719
Legal No. 2154594
PROOF OF PUBLICATION
In the matter of
HEARING ON OCT. 2, 2001, RE: RESOL OF
. INTENT TO ADOPT De\'. FEE TO MITIGATE
THE IMPACTS OF NONRESIDENTIAL De\'. OF
THE AFFORDABILlTY OF HOUSING
The undereigned befow. dèpQS«; ond says thllt he/.t;ht) W$$ t1't$ P~l;Ilic·
No1lc;:è Ac;M;!rtlij,ing Clèrk of 11\8 TRI-VALlEY HERALD a ne'MiPaPél' !;If
general c:ircUlatlon .:If¡ d~n8d by Govemmem Cod. Section
OOOCt adJucaled fiB sum by the Sl.IperiOl' COurt Of ttle St¡:¡te of CaIJfomIa-,
CQunty of AI~a (Otdat Nos. 205 370 end 240 625) WhiCh i$
published :P1'trj cln;:l,JletBd In Mun'By and J=l18a&Bnton townships În ~id
county ~rW;I PJ;~te S~ days B weak.
Tha.tthe
PUBUC NOTICE
of which tl'Jo annexed 15 a printed copy, wæ published In every ¡BB\J~ of
,... TRI·VALLEY HERALD, on the following dot..;
SEPTEMBER 22, 2001
I CI!Irtify (or declare) under the penelty of pø~UrythBt the fCrBgoing IIii true.
and co~C't.
)-~
~bllo NoQoo Advo~.'ng 'A11 AC H M ENT 5
CITY CLERK
File # DllIlõl[Q]-~~
4S"" ~LM
AGENDA STATEMENT
CITY COUNCIL MEETING DATE: October 21, 2003
SUBJECT:
ATTACHMENTS:
RECOMMENDATION: 1.
f0P2.
, 3.
FINANCIAL STATEMENT;
DESCRIPTION;
PA 01.039, Nonresidential Development Affordable Housing
Impact Fee Study and Task Force Recommendation
Report Prepared by: Eddie Peabody, Community Development
Director, and Pierce Macdonald, AS$ociate Planner ~
1.
Minutes Authorizmg Nonresidential Development
Affordable Housing hnpaet Fee Study, dated February 6,
2001
Nonresidential Development Affordable Housing Task Force
Minutes
Nonresidential Development Affordable Housing Impact Fee
Study, dated October 7, 2003
Notice of Intent to Adopt a Nonresidential Development
Affordable Housing hnpact Fee
2.
3.
4.
Receive Staff Report, Review the Task Force
Recommendation, and Take Public Testimony
Question Staff and the Public
Give Staff Direction on:
a, Whether a NomesidenUal Developrnent Affordable
Housing Impact Ordinance Should Be Prepared;
b. Whether a Fee Resolution Should Be Prepared; and
c. Whether Certain Categories of Projects Under City
Review Should be Exempted,
None at this time.
Bllckground:
On February 6,2001, the City Council adopted an Affordable ousing Implementation Program that
included program and funding options (included as Attachment I). One fUIJ.ding option was to implement
a commercial linkage fee, also known as a nonresidential devel pment affordable housmg impact fee.
After discussion of the Affordable Housing Implementation Prdgram, as a whole, the City Conncil passed
a motion to direct Staff to undertake the study of a possible eommerciallitikage fee. The Affordable
I ' '
Housing Implementation Plan also included changes to the Duqlin fuclusionary Zoning Ordinance, which
ultimately increased the percentages of affordable units that mul t be built as part of market-rate residential
development and increased the in-lieu fee for affordable units, '
p_________________.____~______________________M___________________ __~__________~__________________________
lan'
G=\PA#\2OQI\(JI-OJ9 Cemmerel.. LIQk\ÇCSR.10-21-o3.DOC A IT AC H M ENT ro
On August 21, 2001, the City Council approved a contract with CottonlBridgeslAssoeiates for the 41.D ùb\Ó1
preparation of a study for a commercial linkage fee. The study was titled the Nonresidential Development
Affordable Housing Impact Fee Study (Fee Study).
On October 2, 2001, the City Council passed Resolution No.713-01 expressing the intent of the City to
adopt a development fee to mitigate the impacts ofnonresÎdential development on the affordability of
housing in the City ofDubiÎn. The public hearing for the resolution was advertised in the Tri- Valley
Herald newspaper on September 22,2001 (included as Attachment 4). The purpose of the resolution was
to alert developers and interested parties that applications for discretionary permits submitted after the
passing of the resolution but before the adoption of the fee could be subject to a Nonresidential
Development Affordable Housing Impact Fee.
In addition, the City Council formed a Nonresidential Affordable Housing Task Force to meet with Staff
and the City's consultants, CottonlBridges, to provide input related to a potential commercial linkage fee.
The Task Force was constituted ofDubiÎn residents, businesspeople, developers, one member of the City
of Dublin City Council, and one member of the Planning Commission.
The Task force held its first meeting on December 13, 2001. Delays in the release of detailed Census
2000 housing and income inforrnation caused the Task Force to cease working for over one year. The
delay was caused by postponements by the D,S, Census Bureau of the release of detailed City-specific
data, as we11 as changes in the way the U.S. Census Bureau processed requests for customized reports
needed for the Fee Study. The D,S. Census Bureau indicated that the city-specific information needed for
the Fee Study would be released in March 2003 and the TaskForce reconvened on February 27, 2003, The
customized report prepared by the US, Census Bureau for the Fee Study was released in May of2003.
The Task Force met on July 31, 2003 to review the preliminary fmdings. The Task Force reviewed the
Draft Nonresidential Development Affordable Housing hnpact Fee Study (Fee Study) on September 4,
2003 and agreed to fotWard a recommendation to the City Council that the City Council adopt a
nonresidential development affordable housing impact fee (in Task Force minutes for September 4, 2003,
included as Attachment 2),
The Nonresidential Development Affordable Housing Impact Fee Study (Attachment 3) and the Task
Force's recommendation are presented and discussed below. Stairs analysis includes the Fee Study's
legal requirements, methodology, data sources, maximum justifiable fees, and the Task Poree's
recommendation for Nonresidential Devc:lopment Affordable Housing Impact Fees.
Legal Requh-ements for Non-Residential Development Affordable Housing Fees:
Commercial affordable housing impact fees are subject to two overlapping sets oflegal requirements, both
Federal constitutional requirements and California state law requirements, codified as the Mitigation Fee
Act (AB 1600).
The Federal constitutional requirements were addressed in Commercial Builders a/Northern California v.
City a/Sacramento 941 F.2d 872. In that case, the Ninth Circuit Court of Appeals upheld a fee identical
to the proposed fee against a challenge that the fee violated the Takings Clause of the D.S. Constitution.
The Mitigation Pee Act (also known as AB 1600) requires that the City make certain findings prior to
imposing any development impact fee, such as the nonresidential development affordable housing fee
proposed by the Fee Study, The required findings are as fo11ows;
(I) Identify the purpose of the fee.
(2) Identify the use to which the fee is to be put. If the IIse is financing public facilities, thc
facilities shall be identified.
2 ~Î
(3) Determine how there is a reasonable rclationship between the fee's use and the type of L4.1 CiQ\9<1
development project on which the fee is imposed.
(4) Determine how there is a reasonable relationship between the need for the public facility and
the type of development project on which the fee is irnposed,
The Fee Study provides the support to make these findings, A full discussion of the legal requirements
can be found on pages 3 and 4 of the Fee Study (Attachment 3).
Study Methodology:
Based on a survey of recently completed commercial linkage fee studies in Northern Californian
(Oakland, Pleasanton, Livermore, Sonoma County, Memo Park, and Mountain View), the Task Force,
Staff and Cotton/Bridges developed a five-step approach to examining the relationship between new
nonresidential development in Dublin and the demand and cost of producing affordable housing, The
methodology is summarized below.
Step I; Determine total employees generated by future nonresidential development based on
employment generation rates for projected land uses in Dublin.
Step 2: Calculate the distribution of householder earnings and household income generated ftom
jobs/industries likely to migrate into the Tri.Valley area.
Step 3; Determine the number of employees by income and earnings generated by land use
designation who would be likely to seek housing in Dublin. '
Step 4: Determine the cost of producing market rate single·family residences and apartments, and'
determine the gap between that cost and what very low, low, and moderate income
households could afford to pay for such housing (known as the "affordability gap").
~tep 5; Determine the maximum impact fee per square foot by multiplying employment generation
factors 'by the affordability gap for households of different income levels, and by the
contribution of the Inc1usionary Zoning Ordinance housing program, and lastly, to examine
the feasibility of the impact fee(s).
Data Sources:
The Nonresidential Development Affordable Housing hnpact Fee Study used a variety of data sources,
which are cited in Chapter 3 of the Fee Study, to provide detailed housing and income information. The
Task Force, City Staff and the City's consultants, CottonlBridges, analyzed data sources including but not
limited to:
· Demographic data, economic data, and housing production trends wm the 1990 and 2000 Census,
including special tabulations for the Tri·Valley region related to household income by industry,
household income by occupation, and the number of workers per household by income;
· Employment generation data fiom the City of Dublin Community Development Department, the
Institute of Transportation Engineers, and San Diego Association of Governments;
· Housing sales priee trends fiom Dataquiek Real Estate Services, rents ftom Real Facts, and data
fiom the 1990 and 2000 Census;
· Housing production cost information for apartments 'and single-family homes in Dublin fioro
developers and from the Home Builders Association of North em California,
FINDINGS:
As detaj1ed in Chapters 2 and 3 of the Fee Study, a strong demand for housing in Dublin, fueled in part by
strong employment growth in the Tri-Valley region, has resulted in a growing gap between housing costs
and the ability of area workers to afford housing. While median housing costs increased between 55 and
120 percent from 1990 to 2000 (depending on the type of housing), the median income in Dublin
3 ~ì
~ '6 o-Ç- loC¡
incrcased by 44 percent (additional detail is included in Chart 2-1 and page 2-2 of the Fee Smdy,
Attachment 3),
According to the calculations of the City's consultants, CottonlBridges, the City of Dublin has the
potential to create 31,270 additional jobs between 2003 and 2025. It is expected that a significant
percentage of these jobs will be filled by individuals living in very low-, low, and moderate-income
households. It is these households that experience the greatest difficulties in finding affordable housing in
Dublin.
A portion of the future affordable housing need will be met through the City's Inclusionary Zoning
Ordinance housing program, in whieh 12.5 percent of new housing units constructed in Dublin must be
affordable to very low-, low-, and moderate-income households. Of tbe affordable units constructed
under the City's inclusionary program, 30 percent must be affordable to very low-income households, 20
percent to low-income households, and 50 percent to moderate-income households,
Nevertheless, a significant gap will remain between the need and demand for affordable housing in Dublin
and the number of affordable housing units available to very low-, low-, and moderate-income residents.
One method of bridging that gap is to charge an affordable housing fee to nonresidential developments.
The Fee Study defines nomesidential deve]opment as office, corporate headquarters, light industrial,
research and development, commercial, retail and hotel development. Nonresidential developments create
employment that generates a need and demand for affordable housing based on the anticipated income
levels of the workforce in those developments. Revenues ftom the affordable housing fee would be used
to buiJd housing in Dublin that very low-, low-, and moderate-income households can rent or own.
Staff estimates that there are approximately 10.9 million square feet of commercial development
rernainingto be built, including the Transit Center Master Plan, On July ]5, 2003, the City CouneiJ
approved the Fairway Ranch proj ect, which waived any potential commercial ]inkage fees for commercial
development in Dublin Ranch. The fees were waived as part of the Fairway Ranch development
agreement to buiJd affordable housing in excess ofInclusionary Zoning Ordinance requirements,
Subsequently, approximately 7.6 million square feet of commercial development could be subject to the
potential nonresidential development impact fee. All fees collected would be used to implement the City's
Affordable Housing Implementation Program (City Council minutes outlining and authorizing the
program are included as Attachment I).
MilXhnum Justifiable Fee;
Based on the Fee Study methodology described above and reviewed by the members of the Task Force,
the maximum justifiable fee for the different industries projected to locate in Dublin ranges from $4.70
per square foot ofnonresidcntial floor area to $ 13.72 per square foot, as outlined be]ow and in Chart 3-
12 of the Fee Study, reproduced below.
4 ~1
Chart 3.12 Maximum Justifiable Fees
Future Land Use Building Size Maximum Fee
KSFJ
Li t Industrial 840 $ 5.46
Office 4,345 ~ I ~Ol '" $ 13.72
Co orate H s 862 $ 13.72
R&D 861 - 861 '" $ 8.81
Nei hborhood Retail 235 $ 10.99
Commercial 3,643 ~ 1,153 '" $ 5.50
Hotel 122 $ 4.70
· The number in parentheses rep;';-sents the square footage exempted from the fee as part of Fairway Ranch.
L\ a. C5b \.DC¡
This maximum justifiable fee, however, could be modified to a rate that is comparable to non-residential
development rates of adjacent communities, so that Dublin can continue to attract new employment
generation in the future, Most cities surveyed adopted impact fees that were 9 to 34 percent of the
maximurn justifiable fee (see Chart 3-10 in the Fee Study for comparable maximum justifiablc fees).
The Task Force reviewed the maximum fees and determined that given the current development
environment, the City could not continue to attract new businesses and employers if the maximum fees
were implemented. The Task Force's recommendation is discussed in the section below.
Task Force Review:
After reviewing the Nonresidential Development Affordable Housing hnpact Fee Study, the Task Force
agreed that there is link between job growth and demand for affordable housing. The Task Force agreed
that affordable housing is an important issue to the community.
However, the Task Force reviewed the maximum justifiable fee established by the Study and agreed that
the current development market would not support the maximum fees. Recent economic conditions have
slowed commercial development in the Tri-Yalley, especially in the office sector, and new fees could
further impact the viability of new commercial projects.
The Task Force reviewed the potential fee in the context of fees adopted by other jurisdictions and in the
context of comprehensive fees, All oftbe jurisdictions reviewed in the Study, with the exception of
Livermore, adopted an actual nomesidential fee that was 9 to 34 percent of the maximum justifiable fee
determined by their commercial linkage fee studies. Livermore adopted 100 percent of its maximum
justifiable fee which was determined to range trom $.7 to $,81 per square foot, The City of Liverrnore's
maximum justifiable fee was reviewed by Staff and found to be an aberration, as Livermore's fee study
used significantly lower construction costs, reviewed only multi-family rental construction costs, and used
low factors for employment generation.
In addition, the Task Force discussed current comprehensive development fees (i.e. water, sewer, traffic,
etc,) for Livermorc and Antioch, cities projected to have job growth similar to Dublin's. ComprehensIve
development fees for Antioch were found to be incomparable because. of the jurisdiction's reliance on
Mello-Roos taxes to mitigate impacts. Comprehensive development fees for Livermore were found to be
comparable to those of Dublin.
At its last meeting on September 4, 2003, the Task Force deliberations focused on a choice of adopting a
higher fee that would not go into effect for one year, or adopting a lower fee to take effect immediately,
The Task Force agreed on the second choice, that the City Council adopt an ordinance and cap the fee at
KSF symbol denotes ·1,000 square feel of floor area.
5"òÎ
$ I per square foot of new nonresidential development due. to the region's difficult economic ?c,~i~\.o <1
(Task Force Minutes included as Attachment 2). The recommended fees are summarized in Chart 3-13,
below. Chart 3-13 reflects the projected amount of revenue expectc::d to be generated by the proposed fee.
Cbart 3-13, Recommended Fee
Future Land Use Building Size Fee Impact Fees
(KSF)
1JSht Indusirial 840 $ .40 $ 336,000
Office 3,044 $ 1.00 $ 3,044,000
Comorate HOs 862 $ 1.00 . . $ 862.000
R&D 0 $ .64 $ 0
Neiehborhood Retail ,-"~
235 $ .80 $ 188,000
Commercial 2,490 $ .40 $ 996,000
Hotel 122 $ .34 $ 41,480
Total; 7,593 $ 5,467,480
The Task Force agreed that it was important to establish a Nonresidential Development Affordable
Housing Program, although the total impact fees that could be collected at this time would be limited to
approximately $ 5.5 million. Staff explained that the City Council reviews all impact fees on an annual
basis and may revise fees at that time.
In addition, the Task Force discussed City Council Resolution No. 713-01, which expressed the intent of
the City to adopt a Nonresidential Development Affordable Housing Impact Fee. The public hearing for
the resolution was advertised in the Tri-Valley Herald newspaper on September 22, 2001 (included as
Attachment 4) The purpose of the resolution was to alert interested parties that applications for
discretionary permits submitted after the passing of the resolution but before the adoption of the fee could
be subject to the fee. The Task Force recommended that the City Council consider an exemption for
projects that are currently under City Review, called "pipeline projects." The Task Foree agreed that the
City Council could consider the exemption as part of their review of the proposed fee.
Ifpipeline projects were to be exempted.,Staffwould require direction as to the category ofprojects to be
included in the exemption. Staff feels that there are many points at which a project could be considered in
the development pipeline. These points include; pre-application submittal, formal project application
submittal, approval by the Planning Commission and/or City Council of discretionary permits, and
Building Permit application submittal, Staff would recommend that the City Council discuss the concept
of exemptions for pipeline projects and provide Staff with that direction.
In summary, on September 4, 2003, the Task Foree passed a motion to make the following
recommendations to the City Council;
I. That an ordinance be drafted and adopted for charging a Nonresidential Development Affordable
Housing hnpact Fee.
2. That any potential fee at this time be capped at $1,00 per square foot of new nonresidential
development due to current difficult economic conditions and that the fee be scaled to the different
types of industries.
3_ That the City Council consider exempting certain categories of projects that are currently under
review ("pipeline projects"),
6~ì
5\"DQ\..!!C1
RECOMMENDATION:
Slaffreconunends that the City Council receive the Staff report, review the Task Force recommendation,
take Public testimony, question Staff and the Public and gívc Staff direction on: (1) whether a
Nomesidential Development Affordable Housing Impact Ordinance should be prepared; (2) whether a Fee
Resolution should be prepared; and if so (3) whether certain categories of projects currently under City
Review should bc exempted from the potential fee.
7 ~/
5 d- ~ \..Do..
Ms. Lowart suggested putting the Fire Station event into December.
Mayor Lockhart advised that she will not be here on November 22M.
The Council agreed to do the Fire Stations on November 15th.
The Council agreed to hold the underpass event on December 6th, from 10:00 a.m. ~
noon. This date is based on whether the Artists can be there that day.
.
NONRESIDENl1AL DEV!:LOPMENT
AFFORDABLE HOUSING IMPACT FEE STUDY
AND TASK FORCE RECOMM£NDA'I'{QN PA 01-039
12:00 midnight 8.3 (430-80)
Conununity Development Director Eddie Peabody presented the Staff Report.
The City Council reviewed theNonresidential Development Mfordable Housing Impact
Fee Study that was prepared and reviewed by the Nonresidential Development
MfordabIe Housing Task Force. On September 4, 2003, the Task Force made a
recommendation to the Council thAt a fee ordinance bç cstab1ish~, that the fee be
limited to $1 per square foot due to current economic conditions, and that the City
Council consider exempting projects under City review. Staff requests City Council
direction on: a) whether a Nonresidential Development Affordable Housing Impact
Ordinance should be prepared; b) whether a. Fee Resolution should be prepared; and c)
whether certain categories of projects under City review should be exempted,
Mayor Lockhart talked about Task Force discussion to do sontething as a two-pronged
approach. Everyone said do it now at a lower rate.
Vm, McCormick commented on one of the chaJ:'t.!l.@d ¡¡,~~. f()J;'¡¡'.rl~}(Ilmple of
neighborhood retail.
Mr. Peabody stated this could be a small shopping center like Safeway Center. General
commercial could be like Scarlett Court. Car dealerships and Hacienda Crossings are
general commercial uses.
Cm. Sbranti asked how fees were detentúned. . What methodology was used?
. CITY COUNCIL MINUTES
VOLUME 22
REGULAR MEETING
October 21, 2003
PAGE 654
~ 3 Db \J,P.
Ms. Macdonald stated the consultants u.sed cens'Uil iJ:J.fOJ:'tt1,ªtiº!:labQµ~Ï11,<i'Uiltry and
income. Office generally has more employees per square foot.
Cm. Oravetz questioned the figure at build out. We will only generate $5 million out to
2025?
Mr. Peabody explained that there were exemptions.
Mayor Lockhart stated the TaskForce was supporting the lowest fee possible. TIùs led to
some really interesting conversations.
Tony Beatty representing IKEA, stated they are all for affordable housing. They carefully
analyze all the fees before they go in for an application. They made application in
August and anticipate they will fall under the category of exemption. They are
comfortable with the fees they have anticipated. Additional fees will be drastic. He
stated Dublin has the highest fees of any other project he has been involved with.
Mr_ Peabody stated Staff would bring back examples of things they could exempt should
they choose to do so.
Vm, McCormick asked how far along IKEA is.
Mr. Peabody advised that they filed an application and Staff is reviewing it, but they
haven't been reviewed by the Planning Commission or City Council. This is a decision of
the City Council on where they want to break it off. This ordinance would go through
the normal timing of introduction and adoption, and there would then be a 60-day
period before it can go into effect.
Mayor Lockhart commented she went into this thinking everybooy needs to pay their
fair share. She understands that concept quite well, but when they started looking at
what the real costs were and the benefits, versus the economy right now, she was
concerned about doing this at all right now. We have done the work with the study.
She would lilœ to see us table the program for a year and look at a healthier economy
and look at focus of where the money is needed. Is there really a gain to implement this
right now? She wasn't sure right now is the time to implement this.
Vm. McCormick stated she felt we need to look at our own revenues and the number of
businesses stacked up to come in. This is our evaluation of the economy. If we delay
this, we need to come back and look<;tt howtheÇity is doing, and base it on that. Are
CITYCOüNCIL'iVÏíNVïES' ...
VOLUME 22
REGULAR MEETING
October 21, 2003
PAGE 655
. '.'<,",,-:.".~ ",. .".,''' \:' ,
'·.r'...'·.',. ,
b L\ Db t.oq
our revenues okay? Do businesses still want to come in" IKEA is in the pipeline so they
shouldn't be subject to this.
Mayor Loçkhart stated she wants to make sure we don't lose our competitive edge.
Cm. Oravetz commented we may need to look at why are we doing this? We are doing a
really good job with affordable housing right now. If we put more taxes on businesses
coming in, it might drive them to neighboring cities. He agreed to table this for a year.
Cm. Sbranti commented if we are telling the residential builders they have to build 12 'h
%, but then businesses who bring in the jobs which cause the need for affordable
housing are given a break, he was struggling with the fairness of this.
Mr. Beatty stated he also represents Airborne DSL and he came up with 35 vacant
buildings in the Dublin - Pleasanton area. There is no cOmmercial ¡'uilding going on_
Dublin is geographically better off than a lot of cities.
Cm. Sbranti stated he didn't want to see the is~tabled f,!~ver,H~believesinthe
fairness of the fee. lie wants to see thjsÇ9mebåç~~di()rfàiiñess, W:è do need to
implement it at some point.
On motion of Mayor Lockhart, seconded by Cm. Oravetz, and by unanimous vote (Cm.
Zika absent), the CoWlcil determined that this issue betabledfQrQtle year.
.
OTHER BUSINESS
12:31 a.m.
Cm. Oravetz reported that he went to a League of California Cities meeting last Thursday
in Moraga and they had folks from ABAG speak about affordable housing. He suggel>1ed
that he and Julia Abdula contact Matthew Callihan and invite him to speak at a City
CoWlcil meeting on a lease-ownership plan.
Mayor Lockhart advised that the Mfordable H,!using Committee that meets had a
presentation by the ABAG group and the Tri- Valley Mfordable Housing group will be a
clearing house where this information will be provided.
CITY COUNCIL MJNurES
VOLUME 22
REGULAR MEETING
October 21, 2003
PAGE 656
::J 5" Ç5h lD '1
CITY CLER'K
File # n~!JJ[Q]-~1Q]
AGENDA STATEMENT
CITY COUNCIL MEETING DATE: October 19, 2004
SUBJECT:
ATTACHMENTS:
RECOMMENDATION:
~
PA 01-039, Nonresidential Development Affordable Housing
Impact Fee Study and Task Force Recommendation r~
Report Prepared by Pierce Macdonald, Associate Planner .
1.
Staff Report for City Council Agenda of October 21, 2003
(without Attachments)
Minutes of City Council Meeting of October 21,2003
Nonresidential Development Affordable Housing Impact Fee
Study, dated October 7,2003
2.
3,
I.
2.
3,
Receive Staff presentation and Public testimony;
Question Staff and the Public; and,
Provide Staff direction on the following:
a. Whether a Nonresidential Development Affordable
Housing Impact Ordinance should be prepared at this
time, and, if so, whether a Fee Resolution should be
prepared; or
b, Whether additional analysis should be prepared and
presented to City Council at a later meeting.
FINANCIAL STATEMENT;
None at this time,
DESCRIPTION:
Background:
On February 6,2001, the City Council adopted an Affordable Housing Implementation Program that
included program and funding options. One funding option was to implement a commercial linkage fee,
also known as a nonresidential development affordable housing impact fee, After discussion of the
Affordable Housing Implementation Program, as a whole, the City Council directed Staff to undertake the
study of a possible commercial linkage fee. The Affordable Housing hnplementation Plan also included
changes to the Dublin Inclusionary Zoning Ordinance, which ultimately increased the percentages of
affordable units that must be built as part of market-rate residential development and increased the in-lieu
fee for affordable units.
On August 21, 200 I, the City Council approved a contract with CotlonIBridgcsl Associates for the
preparation of a study for a commercial linkage fee, entitled the Nonresidential Development Affordable
Housing hnpact Fee Study (Fee Study). On October 2, 2001, the City Council passed Resolution No.713-
01 expressing the intent of the City to adopt a development fee to mitigate the impacts ofnonresidential
___~~___________________________~____"""..."""M.~_____M__M___________________________________________
G:II'A"'~00]\0'-o39 Com...r<lal LI.kI1004\CCSR] 0-] 9-o4,DOC
COPIES T ~
I~
ITEM NO.
. ATTACHMENT 1
development on the affordabilityofhousing in the City of Dublin. The public hearing for the ma~ wiTsb 1...0 ð¡
noticed in the Tri- Valley Herald newspaper on September 22, 2001.
In addition, the City Council formed a Nonresidential Affordable Housing Task Force to meet with Staff
and the City's consultants, CottonIBridges, to provide input related to a potential cornrnereiallinkage fee.
The Task Force was constituted of Dublin residents, business people, developers, one member of the City
Council, and one membcr of the PJanning Commission.
On October 21,2003, the City Council considered the recommendation of the Task Force to adopt a fec
limited to $1 pcr square foot of commercial area (see Attachments I and 2), Members of the development
community addressed the Council and expressed opposition to the fee, stating that the fee would be a
burden to new development and could reduce the attractiveness of Dublin as the site offuture
development. Also, concerns were expressed regarding the City's economic climate, as well as the
fairness of how to share the responsibility of affordable housing between residential and nonresidential
development. The City Council approved a motion to table the discussion for one year.
The Nonresidential Development Affordable Housing Impact Fee Study has been placed on the City
Council agenda pursuant to City Council direction that the Fee Study be brought back in October of2004,
The Nonresidential Development Affordable Housing Impact Fee Study is included in Attachment 3. City
Staff requests further direction trom City Council as to whether or not to proceed with preparation of a
Fee Ordinance and/or Fee Resolution at this time. Additionally, Staff is requesting City Council direction
on whether or not additional analysis is needed by City Council to evaluate the current economic climate.
Staff's analysis of the Fee Study's legal requirements, methodology, data sources, and maximum
justifiable fees are discussed in the City Council staff report for October 21,2003 (included as Attachment
I). Analysis of the Task Force's recommendation for Nonresidential Development Affordable Housing
Impact Fees is discussed in the analysis bdow.
ANALYSIS:
Task Force Review:
After reviewing the Nonresidential Development Affordable Housing Impact Fee Study, the Task Force
agreed that there is a link between job growth and the demand for affordable housing. The Task Force
agreed that affordable housing is an important issue to the community. However, the Task Force
reviewed the maximum justifiable fee established by the Study and agreed that the current development
market would not support the maximum fees. Recent economic conditions have slowed commercial
development in the Tri-Valley, especially in the office sector, and new fees eouId further impact the
viability of new commercial projects.
At the Task Force's last meeting on September 4,2003, deliberations focused on a choice of adopting a
higher fee that would not go into effect for one year, or adopting a lower fee to take effect immediately.
The Task Force agreed on the second choice; that the City Council adopt an ordinance and cap the fee at
$ 1 per square foot of new nonresidential development due to the region's difficult eoonomic conditions.
The recommended foos are summarized in Chart 3-13, of tho October 21. 2003 staff report (included as
Attachment I). The total impact fees that couId be collected at that time would have been limited to
approximately $ 5.5 million.
The Task Force also recommended that the City Council consider an exemption for projects that are
currently under City review, called "pipeline projects." The Task Force agreed that the City Counoil could
consider the exemption as part of their review ofthe proposed fee.
2~
CONCLUSION:
b 7 tJC:; 1ot4
In summary, on September 4, 2003, the Task Force passed a motion to make the following
reeommeodations to the City Council:
}, An ordinance should be drafted and adopted to charge a Nonresid.:ntial Development Affordable
Housing Impact Fee.
2, Any potential fee should be capped at $1.00 per square foot of new nonresidential development
due to current difficult economic conditions, and the fee should be adjusted to the different types
ofindustric::s.
3. Consider exempting certain categories of projects that are currently under review ("pipeline
projects").
RECOMMENDATION:
Staff recommends that the City Council: (I) receive the Staff presentation and take Public testimony; (2)
question Staff and the Public; and, (3) provide Staff direction on the following: (a) whether a
Nonresidential Development Affordable Housing Impact Ordinance should be prepared at this rime, and,
if so, whether a Fee Resolution should be prepared; or (b) whether additional analysis should be prepared
and presented to City Council at a later meeting.
3~
5ß Db 1.oC\
Disoosal
Responsiveness to RFP: 12
Proposer's Experience & Qualifications: 30
Technical Proposal: 30
Compensation & Rates: 28
Total 100
Mr. Behrmann advired that the final weightings would be applied to the raw scores after
this Council meeting to determine the weighted scores and proposal rankings. The
results of the rankings and Staff recommendations would be presented to the Council at
its November 2, 2004 meeting
.
NONRESJDENTIAL DEVELOPMENT AFFORDABLE HOUSING
IMPACT fEE STUDY AND TASK fORCE RECOMMENDATION, P/l 01-0S9
10:20 p.m. 7.2 (430-80)
Associate Planner Pierce Macdonald presented the Staff Report and advised that
discussion of this agenda item was tabled at the October 21, 2003, City Council meeting
for a period of one year due to economic conditions, pursuant to Council direction.
During this meeting, the Council was being asked to provide Staff with direction as to
whether a Nonresidential Development Mfordable Housing Impact Ordinance should be
prepared at this time and, if so, whether a fee Resolution should be prepared, as well; or
direct Staff to prepare additional analysis to be presented to the Council at a later
meeting. The Task Force recommendation was to adopt a fee limited to $1 per square
foot of commercial area.
On motion of Cm. McCormick, seconded by Vm. Zika. and by unanimous vote, the
Council took this issue off the table for further discussion.
Vm. Zika. asked what Pleasanton and Livermore charge.
Ms. Macdonald advised that Livermore's fees flrnged from 7¢/square foot for industrial
up to 8]¢/square foot for retail/commercial. Pleasanton charges $Z.31/square foot.
Vm. Zika. advised that he was in favor of this fee. He sat on the Task force, which
concluded that since commercial establishments hire people who cannot afford to buy
our homes, they contribute toward the need for workforce housil1$ and should share
CITY COUNCIL MINUTES
VOLUME 23
REGULAR MEETING
October ]9, 2004
PAGE 500
5q Db /.oct
some of the costs. In his opinion, it is inappropriate to dump the costs on the new
homeowners. He proposed that Dublin adopt the fee and charge this commercial linkage
fee for new development in the area.
Mayor Lockhart asked if anyone was notified that this issue would be on the agenda.
Ms. Macdonald advised that the item was an update and was not noticed as a public
hearing.
Mayor Lockhart expressed concern about adopting the fee ri,ght now and recommended
that the business community have plenty of notice so that can comment on it,
Ms. Macdonald advised that the proposed Ordinance would require preparation on
Staff's part and then would have to go through two public hearings, both of which would
be noticed,
City Manager Ambrose advised that the issue before the Council tonight was whether or
not the Council wanted Staff to bring back the Task Force recommendation as a proposed
ordinance.
Cm. Sbranti advised that he also sat on the Task Force, and the thought was that
everyone, residential and commercial developers, should contribute.
The Council discussed the issue and agreed that it would be important to notify the
business community that this item was back on the table for discussion and upcoming
Council consideration.
On motion of Vm. Zika, seconded by Cm. Sbranti and by unanimous vote, the Council
directed Staff to prepare a Nonresidential Development Affordable Housing Impact
Ordinance and fee Resolution, and return to the Council at a future meeting.
Mayor Lockhart reiterated the importance of notifying the business community of this
issue,
.
APPROVAL OF FINAL ESTIMATE, CONTRACT NO. 01-10,
DUBUN BOULEVARD WlD~NING - VILlAGE PARKWAY TO SIERRA COURt
10:28 p.m. 7.3 (600-35)
Public Works Director Melissa Morton presented the Staff Report and advised that on
May 18,2004, the City Council accepted the Dublin Boulevard Widening improvements
under Contract No. 01-10 and directed Staff to send a proposed Final Estimate to Granite
CITY COUNCIL MINUTES
VOLUME 23
REGULAR MEETING
October 19, 2004
PAGE SOl
_.._.n ......
1.0 0 "iJ 1.0 q
Current Regional Non-Residential Affordable Housing Impact Fees:
Comparable fee information included in the Non-Residential Development Affordable Housing
Impact Fee Study in Chart 3-10 was taken in October of 2003. Since that time, one City in the
Tri-Val1ey Region has increased its fee from $ 2.28 to $2.31 per square foot, and a new city,
Walnut Creek, has established a $ 5 per square foot fee for non-residential development to share
the cost of providing affordable housing. The information in Table 4 includes the current non-
residential development affordable housing fees charged by the cities of Pleasanton, Livermore
and Walnut Creek.
Table 4: Comparable Fees of Otber Jurisdictions (as of Februar 2005)
City Fee Category Fee Amount
(pe. squa.e foot
unless noted)
Pleasanton $ 2.31
Livermore Retail Commercial $ .809
Discount Service $ .609
Retail
Offiec Commercial $ .52
Hotels/Motels $ 397 (per room)
Manufacturing $ .249
Warehouse/Storage $ ,072
Business/ $ .516
Commercial Park
Industrial, High $ .256
Industrial, Low $ .162
Walnut Creek Commercial, Retail, $ 5*
Office, R&D,
Hospital, and
Medical
San Ramon n/a n/a
Danville n/a n/a
Alamo n/a n/a
'Scheduled to be adopted by the Walnut Creek City Council on February 15, 2005.
. ATTACHMENT f(
....... ..-...... -
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RESOLUTION NO. 18 -01
A RESOLUTION OF THE CITY COUNCIL
OF THE CITY OF DUBLIN
*1:*_*,****
ADOPTION OF THE AFFORDABLE HOUSING IMPLEMENTATION PROCR1J.l'Il p~
WHEREAS, the State mandated local jurisdictions, including cities. provide housing for all income
levels; and
WHEREAS, the Association of Bay Area Governments issued a 2000 Regional Housing Needs
Determination for bay area cities and counties and assessed that Dublin would need to provide 5,436 additional
units (percentages of which must be affordable to wry low-income, low income, moderate--income and above
moderate-income households); and
WHEREAS, the City of Dublin has collected in-lieu fees from developers dedicated to funding
affordable housing programs to provide housing for all income levels, including very low-income, low-income,
and moderate-income levels; and
WHEREAS, on April 4, 2000, the Dublin City Council held a workshop to examine 1) possible funding
options for affordable housing programs, 2) programs on which to spend the in-lieu fees that are collected, and
3) potential target groups toward which the programs could serve; and
WHEREAS, on October 3,2000, the Dublin City C01D1cil directed Staff to research specific programs,
funding options, and target groups for the pUIpOse of allocating Dublin's in-lieu fees; and
WHEREAS, the programs options researched included down payment assistance, acquisition-
rehabilitation, City assistance for creating new affordable multi-family units, and rental assistance; and
WHEREAS, the funding oprions iliat were researched were I) implementing Commercial Linkage Fee
and 2) doubling the in-lieu fees; and
WHEREAS, the target groups studied consisted of I) seniors, 2) teacbers, 3) first-time home buyers, 4)
low-income renters, and 5) disabled persons; and 6) members of Dublin's Workforce, including City and non-
City personnel
WHEREAS, guidelines were developed for implementing the fore-mentioned programs, ftmding
options, and target groups in the attached document referenced as the Affordable Housing Implementation Plan,
Exhibit A; and
NOW, THEREFORE, BE IT RESOLVED that the City Council of the City ofDuhlin hereby adopts the
Affordable Housing Implementation Plan.
PASSED, APPROVED AND ADOPTED this 6th day ofFebmary 2001.
AYES: Couocilmembers Lockhart, McConnick, Oravetz, Zika and Mayor Houston
NOES: None
ABSENT: None
ABSTAIN: None
ATTEST;
^,.,-~"_.
Mayor
g:\boUlling\Împlem-'" ptugnm""'..... aOOpt.Ing HIP
K"/GI2~~lIremACeH~ËNT ~r
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AFFORDABLE HOUSING IMPLEMENTATION PLAN
EXHIBIT A
1.ø3 ~ loq
I. PURPOSE
A serious shortage of affordable housing exists in the State, Bay Area and in the Tri Valley. The State
Legislature has stated that "the lack of affordable housing" is a critical problem wlúch threatens the
economic, environmental, and social quality oflife in California" Of particular concern is the shortage
of housing for low-income and moderate-income households. (Government Code Section 65589.5)
The Legislature has enacted policies to encourage more affordable housing: requiring cities to address
the issue in their housing elements, provide for density bonuses and second dwelling units, limiting the
grounds on which affordable housing developments may be disapproved, and others. (Government
Code Sections 65583, 65589.5(d), 65852.150, 65913, 65915.)
In response to a demonstrated need for affordable housing and State mandates, the City of Dublin will
implement funding policies and program approaches to serve selected target groups. This Affordable
Housing Implementation Plan contains policy guidelines that, once implemented, will assist residents
in the Community and Tn- Valley area in meeting their housing needs and provide a range of housing
opportunities for all income levels. These guidelines will be incorporated into Dublin's IndusiolUll)'
Regulations know as Section 8.68 ofthe Dublin Zoning Ordinance and enacted through corresponding
resolutions and staff action.
II. FUNDING AFFORDABLE HOUSING PROGRAMS
A. Intent.
The City of Dublin shall implement policies designed to generate adequate funding for affordable
housing programs referenced in Section IlIA of this report and in correlation with the purposes and
intent of the Inclusionary Regulations.
B. Funding Options
Funding options are as follows:
l. In-lieu Fees.
Pending final approval ITom the City Council, Dublin's in-lieu fees shall be increased to $2.00 per
square foot for single-family developments and $1.50 for multi-family development.
2. Commercial Linka2e Fee
a. Nexus Study.
Pending final approval ITom the City Council, staff will have the Nexus Study prepared that is
required to implement a cornmerciallinkage fee.
b. Fee Detennination.
The Commercial Iinkage fee shall be calculated using a fonnula determined by the results of the
required Nexus Study and adopted via ordinance and existing in~lieu fee resolution by the City
Council.
Page 2 of7
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III. PROGRAMS
A. Intent.
The program options proposed in this section will assist in providing affordable housing for specified
target groups in the City by assisting in the development and preservation of private and non-profit
affordable owner and rental housing for lower-income households and related programs that help
residents to enter or remain in low-cost housing. These program options include down payment
assistance, acquisition-rehabilitation, rental assistance, and new construction of affordable multi-
family units.
B. Approved Program Types.
Dublin could collect approximately $21 mî11ion in in-lieu fees based on projected development over
the next five years, if a commercial linkage fee is implemented and the current in-lieu fees are doubled
(assuming that developers continue to pay the in-lieu fees instead of providing units under the 5%
inclusionary requirement). Dublin currently hw¡ col1ected about $5.1 million in housing in-lieu fees to
date.
The City Council could adopt the priority program list below and leverage the collected affordable
housing in-lieu 3lld commercia] linkage fees in order of processing priority. For acquisition-
rehabilitation 3lld new construction of affordable muhi-family unit projects, the City Council could
approve funding on a project-by-project basis. The agencies and amounts of in-lieu fees allocated to
down-payment assistance and rental assistance programs could be determined and approved annually
by the City Council and distributed according to the City's fiscal year cycle.
Priority 1: Acouisition-Rehabilitation (satufies State's Housing Element requirements for
creatin!! permanently affordable units but does not eount toward meeting ABAG's
Regional Housing Needs Determination Numbers)
This option deals primarily with housing for low-income renters many of who may be
designated target group members, e.g. seniors, teachers, and some members of the
workforce. Based on the projects profiled in the Supplemental Affordable Housing Report,
City assistance for each acquisition-rehabilitation project could potentially range ftom
$230,000 to $750,000. Primary costs to the City for acquisition-rehabilitation leveraging
wil1 occur in matching Federal and State funds and initially supporting developer
applications for state and federal financing. Acquisition-Rehabilitation demonstrates the
best opportunity to produce the most affordable units with the least cost, because there are
no land development or construction costs. Additional benefits for aequisition-
rehabilitation include the ability to keep the units affordable via a deed restriction, thus
satisfying the State's requirements for permanent affordability.
Page 3 of7
a, Strategy
At least once every five years, the City shall inventory potential acquisition-rehabilitation
sites by compiling a list of property owners interested in selling their multi-family units, so
that if and when the City is approached by interested developers the City can distòbute this
list to them. Annually, the City shall issue a Request for Qualifications (RFQ) to for-profit
and non-profit developers for the purposes of maintaining a viable contact list of non,profit
and for-profit developers in the event the City is approached by a multi-family unit
property owner wishing to sell. To initiate possible acquisition-rehabilitation projects, the
City shall also annually issue an RFP that indicates available funding and request that
developers identify possible properties and submit a development proposal. Once an
apprüpÒate site has been identified and contact established with the property owners, the
developers would negotiate with those property owners and apply for additional state and
federal finaneing_ The City would support the developer's proposal by contractually
dedicating the necessary funds to an escrow or some other holding account until the
developer can secure complete finaneing_ In cases where the City has dedicated funding
toward an acquisition-rehabilitation project and the developer can not secure complete or
adequate financing, the funding shall be shifted back into the housing in-lieu fee fund.
cPS- Db Loq
b. Tal¥et GrouÐS
This option will serve the following target households whose income does not exceed 800!o
of the County median income. If more than one request for funding is received at a time,
pòoòty will be given to applications/proposals that best serve the target groups and order
of preference listed below:
I. Dublin Residents who are seniors
2. Residents of Dublin who are pennanently disabled
3. Residents of Dublin who are members of Dublin's workforce (includes City and non-
City personnel and teachers)
4. Families with children that currently reside in Dublin
5. Other Dublin Residents
6. Non-Resident Seniors
7. Non·Resident Disabled Persons
8. Other Non-Residents
Priority 2: Construction of new affordable multifamilv units (satisfies State's Housing Element
requirements and counts toward meeting ABAG's Regional Housing Needs
Determination Numbers)
This option is the least affordable due to high land and construction costs, Pòmary costs to
the City would occur in having to buy down (subsidize) the cost of the units either to the
developer or through deferred or zero interest loans to the target household or both.
However, possibilities exist for creating permanent affordable housing by constructing new
affordable multi-family units each time a new residential housing development application
Page 4 of?
· d ·d· b h C" . h .. fi I . f: ·1 ~ /..Q ITI~ Lo q
IS un er conSI eranon y t e Jty, mcreasmg t e opportumtles or mu tl- amJ y Ufllt - C)
construction, unlike acquisition-rehabilitation, where the opportunities are scarce.
a. Strater¡y
The City shall on a project-by-project basis negotiate and offer developers of five or more
units a per-unit subsidy toward the development ofinc1usionary units andlor offer loans on
a deferred or zero interest basis to target households that purchase inclusionary units. If
necessary, the City shall provide additional subsidies to bridge the affordability gap
between target income groups for both rental and ownership units. The City Council shall
approve the subsidy amoultts and target income group levels for each project, The units
subsidized by the City shall be recorded at the County Clerk's office with deed restrictions
indicating their affordability for a period no less than 60 years. Staffwill negotiate the
tenus and conditions of the subsidy on a project-by-project basis.
b.1arrzet Group-s
This option is governed by the Inclusionary Regulations stipulation that 40"10 of the units
will be dedicated to very low-income households, 40% to low-income households, and
20% to above moderate-income households. In addition to the inclusionary requirements
and if more than one request for funding is received at a time, priority will be given to
applications/proposaJs that best serve the target groups and order of preference listed
below;
i.) Rental Units
1. Dublin Residents who are seniors
2_ Residents of Dublin who are permanently disabled
3_ Residents of Dublin who are members of Dublin's workforce (City personoel,
Dublin police officers, Dublin fire fighters. teachers, retail clerks, bank; tellers,
grocery clerks, and others in the retail and customer service industries for
employers in Dublin)
4. Families with children that currently reside in Dublin
5. Other Dublin Residents
6. Non-Resident Seniors
7. Non-Resident Disabled Persons
8. Other Non-Residents
ii) For-Sale Units
I. Residents of Dublin who are First-Time home buyers and members of Dublin's
workforce (City personnel, Dublin police officers, Dublin fire fighters, teachers,
retail clerks, bank tellers, grocery clerks, and others in the retail and customer
service industries for employers in Dublin)
2. Residents of Dublin who are First-Time home buyers
3. Other Dublin Residents
4. Non-Resideltts of Dublin who are First-Time home buyers
Pa.ge 5 of7
Priority 3: Down Payment Assistance (Does not satisfy State Homing Element Requ~~ l£q
counts toward meeting ABAG's Regional Housing Needs Determination Numbers)
Programs funded under this option would typically range in subsidy :trom $15,000 to
$50,000. Estimates for the number of households served would be determined by the
amount allocated, For instance, if25% of the estimated $21 million ('" $5.25 million) that
could be collected trom in·lieu and commercial linkage fees over the next five years were
allocated to down-payment assistance programs, about 105 to 350 households could be
served. Although units produced under this option will not satisfy ABAO's requirements
as permanently affordable unless in conjunction with the purchase of an inclusionary unit,
it has the capability of assisting members of the workforce and households lacking money
for down-payment and closing costs the chance to own units in Dublin.
a. Strate~
Annually staff will inventory and review available down payment assistance programs,
administer program funding, and evaluate the City's down-payment assistance programs.
The City Council will, via resolution, annually approve and allocate funding for the City's
down-payment assistance programs. For now, the City should continue to participate in
the Alameda County Mortgage Credit Certificate Program and begin participation in the
following down-payment assistance programs:
· Community Assisted Shared Appreciation (CASA) Program-$200,OOO,
· East Bay Delta Lease Purchase Program~No funding required,
· California Housing Loan Insurance Fund (CaHLIF) Home Loan 97 & 3 Program-
$10,000
The City shall consider expanding its participation to other programs, such as CHF A's
HELP Program and the School Facility Fee Down Payment Assistance Program, after a
period of one year (when staff gains experience and exposure to the programs and funding
processes).
b, TW'f[et Groups
This option will serve the following target groups that are listed in preferential order:
I. Residents of Dublin who are First· Time home buyers and members of Dublin's
workforce (City persOllllel, Dublin police officers, Dublin fire fighters, teachers, retail
clerks, bank tellers, grocery clerks, and others in the retail and customer service
industries for employers in Dublin)
2. Residents of Dublin who are First·Time home buyers
3. Other Dublin Residents
4. Non-Residents of Dublin who are First-Time home buyers
Priority 4: Rental Assistance (satisfies State's Housing Element requirements for preventing
homeJessness and providing housing assistance to lower income households)
The City would provide rental assistance in the fonn of short-term grants to agencies. The
funds would be allocated annually or another period of rrequency set by the City Council
to agencies that are working to prevent homelessness, and provide interim aod or traosition
Page 60f7
support for target households. The City should continue funding Allied HOusing't;' 2. 0 b LP'1
Scholarship Program that will require a maximum $36,000 in in·lieu fees for the
2001/2002 Fiscal Year (depending on HOME funds allocation for housing subsidies) and
begin funding Echo Housing's Rental Assistance Program with an initial annual allocation
:from in-lieu fees of $20,000.
a. StrateflV
The City will distribute annually a Notice of Funds Availability (NOF A) that lists the
criteria and deadline for applying for available rental assistance funds. The City Council
will annually award the grants to chosen agencies. Staffwill monitor the grants for
compliance and administratively distribute funds.
b, Turffl:t flrQUos
50% of the funds allocated to rental assistance programs shall serve those persons whose
income levei falls below 50% of the area median income. The remaining 50% of allocated
funds shall serve those persons whose income level is between 50% and 80% of the
County median income.
C. Method of Allocation.
For each acquisition-rehabilitation and new construction of affordable unit project, the City Council
shall, via a resolution, determine the amount of in-lieu fees to be allocated. For down-payment
assistance and rental assistance programs, the City Council shall, via a resolution, annually select
participating agencics and detennine the amount of in-lieu fees allocated to those programs at least
once annually from the date that this Housing Implementation Plan takes effect.
D. Amendments to Program Types and Funding Allocation.
The City Council may amend program types, funding allocation, and/or target group priorities
through adoption of a resolution on an annual basis.
Page 1 of7
.,
00¡ db /'pCf
RESOLUTION NO. 173 - 01
A USOLUDON OF THE CITY COUNCH..
OF THE CITY OF DUBLIN
***.**********~**....~*~~..A*******..A
EXPRESSING THE CITY'S INTENT TO ADOPT DEVELOPMENT FEE
TO MITIGATE THE IMPACTS OF NON~RESIDENTJAL DEVELOPMENT
ON THE AFFORDABH..ITY OF HOUSING IN THE CITY OF DUBLIN
RECITALS
WHEREAS, the Council has authorized but not yet adopted a fee to mitigate the impacts of
nonresidential development on the affordability of housing in the City of Dublin (the "Fee"); and
WHEREAS, the City has engaged a consultant, CottonIBridges Associates, to prepare a study that
will examine the need for affordable housing in Dublin and impact of nonresidential development on the
affordability of housing in DubJin; and
NOW THEREFORE, be it resolved that the City intends to adopt an affordable housing
development jmpact fee that would be imposed on nonresidential development, The City bas engaged a
<:onsuhant, CottonlBridges Associates; to prepare a study that will examine the need for affordable housing
(for moderate, low and very low incomes) in Dublin and impact of nonresidential development on the
affordability of housing in Dublin, Should the consultant find a næd for affordable housing and an impact
ftom nonresidentiaJ development, the consultant will reçommend a fee structure to mitigate the impact on the
affordability of housing in Dublin. The City anticipates that the fee structure will be based on the fee upheld
in Commercia/BuIlders of Northern Calif. v, City ofSacrmmmto (1991) 94] F.2d 872. In that case, the fee
study demonstrated that non-residential development has an impact on the affordability ofhou!ling, by (a)
creating new jobs in the city and (b) thereby creating additional demand for housing, particularly affordable
houting. The fee amount was based on the number of jobs created for low-income persons by development
and the amount of money in addition to that earned by the low-income persons that would be required to provide such pel'lions with housing. The fee would be aUooated among the various types of non-residential
development (e.g., office, retail, and industrial) consistent with the number of Jow-income jobs created by
the development type. For ease of administratioll, the fee would likely be imposed on a per-square foot basis
based on number of jobs oreated by each development type,
PASSED, APPROVED, AND ADOPTED BY the City COuncil of the City of Dublin on this 2nd
day of October, 2001, by the following votes:
AYES: CounclhaelØben Lockhart, MeCormkk, Ontvetz, Zika and Mayor BOlatoD
NOES: Noae
ABSENT: Noae
ABSTAIN:
None
4~
ATTEST:
.doc (Item 6.1)
ATTACHMENT (0
K'fOlto.2..o1
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