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HomeMy WebLinkAboutPC Minutes 02-06-1996 JT CC/PC Study Session .-r.-._.., ~ ~ Joint Study Session City Council and Planning Commission Meeting - February 6, 1996 A special Study Session of the City of Dublin City Council and Planning Commission was held on Tuesday, February 6, 1996, in the Dublin Civic Center Regional Meeting Room. The meeting was called to order at 7:00 by Mayor Houston. ROLL CALL Present: Mayor Houston, Councilmembers Burton, Barnes, Howard and Moffatt, Commissioners Zika, Geist, Johnson and Lockhart; Richard Ambrose, City Manager; Elizabeth Silver, City Attorney; Laurence L. Tong; Planning Directar; Tasha Huston, Associate Planner; and Gaylene Burkett, Recording Secretary. Consultants: Ms. Gouig and Ms. Seifel Absent: Commissioner Jennings PLEDGE OF ALLEGIANCE TO THE FLAG Mayor Houston led t'he Council, Commission, Staff, and those present in the pledge of allegiance to the flag. ADDITIONS OR REVISIONS TO THE AGENDA ORAL COMMUNICATIONS None WRITTEN COMMUNICATIONS None PUBLIC HEARING None NEW OR UNFINISHED BUSINESS City of Dublin Housing Program & Inclusionary Zoning Ordinance The Mayor Houston explained the goal was to give direction to staff on what the Inclusionary Zoning Ordinance should include. Tasha Huston, Associate Planner, introduced the two consultants that were hired to help the City identify the Affordable Housing issues so that the City could develop a workable program. She gave a brief outline on their backgrounds. She stated why we need an Inclusionary Housing Ordinance. Ms. Huston went over what Affordable Housing was and how it effected the City of Dublin. She used an overhead chart to show Income Categories according to family size and affordable monthly housing cost. Mayor Houston asked if the chart reflected Alameda County median or City of Dublin. Ms. Huston stated the chart reflected Alameda County. Joint Study Session g February 6, 1996 [2-6ssmi] . . ~ ~ Ms. Seifel explained in detail how these number were arrived at. She stated they were estimates. By State and Federal law, the City of Dublin must use Alameda County average to calculate the median income levels. Cm. Zika stated that HUD did not have a moderate income category. Ms. Gouig explained how HUD defined their numbers, and that yes, HUD did not have a moderate income category. Cm. Zika asked what category do we use if we want to get Federal funds. Ms. Gouig explained how localities will adjust to the limit for the categories they were using. Cm. Burton stated the definition of Affordable Housing is spending 30% or less on housing was unrealistic in today's market. Ms. Huston showed a chart of typical salaries by income categories. Ms. Seifel made a presentation on the information that the Planning Commission had requested at their Study Session on January 3, 1996. She described how she arrived at the information she was presenting. She stated what a family of four could afford for a home price or how much they could afford to pay far rent. She stated that underwriters typically use 30% for being able to afford a home. She showed a chart on affordable home price and rent ranges. She also showed a chart on comparison of Housing Units and Households by Income Level far 1990-1995. She went into detail on how she arrived at the information on the charts. Frank Ruskey asked where welfare and retirement income falls in the charts. Ms. Seifel stated that would be considered very low income. Mr. Ruskey stated that income levels have reduced since 1990 census information. Most middle class Americans have taken a reduction in pay. Ms. Seifel stated that the wage chart was based on 1994 salary figures from the State Employment Development Department. The Median income level information was from 1990 census information. Mayor Houston stated that the percentage of renters units in the City of Dublin appears to be approximately 25% of the housing stock, if you take out very low and low. ISSUES & PRINCIPLES DISCUSSION Mayor Houston stated the Housing Element called for 20 units as a minimum project size to determine which projects would be subject to the Inclusionary regulation. He stated he had not heard much controversy on that number. Cm. Moffatt asked when the 20 units would apply. What about phasing of projects. Ms. Gouig stated that there could be language written into that Ordinance that would address that. Mayor Houston stated most developers would not build 18 units at a time to avoid having to apply the Ordinance. Ms. Gouig agreed. Cm. Moffatt stated that sometimes independent builders may build one house a year, would the number be accumulative? Ms. Huston stated that language could be included that a project would include approvals on one site within a year, or something to that effect. Mayor Houston asked if anyone had objections on the 20 units. Cm. Barnes asked if you could go back and change the 20 units at a later date. Mayor Houston stated it could be changed with a General Plan amendment. Joint Study Session 9 February 6, 1996 [2-6ssmiJ . . • • Cm. Moffatt asked if they would consider less than 20 units at a lower percentage. Mayor Houston stated that he was comfortable with 20 units and that there was consensus with that number. Mayor Houston asked about the percentage of housing which would be affordable. He stated that we should not tailor make something for ourselves with the carrot out here for State or Federal money. We need to do what is best for Dublin. He objected to the comparison against Alameda County. He felt we should be compared to our neighbors in the Tri- Valley and San Ramon and Danville. He felt ABAG figures are always being revised, and we should not be comparing ourselves to them. He was in favor of producing more moderate housing. Cm. Burton commented that he wondered if we needed Inclusionary Housing. He felt it was a social issue. The end buyer was going to pay the inclusionary requirements in order to meet the needs of the whole City. Are we doing a disservice to incoming people to balance our housing needs. You can't address affordable housing, it was more a social issue. He felt is was unfair. He stated we can make smaller houses on smaller lots. He thought we could build sweat equity houses or there was existing property in Dublin that could have granny units approved for college students, that could create more housing. We could have mobile homes or pre-manufactured homes. There was nothing wrong with them except our image of them. He stated we could specify certain areas where these types of homes could ga Cm. Moffatt stated Cm. Burton had some good points, but felt he was way off base. He was an advocate for starter type homes. He felt that we might be building in areas that might not want to build lower end homes, it may create a whole new set of problems. Cm. Barnes disagreed with Cm. Burton. She believed that we do need an Inclusionary Housing Ordinance that could provide affordable housing that was dispersed throughout the community. Cm. Zika stated he liked the Inclusionary Housing Ordinance idea and the idea of sweat equity houses. We could disburse these throughout the community with CDBG funds. Or build starter homes, use tax credits, put limitations on when it come time to sell. The City would participate in the profit of the sale. Cm. Johnson said first we ha~e to decide what affordable housing was: very low, low, ar moderate. The market place could take care of the moderate, as it does now. He felt the market would not take care of the very low or low, but most developers are interested in the bottom line. Cm. Lockhart did not see a developer building a project with homes that were semi-finished, and might not be able to afford to do the landscaping because he was putting a second story on and you move next store to a guy who is continuously in the process of building or improvements. Let the developer build his project and pay in lieu fees. Cm. Geist agreed with Cm. Lockhart. She felt there was a definite need for the Inclusionary Ordinance. You have to provide an area where there could be things accomplished. There should be allowances made in developments over 20 units. Mayor Houston thought a great project in town was the Arbor Creek project. He gave figures of the wide variety of units they had. A 690 sq. ft. townhouse sold for $123,000. One way to solve the problems out front is to have the developer have different sizes within a community. The only way to get the cost down was to build different types of product, with a wide variety of costs and people who live there. Mayor Houston addressed the issue of percentage of units in each project that could be affordable. He stated that 5% was a good start for projects to provide affordable housing. Cm. Zika asked how do we base the fee if they include 5%, or how would that be figured. Mayor Houston bypassed that question for now. He stated the next issue was the targeted group. Who are we trying to service and put together a program for. Cm. Burton stated that according to the charts, teachers and police were considered low income. He had a problem with that. He acknowledged that was for a family of four with one working person in the family. He felt we should provide housing for people who have jobs in Dublin. Joint Study Session 1 O February 6, 1996 [2-6ssmi~ . . • ~ Cm. Johnson stated we needed to have 8% low income housing based on the figures given. For all projects built in the future, we would have to have 20% for low income. Cm. Lockhart stated that if future units met the 5% requirement, that will make up for the shortage that we have now. Ms. Seifel stated what moderate income was, and if we compare Dublin to the County, the County had more low and very low income people. She said 20°/a was a very low number when proportioned to the 50% of inedian income. Cm. Burton stated that people coming in buying homes to subsidize 20%, that would be asking a lot. It was not just the responsibility of those moving in, it is all of ours as a community. Mayor Houston asked if the Specific Plan allocated a percentage within a percentage of which we are trying to serve. Cm. Zika suggest 3/5 to very low, 2/5 to low and let the moderate take care of itself. Mayor Houston felt with new projects. $134,000 units would not be seen in Dublin for a long time. Ms. Seifel stated that it was very hard for very low income people to afford a unit in the whole Bay Area. But they could afford rent. Cm. Johnson stated that 5°/a made is easy to accomplish. We wanted to be able to reach that goal. Cm. Howard agreed to the 5%. Ms. Silver stated that the first percentage would be the total units within the project, the second percentage would be what percentage of those units would be low, very low, etc. . Cm. Barnes stated we have to strive to provide homes within the low and very low. Cm. Barnes thought 10% would be fair. Cm. Moffatt asked what standards did we have to follow. What was the criteria for setting this up. Ms. Gouig stated that the criteria in the Housing Element stated that we must create affordable housing within our community. Then, when drafting our element, we needed to use the ABAG number. Many communities challenge the ABAG numbers, but we should use the ABAG numbers as a bench mark. It was definite that we need low and very low housing. Mayor Houston stated that the consensus was that 5% was OK. Of the 5%, 2% should be very low, 2% should be low, and 1°/a should be moderate. The next issue was project type requirements. He stated that some day we will have another apartment housing unit going into Dublin. Cm. Moffatt stated he envisioned some of our existing housing stock could be transferred into a main unit and a granny unit that could be counted towards the total for affordable units. Mr. Ambrose stated that we have already adopted 2nd unit or granny units Ordinance. Mr. Tong stated that there were about 61ega1 granny units in Dublin. He stated that they were mostly 2nd story units. Cm. Burton stated that there may be more in the future it this were to go through. Cm. Zika stated the only way to meet very low was through rental units. They should not be excluded. Mayor Houston stated they would include all types of units, rental, new, granny, etc.. Mayor Houston stated the next issue was how to set rents and/or sales prices. He felt we should stay out of it. Cm. Zika stated that one type of situation that could be on the unit was when they go to sell, the City participates in the profit to put money back into the program. Joint Study Session 11 February 6, 1996 [2-6ssmi] . . ~ . Cm. Barnes asked how realistic is it for a developer to build a smaller house. She stated for a long time, there have not been developers who would be willing to build 1,000 square feet house instead of 2,500 to 3,000 square feet. Mayor Houston stated that we should take out the word house, and put in the word unit. Cm. Barnes asked how realistic are we being. Can we achieve these goals? Cm. Johnson stated that we would have to give exact numbers to the builder. There has to be a way to get the developer to either build the very low or low income units or pay in-lieu fees. Cm. Zika stated we could charge a fee based on the selling price of the homes. Cm. Barnes asked what could the fees be used for. Ms. Gouig stated that most communities collect the in-lieu fees. She stated it was a wide open field on how to use the money. She stated it could be used towards administrative fees. Mr. Ambrose asked if this program was implemented, we would have to define what affordable means. What does the 5% mean to the builder. Cm. Moffatt asked if we don't meet the affordable housing needs, will we lose our block grant funds. Ms. Gouig stated we would not lose our block grant funds now. Every now and then there is legislation proposed to do that, but then most cities would lose their block grant funds. Mayor Houston stated by using ABAG numbers, we would not be right. LeYs use our own numbers and leave ABAG numbers out of it. Mayor Houston asked what median income figures are we going to use. Alameda County or Dublin. Ms. Seifel stated it is better to stick with County numbers. Mayor Houston disagreed. He felt our economic community was not typical of Alameda County, but more toward the Tri-Valley, including Danville and San Ramon. Mayor Houston felt we were being penalized because our average household size was 2.8 and not 4. Mr. Ambrose stated that for a household of 4, you would be looking at a certain unit size different from that of a household of 1 or 2. Ms. Gouig stated that HUD takes all that into account when putting out their numbers. Cm. Moffatt asked how were the numbers adjusted. Cm. Johnson asked if on table 6, were the Dublin numbers from the 1990 census. Mayor Houston asked the best way to accomplish this. With a new census, Dublin income will be higher in the year 2000. Ms. Gouig recommended they use the HUD median income because it comes out every year. It was a stable source of numbering that was not available elsewhere. Mr. Ambrose stated that there was not information on an annual basis for Dublin, that was why they recommended using HUD numbers. Ms. Gouig stated that no one was putting out annual numbers for Dublin. Cm. Zika stated that HUD figures were the standard. If they were wrong for us, they were the same percentage wrong for everyone else. Mayor Houston declared a 5 minute break. Mayor Houston stated we have members from the building communities present and wanted to hear from them. Joint Study Session 12 Febmary 6, 1996 [2-6ssmi] . , ~ i Matt Koart, Kaufinan and Broad (K & B), passed out a letter to the City Council and Planning Commission. He indicated that K& B's perspective was that the best way to provide very low and low income housing was through rental projects and the use of taY credits. Provide affordable housing obligation off-site. It is important that they be able to transfer their obligation for single family housing to multi-family homes. It was called affordable by design. Danville can go as high as 140% of inedian level. They are deed restricted units. In other communities, in-lieu fees have been used, but they have not required the developer to build it. He addressed the Rental Housing Ordinance that currently exists, he wanted to know why it was developed in 1989. He felt that a new housing project should not be hit twice, by the Rental Housing Ordinance and the Affordable Zoning Ordinance. Cm. Burton asked if the builder was asked to build affordable housing and they choose to build single family, does that mean they don't have to do that. Can they build some smaller units to match the larger ones in lieu of fee. Mr. Koart stated that the K& B project in Eastern Dublin had single family units with 1300 to 2000 sq. ft. and townhomes at 1100 to 1600 sq. ft. So K& B was building smaller units. Cm. Zika stated the affordable homes would not have the same amenities, he asked for some examples. Mr. Koart said some examples may be they may not ha~e built in book shelves, or as high a grade carpet, lighting fixtures may be different. It would all be interior amenities, it would not be obvious from the street. One might be 1000 sq. ft. vs. 1300, with the same architectural detail and the same roof treatment. You would not be able to tell from the street. Cm. Johnson asked about transfer of credit from one project to another. The City would have to have some type of assurance that the townhomes would be built within a reasonable period of time so the developer would not walk away after the single family homes were built. Bob Harris stated that allowing builders to have flexibility was important. In-lieu fees are agood way to do it. He stated that 35-40% of the units in Eastern Dublin were at a density of 15 units per acre. If we are going to have affordable housing because our General Plan and Specific Plan say so, he would ask that there be an in-lieu fee and it be kept in keeping with what Livermore and Pleasanton were charging. Mayor Houston asked what were Livermare's and Pleasanton's fees? Mr. Harris stated that for single family detached Livermore was charging $1,843 and in Pleasanton is was $1,954 per unit regardless of the square footage. Pleasanton has a multi-unit fee of $650. Ms. Seifel stated in Pleasanton, everyone pays in-lieu fees unless you have 15% of your project units affordable housing, then you don't have to pay, regardless of square footage. Cm. Johnson stated that would encourage the builder to build bigger homes and just pay the in-lieu fees instead of providing affordable housing. It was cheaper for the builder to just pay the $2,000 fee and not even think of building a cheaper/smaller unit. Mayor Houston stated our General Plan and Specific Plan limit areas by zoning that must conform to medium, low and high density. Bob Harris stated Dublin was in a unique position because we have room to build out and even at 5%, we would be able to create more affordable units than other cities. Mayor Houston proposed that we set the price based on other Tri-Valley cities. Cm. Barnes was leaning towards a price per square foot. The smaller the unit, the smaller the percentage and in-lieu fees. Cm. Zika stated you either meet the 5% requirement or pay the fee. Let's not get into deed restrictions. Ms. Silver stated we are creating an Inclusionary Zoning Ordinance which would be based on how the property is zoned. Ms. Gouig stated fees can be figured on sq. footage, price of house or the way Fremont does it. Ms. Seifel explained how Fremont did it. She outlined how it was figured. Joint Study Session 13 February 6, 1996 [2-6ssmi] . , . ~ ~ Mayor Houston wanted to be competitive with our neighbors. Cm. Zika asked if a developer builds one home to meet moderate, but does not build the very low or low unit, what fee would they pay. Mayor Houston stated then they would not meet 80% of their requirement and they would owe 80% times the number of units . Cm. Zika suggested we impose a premium penalty if they build the moderate or low and not the very low, they pay the whole in-lieu fee. Mayor Houston suggested we take the average of the two competitive cities to use as our in-lieu fees. Cm. Barnes stated that she did not want to compare with the two other cities. We needed to come up with our own fee. Mr. Koart asked if there would be a difference between single family and multiple units. Mayor Houston said they would be the same. Cm. Moffatt stated he tended to lean towards a lower fee for multi family. It would encourage the type of units we need. Cm. Barnes asked how would be guarantee that they build the affordable housing. Cm. Moffatt stated we could require a bond Cm. Barnes stated it would have to be incorporated into the Ordinance. Mayor Houston proposed a in-lieu fee of $1,900 for single family dwellings and asked for wishes for the multi-family fee. Ms. Silver stated Pleasanton does not have a Inclusionary Zoning Ordinance, they impose a fee. Our Housing Element stated that we can provide a fee in-lieu of building. The Housing Ordinance says we will adopt an Inclusionary Housing Ordinance. Somewhere along the line, the goal is that the units be built, either by the builder or by in-lieu fees. Cm. Lockhart stated that developers are already building the moderate units, lets rethink the pie, and say 2 1/2 towards each low and very low in order to generate more money. Cm. Barnes stated we were past the subject of if we were going to have an Inclusionary Housing Ordinance. We are going to have an Inclusionary Housing Ordinance and we should go on from there. Mayor Houston stated with a General Plan Amendment we could change the requirement of having an Inclusionary Zoning Ordinance, however, we were past that. Mayor Houston then proposed in-lieu fees of $1.00 per square foot for single family units, .50 for multi-units with a cap of $2,000. Townhomes, condos and apartments would be considered multi-units. Cm. Johnson stated that would be a way to encourage smaller units for a smaller price.. Ms. Gouig stated with this approach, we are reducing the amount we are going to collect. Cm. Zika stated .75 cents per square foot would be better for multi-units. Cm. Barnes agreed and thought we should up the $2,000 cap. Ms. Silver stated these were based on a housing units not being build. Cm. Burton liked the $.50 per square foot fee for multi-units and $1.00 for single family; he felt it would encourage smaller units. Cm. Moffatt stated he would like to see the square footage be based on the CPI. Mr. Ambrose asked them to keep it simple. It should be something that was is easily administered. Joint Study Session 14 February 6, 1996 [2-6ssmi] . ~ ~ Mayor Houston felt the $1.00 per square foot for single family dwellings would be OK. Ms Seifel stated she would encourage them to raise up the fee for multi-units to .75 per square foot. She felt if the fee were too low, people would opt out all the time. The consensus was $.75 cents a square foot for multi-units. All but Mayor Houston and Cm. Burton agreed to the .75. cent and $1.00 per square foot fee with no cap. Mayor Houston indicated that would set the prices for Inclusionary Housing units. Mayor Houston indicated that there was not a purpose for resale restriction for units that were built, he was not interested in building and then tracking resale. We are looking for houses that cost less to build and that did not have all the same amenities as a regular sale house. Ms. Gouig stated what was more common among development was that the money goes to the owner, not the developer. Mayor Houston stated Livermore lends people the down payment. What would be the benefit for folks to participate? Cm. Barnes stated Livermore was having problems and are holding a lot of houses. Mayor Houston asked if we needed to do resale restriction right now. He felt a lot of discussions had to take place to see what we wanted to do with the money. Ms. Silver stated there were two issues at hand, 1) resale restrictions on the houses built, and 2) once we collect the fees, do we want to impose resale restrictions. The second issue could be decided at a later date, however, the first issue should be addressed tonight. Cm. Barnes wanted to know the consultant's opinion, and what other cities were doing. Ms. Gouig stated other communities imposed resale restriction because they did not want the ABAG figures to constantly change and once the unit was built, we wanted to keep the unit to count towards their ABAG goals. Mr. Koart was normally not in support of deed restrictions. $150,000 was the bottom line on the type of unit K& B could build. He felt that with low and very low units, it didn't matter what type of deed restrictions were placed on them. Mayor Houston asked Mr. Koart the cost of building rental units for a project of 50 units or more. Mr. Koart stated that was not his area of expertise. He stated if they could get the County to donate 5 acres of land, and then get a non and for profit parinership and build 100 units of garden style units and provide a efficient way of getting to meet the goals. Mr. Seifel stated that for an 850 square foot apartment, the construction cost is around $80,000 per unit plus land. For a 1,000 square foot apartment, it will be closer to $93,000 plus land. Mayor Houston asked the consultants to provide examples of resale restrictions. Ms. Silver said all that would be required in the Ordinance was that we will require resale restrictions. She stated the Ordinance should address affordability. Ms. Seifel stated that a goal of maintaining unit affordability for 30 years was typical. Cm. Barnes stated that we should be thinking of how this Housing Ordinance will affect future generations. Mr. Ambrose suggested that the consultants bring some models back to take a look at. Mayor Houston addressed the options - how much time will they allow a developer to build off-site. He asked the consultants for models on what time period would be good to allow. Cm. Barnes stated we should make it hard, we wanted the developer to build the units, and not end up waiting 15 years. Joint Study Session 15 Februaty 6, 1996 [2-6ssmi] . , ` . ~ ~ Mayor Houston addressed the issue of credit for providing more units - what incentive or credit for doing more than your share. Can they apply that credit towards their next project. He asked for models to explore what types of credits were available if they went over the required units. Mr. Koart stated that he liked the idea of having the credits being transferable. Mayor Houston stated he was in favor of fee waivers, priority processing, but not reducing site design standards. Cm. Barnes asked if this could affect safety standards. Ms. Huston stated it would apply to design only, not safety standards. Mr. Ambrose asked the consultants to bring back a sample of options for incentives. Cm. Johnson asked if a land developer came in after a land subdivision was approved, would this apply if he sold the rights to build the houses. Ms. Silver stated that the Ordinance would apply to subdividing the land. Mayor Houston stated that the cost of processing an application just to avoid paying a fee would not be worth it. Cm. Lockhart asked if a rental housing developer could build a complex and meet all the Inclusionary requirements. Ms. Seifel gave a summary of our Rental Availability Ordinance. The Housing Element said a certain amount of units had to be made affordable. The Rental Ordinance requires a certain number of multi-family units must be rented for 5 years. Mr. Koart asked the City Council to amend the Housing Ordinance for the in-lieu fee. Cm. Burton felt a 5 year rental was not a good rental. It was a temporary issue. Mayor Houston stated that the Ordinance was no longer necessary that Dublin has enough Rental Housing, and he suggested the Ordinance be eliminated. Mr. Ambrose suggested we bring information back regarding the Rental Availability Ordinance and they could decide whether to initiate a GP Amendment if they with to eliminate the Ordinance. Ms. Silver stated until a General Plan Amendment was approved, the Rental Housing Ordinance still applies. ADJOURNMENT The meeting was adjourned at 11:00 p.m. Respectfully submitted, ' ! G~~~li''liLs~ Planning Commission ~ irperson ATTEST: ~-L~-17`-~ ' P nning Director Joint Study Session Febmary 6, 1996 [2-6ssmi]