HomeMy WebLinkAboutItem 6.2 Amend In-lieuFee AGENDA STATEMENT
CITY COUNCIL MEETING DATE:
CITY CLERK
FILE # 430-80 & 390-20
June 5, 2001
SUBJECT:
PUBLIC HEARING: PA 01-014 Amendment to Resolution No.
57-97 Establishing the Method for Determining the Amount of In-
lieu Fee; and Status of the Affordable Housing Implementation Plan
Report Prepared by Carol R. Cirelli, Senior PlannerS4~ e_~
ATTACHMENTS:
'Amending Resolution No. 57-97 Establishing the Method for
Determining the Amount of In-lieu Fee.
Excerpt from the 10-3-00 Affordable Housing Workshop
Background Report
Resolution No. 57-97 Establishing the Method for
Determining the Amount of In-lieu Fee
RECOMMENDATION: 1.
3.
4.
FINANCIAL STATEMENT: None
Open Public Hearing
Receive Staff Presentation
Hear Public Comment
Close Public Hearing
Adopt the Resolution, Attachment 1, Amending Resolution
No. 57-97 Establishing the Method for Determining the
Amount of In-lieu Fee.
BACKGROUND:
The City currently has an Inclusionary Zoning Ordinance that requires developers that build more than
twenty residential units to set aside 5% of those units for affordable housing. The Inclusionary Ordinance
also allows for an in-lieu fee option whereby the developers can pay a fee in lieu of providing the housing.
In May of 1997, the City Council approved a resolution (Resolution No. 57-97) establishing a method for
determining the amount of in-lieu fee that would be charged to developers that opt to pay a fee in-lieu of
constructing inclusionary units, in compliance with the Inclusionary Zoning Regulations of the City' s
Zoning Ordinance. The adopted fee was $1.00 per habitable square foot for single family (detached unit)
developments and $.75 per habitable square foot for multi-family (attached unit) developments. This in-
lieu fee amount has remained the same since then.
COPIES TO:
g:~housing\inclusionary\pa 0 1-014 cc staff report doubling in-lieu fees
In-House Distribution
ITEM NO.
6. 2
On October 3, 2000, a workshop was held for the Affordable Housing Implementation Plan (AHIP). The
City Council was presented with background information and options regarding: affordable housing
programs; Inclusionary Zoning Regulations changes (e.g. increasing the percentage of affordable housing
required, increasing the in-lieu fees, establishing a commercial linkage fee, etc.); affordable housing
funding (especially usage of the City' s in-lieu fees); and target groups for purposes of formulating the
AHIP.
On February 6, 2001, the City Council was presented with a draft AHIP that consisted of guidelines for
implementing specific housing programs; program funding options; and target group designations. After
some discussion, the City Council adopted the AHIP which includes a funding option of increasing the in-
lieu fees to $2.00 per square foot for single family developments and $1.50 per square foot for multi-
family developments. City Council directed staff to amend Resolution No. 57-97 (see Attachment 3)
establishing the method for determining the amount of in-lieu fees whereby the existing fee ($.75 cents
per square foot for each multi,family unit and $1.00 per square foot for each single family unit) would be
doubled.
ANAYLSIS:
After analyzing the various program options for increasing Dublin's affordable housing supply, the City
Council determined that there was a need to increase the amount of City funds available for funding the
AHIP's affordable housing projects. The Council approved the initiation of a commercial linkage fee
study (fees that would be collected from certain commercial developers for the provision of affordable
housing) and the doubling of the current in-lieu fees.
The attached draft resolution (Attachment 1) establishes the method for determining the amount of in-lieu
fees. This methodology is similar to the method currently used, however, the in-lieu fee amount has been
changed to $2.00 per habitable square foot for single family (detached unit) developments; and $1.50 per
habitable square foot for multi-family (attached unit) developments.
This in-lieu fee amount is still well below what it would cost to actually construct the affordable units
required under the ordinance. According to data collected for the October 3, 2000 affordable housing
workshop, development costs (exclusive of land costs) for constructing a for-sale housing unit would be
$170 per square foot; and development costs (exclusive of land costs) for constructing a multi-family
rental unit would be $180 per square foot (see Attachment 2).
In order to reflect current economic conditions locally and regionally, the methodology includes a
stipulation that the in-lieu fee per habitable square foot shall be adjusted annually on July 1st to reflect the
greater of the percentage change either in a.) the Bay Area Urban Consumer Price Index (CPI) as of March
of each year, or b.) the United States Department of Housing and Urban Development (HUD) Fair Market
Rent Limits for the Oakland Primary Metropolitan Statistical Area (PMSA) that are in effect at the time.
The PMSA includes all Alameda County jurisdictions. The in-lieu fee may also be adjusted as necessary for
changing conditions in the City. This stipulation allows the City to keep pace with inflation and with
housing costs in general.
Pursuant to the Califomia Environmental Quality Act (CEQA), this project is within the scope of the
certified Inclusionary Zoning Ordinance Negative Declaration dated June 11, 1996. The Negative
Declaration covered the parameters of the Inclusionary Zoning Ordinance, including the fee option in lieu
of constructing the housing and annual fee adjustment criteria.
2
STATUS OF AHIP HOUSING PROGRAMS:
At the February 6th meeting, the City Council directed staff to: 1) undertake a nexus study for the
commercial linkage fee; 2) allocate $6,500 of in-lieu fees to fund the rental subsidy portion of Allied
Housing, Inc. 's Tri-Valley Housing Scholarship Program for Fiscal Year 2000-2001; and 3) remm with
specific guidelines and procedures incorporating strategies and funding allocation methods for the
following programs: Acquisition-Rehabilitation, Construction of New Affordable Multi-Family Units,
Down-Payment Assistance and Rental Assistance Programs.
Staff has distributed a consultant Request for Proposal (RFP) for purposes of completing the commercial
linkage fee nexus study. Proposals are due June 8, 2001. Staff will be retuming to the City Council with
a consultant RFP either late June or early July.
Allied Housing, Inc. has not yet requested the $6,500 for rental subsidies for the eligible Dublin student.
Allied has been experiencing some difficulties in trying to find a willing landlord to support this particular
student's economic circumstances. Allied Housing, Inc., in conjunction with Dublin, Livermore and
Pleasanton, have been pursuing extensive outreach efforts with apartment landlords. Landlord focus
groups have been initiated to explore incentives for landlord participation in the Tri-Valley Housing
Scholarship Program and other affordable housing programs, such as Section 8, acquisition-rehabilitation,
etc..
Staff has made contact with the three organizations that offer down-payment assistance programs:
Northbay Ecumenical Homes - Community Assisted Shared Appreciation Home Loan Program (CASA);
East Bay Delta Lease Purchase Program; and the California Housing Loan Insurance Fund (CaHLIF)
Home Loan 97 & 3 Program. Each organization is currently assessing Dublin's housing market to
determine how effective the program would be for individuals and families.
Staff is currently preparing guidelines and procedures for all the programs listed under the AHIP and will
present this information either at the next June 19th City Council meeting, or the July 3'd City Council
meeting. At the June 19th meeting, the City Council will also consider the requests of two organizations
that provide rental assistance: Allied Housing, Inc. has requested $36,000 of in-lieu fees for the Tri-
Valley Housing Scholarship Program (the City did not receive approval of the HOME Investment
Partnership Program grant request that the City submitted on behalf of Allied for the program); and
ECHO Housing has requested $20,000 of in-lieu fees for their Rental Assistance Program. According to
the AHIP, these requests would need to be approved through the adoption of a resolution.
CONCLUSION:
Staff recommends that the City Council: 1) hear staff's presentation; 2) question staff and the public; and
3) adopt the resolution, Attachment 1, amending Resolution No. 57-97 establishing the method for
determining the amount of in-lieu fee.
RESOLUTION NO. - 2001 //( d, .......
A RESOLUTION OF THE CITY COUNCIL
OF THE CITY OF DUBLIN
AMENDING RESOLUTION NO. 57-97 ESTABLISHING THE METHOD FOR DETERMINING
THE AMOUNT OF HOUSING IN-LIEU FEES (PA 01-014)
WHEREAS, on July 9, 1996, the City Council adopted Ordinance 14-96, the Inclusionary Zoning
Ordinance; and
WHEREAS, Section 8.24.080 (B) of the proposed Inclusionary Zoning Ordinance provided the
option of paying a fee in-lieu of constructing Inclusionary Units CIn-Lieu Fee"), and stated that the City
Council shall establish the mount of the In-Lieu Fee by resolution; and
WHEREAS, the City Council on June 11, 1996, adopted Resolution 80-96 establishing a method for
determining the amount of the In-Lieu Fee; and
WHEREAS, the City Council on January 21, 1997, directed Staff to prepare a revised method for
determining the amount of the In-Lieu Fee whereby the fee will be charged only for habitable areas of
residences, specifically excluding garages and that the in-lieu fee be paid for each dwelling unit at the time
the building permit is issued for that dwelling unit; and
WHEREAS, on May 20, 1997, the City Council approved an amendment to the Inclusionary Zoning
Ordinance revising the methodology for determining the amount of the In-Lieu Fee for each residential
development project (City Council Resolution No. 57-97); and
WHEREAS, a Negative Declaration of Environmental Impact was prepared pursuant to the California
Environmental Quality Act (CEQA), State CEQA Guidelines, and the City of Dublin CEQA Guidelines, and
was adopted for the Inclusionary Zoning Ordinance on June 11, 1996; and
WEHREAS, the Negative Declaration adopted on June 11, 1996, addressed all impacts of the
Inclusionary Zoning Ordinance, which includes the in-lieu fee option, and the Inclusionary Zoning
Ordinance amendments of May 20, 1997, addressing the in-lieu fee methodology revisions; and
WHEREAS, on February 6, 2001, the City Council approved the Affordable Housing
Implementation Plan (AHIP) that sets forth policy guidelines and programs for funding and developing
affordable housing in Dublin; and
WHEREAS, the AHIP includes a funding option of doubling the City' s current housing in-lieu fee
amount to $2.00 per square foot for single family detached units, and $1.50 per square foot for multi-family
attached units; and
WHEREAS, at the February 6, 2001 City Council meeting, the City'Council directed staff to amend
Resolution No. 57-97 establishing the methodology for determining the amount of in-lieu fees whereby the
existing fee ($.75 cents per square foot for each multi-family unit and $1.00 per square foot for each single
family unit) would be doubled; and
WHEREAS, Pursuant to the California Environmental Quality Act (CEQA), this project is within the
scope of the certified Inelusionary Zoning Ordinance Negative Declaration dated June 11, 1996. The Negative
Declaration covered the parameters of the Inclusionary Zoning Ordinance, including the fee option in lieu of
constructing the housing and annual fee adjustment criteria.
ATTACHMENT 1
BE IT FURTHER RESOLVED THAT THE Dublin City Council does hereby amend Resolution
No. 57-97 establishing the methodology for determining the amount of the In-Lieu Fee for each residential
development project subject to the requirements of the Inclusionary Zoning Regulations of the Dublin
Zoning Ordinance, as follows:
1. The In-Lieu Fee shall be based upon a charge of $1.50 per habitable square foot for multi-family (attached
unit) developments, and $2.00 per habitable square foot for single family (detached unit) developments.
2. The In-Lieu Fee shall be calculated based on the habitable square feet of each dwelling unit, excluding
garages.
3. There shall be no per-unit maximum for the In-Lieu Fee.
4. The In-Lieu Fee per habitable square foot shall be adjusted annually on July 1st to reflect the greater of the
percentage change either in a.) the Bay Area Urban Consumer Price Index (CPI) as of March of each year, or b.)
the United States Department of Housing and Urban Development (HUD) Fair Market Rent Limits for the
Oakland Primary Metropolitan Statistical Area (PMSA) that are in effect at the time. The In-Lieu Fee may also
be adjusted as necessary for changing conditions in the City°
5. The In-Lieu Fee shall be paid for each dwelling unit at the time the building permit is issued for that
dwelling unit.
The above methodology for determining the amount of the In-Lieu Fee for each development project subject
to the requirements of the Inclusionary Zoning Regulations shall take effect as of July 1,2001.
PASSED, APPROVED AND ADOPTED this 5~ day of June, 2001.
AYES:
NOES:
ABSENT:
ABSTAIN:
ATTEST:
Mayor
City Clerk
g:\pa 01-014 cc reso - doubling in-lieu fees
Table 6: CITY OF DUBLIN SUBSIDY PROTOTYPE FOR-SALE HOUSING
SMALL LOT, SINGLE FAMILY FOR-SALE HOUSING-HOUSING PROTOTYPE
Small lot single family units @10 units/acre - 2 acres
Number of Units
unit square feet
20
3 bed/2 bath
1,200
Development cost @ $170 per square foot (1)
Land Cost @ $1,742,000 / 20 units (2)
$204,000
$87,120
Total Unit Cost
$291,120
Household Size
Maximum price to household at 120% income (3)
Per Unit Gap ($291,120-$282,738= $8,382)
4
$282,738
$8,382
Maximum price to household at 100% income (3)
Per Unit Gap ($291,120-$235,615 = $55,505)
Total Funding Gap
Households at 120% of median income
Households at 100% of median income
$235,615
$55,505
$167,640
$1,110,100
(1) Eden Housing Adams Ave. Fremont project
(2) Estimate- see Background Report'Discussion of land costs.
(3) Based on City of Dublin Ability to Pay--EXHIBIT A, Table 9.
APPENDIX A
Table 8: CITY OF DUBLIN SUBSIDY PROTOTYPE RENTAL HOUSING
MULTIFAMILY RENTAL HOUSING PROTOTYPE
Multifamily 2 story - 52 units @ 20 du/acre+ 30% Density Bonus
Number of Units
Unit square feet
Development cost @ $180 per square foot (1)
Land Cost Per Unit @ $1,742,000 / 52 units (2)
Total Unit Cost
Total Development Costs
Total Costs ($3,679,000 + $4,849,00)
First mortgage supported by .cash flow (3)
Financing Gap
26 26
1 bed/1 bath 2 bed/2 bath
600 850
$108,000 $153,000
$33,500 $33,500
$141,500 $186.500
$3,679,000 $4,849,000
$8,528,000
-$3,793,231
$4,734,769
Per Unit Gap ($4,734,769/52 units)
Assumption
Assume half of all units are affordable to households at 50 % of
Median income, and the remaining half are affordable at 80 % of Median
Income for both one- and two-bedroom units.
Notes
(1) Eden Housing Roberts Avenue Teacher Housing
(2) Estimate- see Background Report, page 14, Housing Unit Costs
and Subsidies Required.
(3) Based on net operating income, given assisted rents.
$91,053
APPENDIX A
Table 8
RESOLUTION NO. 57 - 97
A RE.SOLUtiON> OF TH:E C~TY' 'COUNCIL .
ESTABLISHING METHOD FOR DETERMINING AMOUNT OF IN-LE.U FEE
WHEREAS, the City of Dublin Housing Element, Strategy I.B., and ~e Eastern Dublin-SpeCific
Plan, Programs 4.F. and 4.G,,, require. the Cit)7 of Dublin to prepare an Inclusionary Zoning...Ordinanci7, and
WHEREAS, pursuant to City of Dublin Housing Element Strategy I. B., the City of Dublin prepared
1996, for which proper notice was given in accordance with California State Law; and , .. .. .. .... -.. -.; ..,.
WttEREAS, on July 9, 1996, the City Council adopted Ozdinance 14-96~ the Inelusionar~.,,7..oning
Ordinance; and
~REAS, Secfiqn 8.24.080 (B) of the propose4In~lusionary Zoning. Ordinance provides the
option c~paying':~ fee in-liefi of construdfing Inclusionary U~ts Cin-~ieu Fee"~), and states that the City'
Council shall establish the amoUnt of the In-Lieu Fee by reSoluti6n; and
WHEREAS, the City Council on June 11, 1996, adopted ResOlution 80-96 establishing a method' for
dete~ning the amoun~ 'of the In-Lieu Fee;. and - '
WHEREAS, the City Council on January 2!, 1997, directed Staff to prepare a revised method for
determining the amount~ of the In-Lieu Fee wher. eby ..~.e fee will be charged only for habitable areas of
residences, specifically excluding garages; and
~EAS,: 'a s~ report Was Submitted for PA 97,010, the pr0po~ed mendment: to' the me~od for
dete~g the' :~'0'unt of the IraLieu Fee; and .:,~'
WHE~AS, the Plmg. Commission held a public hearing on said revised method for determining
the amount of the In-Lieu Fee on April 22, 1997, for which proper notice was given in accordance with
California State Law; and
WHEREAS, a Negative DeC.l,aration of Environmental Impa.C~ w~ adopted for the InciUsionary Zoning
Ordinance on June 11, 1996; and
WHEREAS, The Negative Declaration was prepared pursuant to the California Environmental Quality
Act (CEQA), State CEQA Guidelines, and the City ofDublin CEQA Guidelines; and
WHEREAS, The proposed amendments to the Inclusionary Zoning Ordinance address the timing of
payment. of in-lieu fees, the means of their calculation, and the amount offimds realized; and.
WItEREASi These amendments would not have sigxfi'~cant impacts on the environment that were.not
addressed by the adopted Negative 'Declaration; and
WHEREAS, The Negative Declaration adopted on June 11, 1996, addresses all impacts of the
Inclusionary Zoning Ordinance including the proposed amendments thereto; and
WHEREAS, after considering all staff reports, recommendations, and written and oral testimony
submitted at the Public Hearing hereinabove set forth, the Planning CommiSsion adopted a Resolution
recommending City Council adoption of a resolution revising the method for determining the am01t' of the
In-Lieu Fee; and
· .- WHEREAS, the City Council held a public hearing on said Resolution on May 20, 1997, for which
proper notice was given in accordance with California State Law; and
WHEREAS, a staff report was submitted for PA 97-010, recommending the City Council's apprc .:...<.
of the revised methodology for determining mount of In-Lieu Fee; and
WtEREAS, the City Council did hea} and consider all said reports, recommendations and testimony
hereinabove set forth.
NOW, THEREFORE, BE IT RESOLVED TI-I. AT THE Dublin City Council does hereby fred that
the revised method for determining the In-Lieu Fee is consistent with the stated purpose and objectives of the
City's Zoning Ordinance, Municipal Code, General Plan, and Eastern Dublin Specific Plan.
AND, BE IT FURTHER RESOLVED THAT THE Dublin City Council does hereby revise the
' methodology for determining the mount of the In-Lieu Fee for each development project subject to the
requirements of the Inclusionmy Zoning Ordinance, as follows:
1. The h-Lieu Fee shall be based upon a charge of $.75 cents per habitable square foot for multi-family
(attached unit) developments, and $1.00 per habitable square foot for single family (detached unit)
developments.
2. The In-Lieu Fee shall be calculated based on the habitable square feet of each dwelling unit, excluding
garages2
3. There shall be no per-unit maximum for the In-Lieu Fee.
4. The In-Lieu Fee per habitable square foot shall be adjusted periodically to reflect the percentage change in ..
the Consumer Price Index (CPI), and may also be adjusted as necessary for changing conditions in the City.
5. The In-Lieu Fee shall be paid for each dwelling unit at the time the building permit is issued for that
dwelling unit.
The above methodology for determining the mount of the In-Lieu Fee for each development project subject
to the requirements of the Inclusionmy Zoning Ordinance shall take effect as of the date on which the
amended Inclusionary Zoning Ordinance becomes effective.
PASSED, APPROVED AND ADOPTED this 20th day of May,. 1997.
AYES:
Councilmembers Barnes, Burton, Howard, Lockhart and Mayor Houston
NOES: None
ABSENT: None
ATTEST:
Deputy Ci/y Clerk
G:\CC-MTGSX97-QTR2WiAY-97\5-20-97XP, ESO-IZO.DOC