The URL can be used to link to this page

Home My WebLink AboutItem 6.4 ChangeInLieuFeesAGENDA STATEMENT CITY CLERK File # 450-20 & 430-80 CITY COUNCIL MEETING DATE: July 17, 2001 SUBJECT: PUBLIC HEARING Amending Resolution 52-97 Changing the Amounts of In-lieu Fees; Resolution expressing intent to Increase Percentage of Affordable Units and Related Changes to Inclusionary Zoning Ordinance: and discussion of Long Range Inclusionary Zoning Ordinance Changes (Report Prepared by Eddie Peabody, Jr., Community Development Director) ATTACHMENTS: Resolution, (amending Resolution 57-97, attached for Reference), which will change in-lieu housing fees Excerpt from 1990 Housing Element (Pgs. 46 & 47) Resolution approving notification to developers of pending changes to Inclusionary Zoning Regulations RECOMMENDATION: 1. 2. o Resolve whether in-lieu fees should be doubled now (adopt new Resolution) Confirm Council direction to establish priority areas for affordable housing in new developments throughout the City Confirm Council direction to create a mandatory 15% (7.5% construction; 7.5% fee) Inclusionary Zoning Ordinance change. Evaluate any other desired changes to Inclusionary Zoning Ordinance Adopt Resolution - notifying developers of pending changes to inclusionary housing regulations (Resolution Expressing City's Intent to Increase Percentage of Affordable Units and Related Changes to Inclusionary Zoning Ordinance) Authorize a General Plan Amendment Study to determine General Plan changes that may set goals for affordable housing in various geographic areas of the City Instruct staff to schedule a study session in September or October, 2001, with the City Council, regarding specific potential InclUsionary Zoning Ordinance amendments Instruct st, affto complete any General Plan and Zoning Ordinance amendments regarding affordable housing issues as they relate to Inclusionary Zoning and final Ordinance changes by November, 2001 for appropriate public hearings FINANCIAL STATEMENT: None at this time g:agenda/2001/cc 7-17 IllciitSi°nary ZO. doc COPIES TO: In-House Distribution ITEM NO. DESCRIPTION: The City Council at its June 5, 2001, meeting asked staffto return at the July 17 meeting with a discussion of timing for possible changes to the present Inclusionary Zoning regulations related to required percentages of affordable housing, in-lieu fees and constructing affordable units. In addition, staffwas asked to identify priority areas for affordable housing in new developments throughout the City. This report outlines those specific concerns, identifies a possible schedule for review of any Inclusionary Zoning Ordinance changes and how these issues can be resolved. BACKGROUND: The Housing Element of the General Plan, which was adopted in 1990, describes' housing programs for the City. One such program is the adoption of an Inclusionary Zoning Ordinance requiring "a minimum percentage (e.g. 10%)~ of low and moderate income housing in new developments with twenty or more units" (Attachment 1.) The Inclusionary Zoning Ordinance was first considered by the Planning Commission in 1991. It was not adopted at that time and, following several joint meetings of the City Council and Planning Commission, was adopted on July 9, 1996, by Ordinance No. 1'4-96, effective August 9, 1996. On May 20, 1997, the Council adopted Resolution 57-97 establishing the amount of "in lieu" fees per square foot which could be paid by developers not wishing to build affordable units. Thereat~er, on June 3, 1997, the Council amended the Inclusionary Zoning Ordinance to exclude garages for purposes of calculating the "in lieu" fee and to allow payment of the fee on a unit-by-unit basis. Following is a general summary of the Inclusionary Zoning Ordinance's provisions: 3. 4. 5. All new residential projects of 20 or more units must set aside 5% of the units as affordable units for 30 years. (Sections 8.68.050; 8.68.060.) The 5% is broken down as follows; 2% for very low-income households, 2% for low- income households and 1% for moderate-income households. (Section 8.68.050.) The Ordinance applies to both ownership and rental projects. (Section 8.68.050.) Affordability must be ensured by agreements recorded against the property. (Section 8.68.070.) A developer may meet its obligation in ways other than on-site construction of affordable units. (Section 8.68.80.) The options include (a) off-site construction (Section 8.68.080(A)); (b) payment of an "in lieu" fee, which the Council set as SI/square foot for single family and $.75/square foot for multifamily (Section 8.68.080(A), Resolution No. 57- 97); (c) land dedication (Section 8.68.080(C)); (d) other creative ways if approved by the Council (Section 8.68.080(D)); and (e) purchase of credits from another developer who constructed more than its share of affordable units (Section 8.68.090). Incentives can be offered to developers who construct inclusionary units on-site. (Section 8.68.1 I0.) Incentives include (a) deferral of both processing fees and development impact fees if deferral will increase the project's feasibility (8.68.110(C)(1)); (b) design modifications (Section 8.68.110(C)(2)); and (c) priority processing (Section 8.68.110(C)(3)). Affordable units may be smaller and may have fewer amenities (e.g., fireplaces, garbage disposals, dishwashers, cabinet and storage space, and more than one bathroom) than market rate units. (Section 8.68.060(C).) In addition to the Housing Element requirement that the City adopt an Inclusionary Zoning Ordinance, the Eastern Dublin Specific Plan includes a discussion of affordability. (Section 4.4.2, page 27-28, Attachment ~ Because the Housing Element gives 10% as an example of the percentage requirement for affordable housing, the Council was able to adopt the current inclusionary zoning ordinance with a 5% requirement. For the same reason, the Council could' amend the ordinance to require 15%. 2 2.) Policies 4-7, 4-8, 4-9 and 4-10 require developers to provide affordable housing in accordance with the Inclusionary Housing Ordinance. Action programs 4-F, 4-G, 4-H and 4-I requires development of an indusionary housing program that requires a minimum number (unstated) of units to be affordable, suggests an "in-lieu" fee, suggests a monitoring program and suggests developing specific numeric goals for affordable units. New Development and Affordable Housing To establish priority areas in the City for affordable housing, specific General Plan policies would need to address this goal. Within the City's present Housing Element, housing programs have identified the need for affordable housing in the community (Attachment 1). New policies specifically describing where such priority areas should be located would need to be prepared and adopted by the Planning Commission and City Council. Staffwill prepare possible priority areas as they directly relate to new development in the community. At a later date, these proposals will be reviewed by the City Council in the context of specific General Plan changes. Similar changes may need to be made to the Eastern Dublin Specific Plan. Major Tasks and Action Items Recommendation one relates to earlier discussions of possible adoption of an increase to the City's present in-lieu fee requirements to the InclusiOnary Zoning Ordinance. The resolution of this request will serve to provide guidance to staff until the final resolution of future changes to the Inclusionary Zoning Ordinance are complete. The major tasks and action items staff has put together and timetables for completion are as follows: 1. Resolve present ordinance in-lieu fee questions (July 17 City Council) 2. Identify projects in the pipeline that would or may be affected by proposed changes to the Inclusionary Zoning Ordinance (City Attorney - September) 3. Revise General Plan (and, possibly, Eastern Dublin Specific Plan) to allow designation of priority areas for affordable housing (Staff- September) 4. Prepare Inclusionary Zoning Ordinance revisions covering percentages, fees and developer obligations (construction, land dedication, etc.) (Staff-November) · Resolution Expressing City's Intent to Increase Percentage of Affordable Units and Related Changes to Inclusionary Zoning Ordinance The attached resolution (Attachment 3.) would put developers on notice of the Council's intent to amend the Inclusionary Zoning Ordinance. By putting developers on notice, discretionary approvals submitted after the adoption of the resolution will be subject to the amendments, if they are adopted and are in effect when the number of units is determined under the Ordinance (which occurs at approval of tentative maps). Staff recommends adopting the resolution after the dose of the public hearing. The resolution would put developers on notice that the Council intends to amend the Inclusionary Zoning Ordinance to (a) increase the required percentage ofinclusionary units from 5% to 15% and make corresponding changes to the distribution of the units as between moderate, low and very low income households; and (b) eliminate the option of paying "in lieu" fees for more than one-half of the inclusionary units. Adoption of the proposed resolution is akin to the adoption of a resolution placing developers on notice that the Council intends to increase development impact fees or adopt a new impact fee; in fact, the 3 Council adopted such a resolution several years ago to indicate its intent to amend its impact fees to include automatic escalators. It is also similar to adoption of an interim zoning ordinance to place a moratorium on any discretionary approvals while the city is considering amendments to its general plan, specific plan or zoning. Staff recommends that the Council adopt the attached resolution as the first step to modifying the Inclusionary Zoning Ordinance. The attached resolution does not commit the Council to making the changes described in the resolution; the Council is free to make the changes described, any variation of the changes described or no changes. RECOMMENDATION Staff recommends that the City Council receive the Staff` report and, 1) Either adopt or reject Resolution doubling in-lieu fees for the present; 2) Confirm Council direction to establish priority areas for afffordable housing in new developments throughout the City; 3) Confirm Council direction to create a mandatory 15% (7.5% construction; 7.5% fee) Inclusionary Zoning Ordinance change and evaluate existing Inclusionary Zoning Ordinance provisions (described above) to identify additional changes to Ordinance if any; 4) Adopt Resolution - notifying developers of pending changes to inclusionary housing regulations (Attachment 3.); 5) Authorize a General Plan Amendment Study to determine General Plan changes that may set goals for afffordable housing in various geographic areas of the City; 6) Instruct staffto schedule a study session in September or October, 2001, with the City Council, regarding specific potential Inclusionary Zoning Ordinance amendments; and 7) Instruct staff to complete any General Plan and Zoning Ordinance amendments regarding affordable housing issues as they relate to Inclusionary Zoning and final Ordinance changes by November, 2001 for appropriate public hearings RESOLUTION NO. - 2001 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 ("In-Lieu Fee"), and stated that the City Council shall establish the amount 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 WHEREAS, 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 $1.50 per square foot for multi-family attached units; and WHEREAS, at the February 6, 2001 City Council meeting, the City Council directed staffto amend Resolution No. 57-97 establishing the methodology for determining the amount of in-lieu fees whereby the existing fee ($.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 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. ATTACHMENT 1 BE IT FURTHER RESOLVED THAT TItE 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 17, 2001. PASSED, APPROVED AND ADOPTED this 17th day of July, 2001. AYES: NOES: ABSENT: ABSTAIN: ATTEST: City Clerk Mayor g:\pa 01-014 cc reso - doubling in-lieu fees - -' m SOLUTIoN NO. ST- 97 A ~SOLUTION OF THE CITY CO~CIL OF THE CITY OF DUBLIN ESTABLISHING METHOD FOR DETE~IN~G AMO~T OF ~-LIEU FEE W~E~AS, the Ci~ of Dublin Hou~g Element, S~ategy I.B., ~d ~e E~tem Dub~pecific PI~, Pro~s 4.F. ~d 4.G., require ~e Ci~ of Dublin to prep~e ~ Inctusion~ Zo~ng ~rdin~c~ ~d ~~AS, p~su~t to CiW of Dublin Housing Element S~ategy I. B., ~e CiW of DUblin prepped a Dr~ Inctusion~ Zo~ng Ordinate; ~d ~~AS, ~e Pl~ng Co~ission held a public he~g on said ~ Ordinate on May 7, 1996, for w~ch proper notice w~ given in accord~ce M~ C~ifo~a State Law; ~d ~~AS, on July 9, 1996, ~e CiW Co~cil adopted Or~n~ce 14-96, ~e Inclusi°n~ Zomg Ordin~ce; ~d ~~AS, Section 8.24.080 (B) of~e proposed Inclusion~ Zo~ng Ord~ce provides ~e option of paying a fee ~-Iieu of cons~cting Inclusion~ U~ts ("In-Lieu Fee"), ~d states ~at ~e Ci~ Co~cil shall establish ~e mo~t of the In-Lieu Fee by resolution; ~d ~~AS, ~e Ci~ Co~cil on J~e 11, 1996, adopted Resolution 80-96 esmblis~g a me.od for dete~ng ~e mo~t of~e In-Lieu Fee; ~d ~E~AS, ~e CiW Co.oil on J~u~ 21, 1997, directed S~to prep~e a revised me.od for dete~ng ~e mo~t of ~e In-Lieu Fee whereby ~e fee will be ch~ged o~y for habitable ~e~ of residences, specifically excluding g~ages; ~d ~E~AS, a s~ repo~ w~ submi~ed for PA 97-010, ~e proposed men~ent to ~e me. od for dete~g ~e mo~t of ~e In-Lieu Fee; ~d ~E~AS, ~e Plmg Co~ission held a public he~ng on sid revised me.od for dete~g ~e mo~t of ~e In-Lieu Fee on April 22, 1997, for w~ch proper notice w~ given ~ accord~ce wi~ C~ifo~a State Law; ~d ~~AS, a Negative Decimation of Envkomen~ Impact w~ adopted for ~e ~cl~ion~ Zomg Ord~ce on J~e 11, 1996; ~d '~E~AS, ~e Negative Decimation w~ prepped p~s~t to ~e C~ifo~a Envkomen~ Q~i~ Act (CEQA), State CEQA G~del~es, ~d ~e CiW ofDubl~ CEQA G~delines; ~d ~~AS, ~e proposed men~ents to ~e Inclusion~ Zo~g Ore.ce ad&ess ~e ~g of pa~ent of in-lieu fees, ~e me~ of ~ek c~culation, ~d ~e mo~t of ~ds re~d; ~d ~~AS, ~ese men~ents wo~d not ~ve si~fic~t ~paCB on ~e envkoment ~at were not ad~essed by ~e adopted Negative Decimation; ~d ~~AS, ~e Negative Decimation adopted on J~e 11, 1996, ad~esses ~1 ~pacm of~e ~cl~ion~ Zo~g Ord~ce includ~g ~e proposed men~ents ~ereto; ~d ~E~AS, aRer considering all s~ repo~s, reco~endations, ~d ~i~en ~d or~ test~ony submiaed at ~e Public He.rig hereinabove set fo~, ~e Plmg Co~ission adopted a Resolution reco~ending CiW Co~cil adoption of a resolution revising ~e me'od for detem~ng ~e mo~t of ~e In-Lieu Fee; ~d - .--' 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 amount of In-Lieu Fee; and WHEREAS, the City Council did he~ and consider all said reports, recommendations and te~mony hereinabove set forth. NOW, THEREFORE, BE IT RESOLVED TIIAT THE Dublin City Council does hereby find 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 TI:IE Dublin City Council does hereby revise the ' methodology for determining the amount of the In-Lieu Fee for each development project subject to the requirements of the Inclusionary Zoning Ordinance, as follows: 1. The In-Lieu Fee shall be based upon a charge of $.75 cents per habitable square foot for multi-family (attached un/t) developments, and $1.00 per habitable square foot for single family (detached unit) developments. 2. The tn-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-Libu 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 amount of the In-Lieu Fee for each development project subject to the requirements of the Inclusionary 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 CiSy Clerk G :\cc-MTGs~97 -QTR2~V~kY-97X5-20-97%R.ES O-IZO.DOC ?HOUSING PROGRAM DESCRIPTION The following describes a range of housing programs to be implemented by the City of Dublin. Several of~the programs will be accomplished through adoption of new regulations. ~others require additional City action for implementation' still others assume ongoing City efforts based on existing programs. I. STRATEGIES REQUIRING ADOPTION OF NEW REGULATIONS · · bonuses in excess of ...... ~n~nce allowing density _ ~n~ ~nus for 20% of the units set asmu= le islature recently adopted AB households). T~e ~at~___~, bonus law (Government code 1863 which amends_~ ~... renuires cities to Section 65915)._ Tne.~ ~==~ercent, and an d~nsitv bonus ot at !e? ..... ~..=~ont incentive(s), to a incentive, or Ltn=~ developer of a housing development agreeing to construct at least 1) 20% o-f the units for lower-income households; or 2) 10% of the units for very low-income households; or 3) 50% of' the units for senior citizens. Policy objective: Provide incentives for affordable units Quantified Objective: 100 units affordable'to moderate 'income households Actions to be Undertaken: Financing: Adopt ordinance; inform developers of density bonuses; and require developers who are granted a density' bonus to enter into an Affordable Housing Agreement'with the City to ensure the continued a~fordability of the units Minor administrative cost to City (A) Be implementation Responsibility: Planning Department, Planning commission and City council Time Frame: 1991 ''(adopt ordinance) Adopt an inclusionary zoning ordinance requiring a minimum percentage (e.g., 10%) of low and moderate income housing in new developments with 20 or more units, such a'n ordinance could include: _ income-eligibility criteria for defining affordability; - pricing C~iteria for affordable units; restrictions on resale and re-rental of affordable units; provisions for in-lieu'fees; · other provisions regarding on-site or off-site · construction requirements and transfer of excess affordable housing credits; time limit within which, any in-lieu fees must be spent; and incentives, such as fee waivers, priority processing and reduced site design standards. Any in lieu fees collected under the program will go into an exclusive fund to be speQt directly on creating new affordable housing opportunities in Dublin (i.e., fees could be paid to the City 'in lieu of the direct provision of affordable units). Such in-lieu fees usually are required to be spent within a limited time frame (e.'g., three years) and could be used for landbank, rent writedowns, etc. pOlicy Objective: Require the development of lower income housing Quantified Objective:. 190 units (affordable.to low and very low income households) Actions to be Undertaken: Financing: Adopt an inclusionary ordinance Minor administrative cost (A) Implementation Responsibility: Time frame Planning Department, Planning Commission and City Council 1991 (adopt ordinance) C. Review development Standards' to determine whether changes should be made to reduce development costs. The Joint Venture for Affordable Housing (JVAH) provides technical assistance to local governments interested in modifying development standards to encourage the construction of affordable housing. Site planning and building innovations can cut the costs of housing construction.. Changes in site design which result in higher densities or reduced parking requirements can significantly reduce. construction costs. Caution must be taken to avoid increasing .liability. Policy Objective: Modify development standards to encourage the construction of . affordable housing 47 RESOLUTION NO. - 2001 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF DUBLIN EXPRESSING TItE CITY'S INTENT TO INCREASE PERCENTAGE OF AFFORDABLE UNITS AND RELATED CHANGES TO INCLUSIONARY ZONING ORDINANCE RECITALS WHEREAS, the City's Inclusionary Zoning Ordinance (Chapter 8.68 of the Dublin Municipal Code) requires developers of residential development projects in excess of 20 residential units to set aside 5% of the units for housing for moderate-income, low-income, and very low-income households ("Affordable Housing Set-Aside"); WHEREAS, the inclusionary zoning ordinance permits developers to pay fees in lieu of complying with the Affordable Housing Set-Aside; and WHEREAS, the Council has expressed its intent: to increase the City' s Affordable Housing Set-Aside, to 15%; and to prohibit In-Lieu Fees from being used for a portion of the Affordable Housing Set-Aside, which would nOt exceed one-half Of the Affordable Housing Set- Aside; and WHEREAS, the City intends that the subsequently adopted revisions to the Inclusionary Zoning Ordinance be applicable to applications between the date of the adoption of this resolution and the effective date of the revisions. NOW, THEREFORE, be it resolved that the City intends to amend the Inclusionary Zoning Ordinance: a) to increase the amount of the Affordable Housing Set-Aside to an amount that would not exceed 15%, with corresponding amendments to the percentages of moderate, low and very low income units; and b) to prohibit In-Lieu Fees from being used for more than one half of the Inclusionary units. Attachment 3 PASSED, APPROVED AND ADOPTED this 17th day of July, 2001. AYES: NOES: ABSENT: ABSTAIN: ATTEST: City Clerk G:agendas/2001/cc 7-17 reso fee incr Mayor