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Home My WebLink AboutItem 4.04 Nielsen Residential Zoning Reg STAFF REPORT CITY CLERK File #430-20 CITY COUNCIL DATE:June 3, 2014 TO: Honorable Mayor and City Councilmembers FROM: Christopher L. Foss, City Manager SUBJECT: Nielsen Residential Project – Request for Consideration of Alternate Method of Compliance with the City’s Inclusionary Zoning Regulations Prepared by Amy Cunningham, Assistant to the City Manager, and Lauren E. Quint, Associate City Attorney EXECUTIVE SUMMARY: William Lyon Homes, Inc., a California corporation (“Developer”), has proposed to pay fees in lieu of constructing five (5) inclusionary units for the Nielsen Residential Project. The proposed fee payment is $109,573 per unit, for a total of $547,865. Staff has determined that the proposed payment of fees is consistent with the purposes of the City’s Inclusionary Zoning Regulations. Therefore, Staff recommends that the City Council approve the proposed fee payment as an alternate method of compliance pursuant to Dublin Municipal Code section 8.68.040.E. FINANCIAL IMPACT: Any in lieu payment will be deposited into the City’s Inclusionary Zoning In-Lieu Fee Fund and used for affordable housing programs. RECOMMENDATION: Resolution Staff recommends that the City Council adopt a Approving an Alternate Method of Compliance with the Inclusionary Zoning Regulations for the Nielsen Residential Project in the Form of Payment of Fees In Lieu of Construction of Affordable Ownership Units. Submitted By Reviewed By Community Development Director Assistant City Manager DESCRIPTION: The Nielsen Residential Project (the “Project”) is a development consisting of thirty-six (36) single-family homes, located on approximately 10 acres of land (APN 985-0002-009-02). The Project is currently owned by William Lyon Homes, Inc. ITEM NO. 4.4 Page 1 of 3 The Inclusionary Zoning Ordinance requires that residential projects with 20 or more for-sale units/lots contain at least 12.5% low- and moderate-income units/lots. The Ordinance further requires that for-sale units be constructed as follows: 60% of the Inclusionary Unit obligation must be constructed on-site and 40% of the Inclusionary Unit obligation may be satisfied through payment of a per-unit in-lieu fee (currently $109,573 per unit). The Nielsen Project requires that five (5) of the thirty-six (36) units be designated as Inclusionary Units. Nielsen Project Inclusionary Zoning Requirements Total Units Inclusionary Inclusionary Requirements Units 36 12.5% 5 The purpose of the Inclusionary Zoning Regulations is to enhance the public welfare, assure that further housing development contributes to the attainment of the City’s housing goals by increasing the production of residential units affordable by households of very-low, low, and moderate-income; and assure that the City’s planning area is utilized in a manner consistent with the City’s housing policies and needs. Section 8.68.040.E of the Dublin Zoning Ordinance allows the City Council, at its discretion, to waive, wholly or partially, the requirements of the Inclusionary Zoning Regulations and approve an alternate method of compliance if a developer demonstrates, and the City Council finds, that such alternate method meets the purposes of the Inclusionary Zoning Chapter. Because of the specific aspects of this Project and the reasons listed below, Staff believes that the City Council can find that Developer’s proposed alternative method of complying with the Inclusionary Zoning Regulations “meets the purposes” of the Regulations. Staff has determined that the proposed alternative method of compliance is satisfactory for the following reasons: 1) The location of the Project is not in close proximity to shopping, transportation, and other amenities that are important factors for the buyers of affordable units. Therefore, the units that would be produced with the in-lieu fees are likely to be more suitable for potential low-and moderate-income buyers than would be affordable units within the Project. 2) It would be very difficult for low-income purchasers to qualify for financing and pay the high costs of owning single-family homes in the Project (including homeowners’ association dues, landscaping and lighting assessments, landscape maintenance on the property, utilities, and long term maintenance). 3) Fees collected in-lieu of the development of affordable units will be well used in assisting with the development of affordable units in Downtown Dublin or in a Priority Development Area. The Developer requests that the City Council approve an alternative method to comply with the requirement to construct the five (5) required inclusionary units. The Developer proposes to pay $109,573 per unit, for a total of $547,865. Payment will be made prior to the recordation of the first Final Tract Map establishing the 36 individual residential lots. The obligation to pay the fees will be set forth as a condition of approval in the subdivision map and in the Site Development Review for the Project. Page 2 of 3 If the attached resolution detailing the alternate method of compliance is approved by the City Council, the outlined terms related to payment of fees in lieu of construction of affordable ownership units will be included in the Site Development Review Conditions of Approval scheduled for the Planning Commission’s June 10, 2014 meeting. NOTICING REQUIREMENTS/PUBLIC OUTREACH: The request for approving an alternative method of compliance with the Inclusionary Zoning Regulation is not subject to a public hearing and therefore a public hearing notice is not required. A copy of this Staff Report has been provided to the Developer and posted on the City’s website. ATTACHMENTS: 1. Resolution Approving an Alternate Method of Compliance with the Inclusionary Zoning Regulations for the Nielsen Residential Project in the Form of Payment of Fees in Lieu of Construction of Affordable Ownership Units Page 3 of 3 RESOLUTION NO. XX - 14 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF DUBLIN * * * * * * * * * * * APPROVING AN ALTERNATE METHOD OF COMPLIANCE WITH THE INCLUSIONARY ZONING REGULATIONS FOR THE NIELSEN RESIDENTIAL PROJECT IN THE FORM OF PAYMENT OF FEES IN LIEU OF CONSTRUCTION OF AFFORDABLE OWNERSHIP UNITS WHEREAS, pursuant to the requirements of the Inclusionary Zoning Regulations of the City of Dublin Zoning Ordinance (the "Ordinance" or “Regulations”), William Lyon Homes, Inc., a California corporation (“Developer"), wishes to pay fees in lieu of constructing certain inclusionary units for the Nielsen Residential Project (“Project”); and WHEREAS, the Project is a 36-single-family home development project; and WHEREAS, Developer has determined that it is infeasible to construct five (5) affordable units, and it has, following discussions with City staff, proposed to satisfy its obligations through payment of fees in lieu of constructing all of the inclusionary units; and WHEREAS, Developer proposes to pay fees in-lieu of constructing the units in the amount of $109,573 per unit, for a total of $547,865, payable prior to the recordation of the first final map establishing the 36 residential lots; and WHEREAS, Section 8.68.040.E of the Dublin Zoning Ordinance allows the City Council, at its discretion, to waive, wholly or partially, the requirements of the Inclusionary Zoning Regulations and approve an alternate method of compliance if the applicant demonstrates, and the City Council finds, that such alternate method meets the purposes of the Inclusionary Zoning Chapter; and WHEREAS, the purpose of the Inclusionary Zoning Regulations is to enhance the public welfare, assure that further housing development contributes to the attainment of the City’s housing goals by increasing the production of residential units affordable by households of very- low, low, and moderate-income, and assure that the limited remaining developable land in the City’s planning area is utilized in a manner consistent with the City’s housing policies and needs; and WHEREAS, the obligation to pay the fees in lieu of construction of inclusionary units will be set forth as a condition of approval in the Site Development Review for the Project; and NOW, THEREFORE, BE IT RESOLVED that the City Council hereby finds that the proposal by Developer to pay fees in lieu of constructing five (5) inclusionary units as an alternate method of complying with the Inclusionary Zoning Regulations, is consistent with the purposes of the Inclusionary Zoning Regulations for the reasons that follow: 1) The location of the Project is not in close proximity to shopping, transportation, and other amenities that are important factors for the buyers of affordable units. Therefore, the units that would be produced with the in lieu fees are likely to be more suitable for 1 potential low- and moderate-income buyers than would be affordable units within the Project. 2) It would be very difficult for low-income purchasers to qualify for financing and pay the high costs of owning single-family homes in the Project (including homeowners’ association dues, landscaping and lighting assessments, landscape maintenance on the property, utilities, and long term maintenance). 3) Fees collected in-lieu of the development of affordable units will be well used in assisting with the development of affordable units in Downtown Dublin or in a Priority Development Area. BE IT FURTHER RESOLVED that the City Council of the City of Dublin does hereby agree to accept payment of fees in-lieu of constructing certain inclusionary units; and BE IT FURTHER RESOLVED that a Condition of Approval shall be included in the Site Development Review for the Nielsen Residential Project implementing the alternative method of compliance with the Inclusionary Zoning Regulations; and BE IT FURTHER RESOLVED that the City Manager is authorized and directed to execute such other documents, and to take such other and further action, as necessary and appropriate to carry out the intent of this Resolution. PASSED, APPROVED AND ADOPTED this __ day of _____ 2014, by the following vote: AYES : NOES : ABSENT : ABSTAIN : _____________________________ Mayor ATTEST : _________________________________ City Clerk 2278049.1 2