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Home My WebLink About7.1 InclZonOrdAmend CITY CLERK File # 450-20 AGENDA STATEMENT CITY COUNCIL MEETING DATE: October 16, 2001 SUBJECT: Proposed Inclusionary Zoning Ordinance Amendments (Report Prepared by Eddie Peabody, dr., Community Development Director) ATTACHMENTS: City Council Agenda Statement for July 17, 2001 Minutes of City Council Meeting for July 17, 2001 (por) List of Inclusionary Ordinance Work Group Members RECOMMENDATION: 1. 3. Hear Staff Presentation Question Staff Provide Staff direction regarding proposed Inclusionary zoning Ordinance changes FINANCIAL STATEMENT: None at this time BACKGROUND: 'On July 17, 2001, the City Council approved several actions related to future Inclusionary Zoning Ordinance regulations: · To establish priority areas for affordable housing in new developments in the City. · To have Staff conduct a General Plan Amendment study to determine any General Plan changes regarding goals for affordable housing in various geographic areas of the City. · To return to the City Council with specific potential Inclusionary Zoning Ordinance changes. · To have Staff complete any General Plan or Zoning Ordinance amendments for appropriate public hearings. In addition, the City Council passed a Resolution expressing the City's intent to increase the percentage of affordable units and related changes to the Inclusionary Ordinance. In particular, this resolution established the following language: · To establish a City wide affordable houSing goals in the amount of 15% of new housing units. · To prohibit in-lieu fees from being used for more than one half of the Inclusionary units. · Amended the current Inclusionary Zoning Ordinance to increase the in-lieu fees to $2.00 square foot for single family residential units and $1.50 per square foot for multi-family residential units. g:/Housing/Inclusionary/cc 10-16 COPIES TO: In-House Distribution ITEM NO. Current Affordable Housing Policy: In summary, the current affordable housing policy as approved by Ordinance and in the Resolution of Intention inCludes: 50% of the units built in projects over 20 units must be affordable to moderate, Iow and very low households · Inclusionary units can be smaller and have fewer amenities · Inclusionary units remain affordable for 30 years · All projects over 20 units shall enter into an Affordable Housing Agreement on the methods and items of compliance with the Ordinance · Alternatives to constructing Inclusionary units on site include off-site construction, land dedications and/or payment of in-lieu fees · As incentives,' the City Manager and City Council could approve deferred payment of City processing fees as incentives for construction of Inclusionary units · Design modifications (parking, setbacks, etc.) can be approved by the City Council to Inclusionary projects · As of July 17, 2001, current in-lieu fees were increased to $2.00 per square foot per single family units and $1.50 per square foot for multi-family residential units Units Remaining to be Developed to Build-Out: Staff estimates that there are 11,700 units remaining to be built within the existing City limits and within the Sphere of Influence. Based on City Council's direction, the City Attorney and Staff are working on General Plan changes to define specific areas for affordable housing in the community as well as the specific projects within the City that would be subject to new Affordable Housing Ordinance changes if adopted by the City Council. These changes will be brought before the City Council with the proposed revisions to the Inclusionary Zoning Ordinance. Special Concerns Identified By Working Group on Housing Policy: As a result of public testimony at the July 17, 2001 City Council meeting, Staff held three meetings (Aug. 31st, Sept.'Th, and Sept. 19th) and met with a group of developers and housing advocates (Attachment 3) to work on possible changes to the Inclusionary Ordinance. While there was no consensus on specific items, the Work Group was helpful in identifying specific concerns on the various options of a new Inciusionary Ordinance. These concerns were as follows: Fair resolution of required in-lieu fees How to describe areas within the Community where the City Council would like to have affordable housing located What City participation is appropriate financially in the processing of affordable housing The need to understand that building affordable units will drive up the cost of the remaining market units and a clear understanding of what the costs to construct units really are To clearly review information from the development community as to what costs they believe are necessary to build affordable housing and the true costs to produce those units including the loss of profit 2 External Issues (ABA G): Every five years ABAG prepares the Regional Housing Needs for all Bay Area jurisdictions. The City of Dublin will need to produce 5,436 above moderate, moderate, low and very low-income units from 2001 - 2006. At the present time there is no penalty to jurisdictions that fail to meet their regional housing needs. However, it is possible that legislation will be proposed that will carry punitive action against those jurisdictions that fail to meet their "needs". The regional housing, needs require a breakdown of the following percentage of units 50% units are above moderate. Of the remaining 50% of the units, 50% are moderate, 20% low, and 30% very low. Dublin's present Ordinance requires of the five percent affordable units the make up shall be 20% moderate, 40% low and 40% very Iow. It should be noted that since the Regional Housing Needs were allocated in January, 1999, the City has completed 2,181 units, none of which were built in the moderate, low or very low categories required by ABAG. Additionally, based on the projects that are currently approved with City of Dublin, another 2,230 units will likely be built in the above-average category (not satisfying any of the ABAG categories). Staff has projected that there are an estimated 3,200 units that remain to be entitled in the next five years (in the City or within the Sphere). In order to meet ABAG's targets, 288 moderate, 106 low and 159 very iow units would have to be built every year. As shown in the Table below, based on the number of units projected to be built (without entitlements), the City will not meet its ABAG targets. Table 1 Comparison of Potential Production with Regional Housing Needs City Limits Only Time Frame TOTAL UNITS DUBLIN ABAG REGIONAL NEEDS January 1, 1999 - June 30, 2006 Jan. 1, 1999-Aug 2001 2,181 (entitled) 4,741' Sept. 2001 - June 2006 2,230 (estimate - not entitled) TOTAL 4,411 *In addition, 675 units have also been assigned to City of Dublin Sphere of Influence. As noted in Table 1, above, there are an estimated 2,230 units that may be subject to new affordable housing requirements in the City (portions of Dublin Ranch Areas B-E, F&G, Greenbrier Phase III, the Transit Center, DiManto and W. BART Station project). The Table below examines the number of units that would be built from September, 2001 - June 2006, based on either a build requirement of 15 percent or 7.5 percent in concert with the City's current Resolution of Intention in July, 2001. It should be noted that neither of these alternatives will have the result of satisfying ABAG's Regional Housing Needs. TABLE 2 Anticipated Dublin Housing ProjeCtions and ABA G Regional Needs .CITY OF DUBLIN TOTAL AFFORDABLE UNITS BASED ON DUBLIN ABAG DUBLIN ABAG ONLY UNITS POTENTIAL REQUIRED AFFORDABLE TOTAL UNITS IN RESIDENTIAL UNITS AFFORDABLE UNITS NEEDS SPHERE BUILT (estimate) (Includes Moderate, Low, Very Low) Moderate, low, very Jan. 1, 1999 - June low 30, 2006 Jan. 1, 1999 -June 30, 2006 Within City Limits 15% 7.5 % Requirement Requirement * Sept. 1, 2001- June 2,230* 334 167 2,768 695 30, 2006 * Potentially subject to new Affordable Housing Requirements. Discussion: There are four categories of revisions to the Ordinance that Staff suggests the City Council address in this discussion: 1. Percentage of required moderate, low and very low units 2. Fee Waivers 3. Alternatives to building units 4. How In-Lieu Fee Requirements are calculated Percentage of moderate, low and very Iow The current Ordinance has a requirement of 20% moderate, 40% low and 30% very low. The present ABAG percentages which are used by the regional agency to assign fair share affordable housing allocations to cities is 50% moderate, 20% low and 30% very low. This reflects the entire Bay Area housing need assessments for various categories of housing needs and staff's question is: Should the new Ordinance keep our present percentages or utilize ABAG's numbers? 2. Fee Waivers for Affordable Housing: The direction by the City Council on July 16, 2001, was that of the 15 percent affordable units required, at least 7.5% would have to be. built. It is unclear from the City Council's direction if there is a penalty in the form of a fee if all 15 percent of the units are not constructed. Staff poses the following question: ao If the developer constructs 7.5 percent of the units and proposes to pay fees on the remaining units, is the fee calculated on all the units including the 7.5 percent that were constructed as affordable? This would be an additional incentive for the developer to construct all 15 percent of the units. 3. Alternatives to Building Units: In certain cases, the construction of affordable units within a project may be not possible or feasible given the nature of the units. Situations where this may exist are in topographically challenged areas, areas with large lot requirements, or a developer-proposed high-end projects. 4 The current Ordinance provides mechanisms for the developer in these instances. Staff is recommending that these mechanisms be tightened up to encourage the construction of units, rather than the payment of fees. Additionally, where units could not be built, Staff recommends that the City Council have the ability to approve one of the alternatives listed below. The following Table lists alternatives that will continue to provide some flexibility in the Ordinance while still encouraging the implementation of affordable units. Alternative Description of Alternative Staff's Analysis Number Positives Negatives Dedication of Alternative Site Offers option to use In-lieu fees even at 1 Dedication of land in the developer's other property owned 15%, may not produce ownership suitable for affordable units at by developer for enough revenue to a cost equal to the Cost of constructing construction of units acquire very much affordable units (Includes both the 7.5% by the developer property. One acre at. in-lieu fee requirements). The land market price may be would be in a site that would be more in excess of $1-2 suitable for affordable units, million Land Bank One or more Again in-lieu fees at 2 Acquire land with other developers in developers could 15% may nor produce other City Council designated priority create a land bank that much property affordable housing areas at a cost equal to might provide suitable the cost of constructing affordable units area for a larger (includes both the 7.5% mandatory and affordable project 7.5% in-lieu fee requirements). Pay Fees Could be used by the Does not immediately 3 Directly pay 15% in-lieu fees based on City to assist in land produce housing on mandatory and in-lieu fee requirements to acquisition, the ground the City where Options 1, 2, and 3 are not Construction costs, or possible, infrastructure for a variety of projects in the Community 4. Calculation of In-Lieu Fees: The current Ordinance has a fee requirement of $2.00 per .square foot for single family and $1.50 per square foot for multi-family projects. Staff has examined various options for increasing the fee. The methods for charging in lieu fees vary from jurisdiction to jurisdiction. Staff is in the process of determining moderate and affordable housing costs so that information can be presented accurately about the difference between affordable and market construction costs. Staff will return at a later date with specific information to discuss this issue. 5 Conclusion Staff will return with additional analysis relating to market and affordable housing costs prior to preparing the new Inclusionary Zoning Ordinance Amendment. After completion of the discussion, Staffwill utilize Council direction on the other items in this Agenda Statement to help create the new amendments. RECOMMENDATION: Staff recommends that the City Council receive the staff report, question Staff and/or the public and give direction regarding Inclusionary Zoning Ordinance changes. 6 · CITY CLERK File #J , JJ c) l AGENDA STATEMENT -~<D ? CITY COUNCIL MEETING DATE: July 17, 2001 SUBJECT: ATTAC]~CIENTS: RECOMMENDATION: FINANC~L STATEMENT: 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 zomg Ordinance Changes (Report Prepcwed by Eddie _Peabody, Jr., Community Development Director) Resolution, (amending Resolution 57-97, attached for Reference), which will change in-lieu housing fees Excerpt fi.om 1990 Housing Element (Pgs. 46 & 47) Resolution approving notification to developers of pending changes to Inclusionary Zoning Regulations o- 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 staffto schedule a study session in September or October, 2001, with the City Council, regarding specific potential Inclusionary Zoning Ordinance amendments 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 No~vember, 2001 for appropriate public hearings None at this time g:agenda/2001/cc 7-17 ]fftclii~i0ua~;y ZO. doc ATTACHMENT DESCRIPTION: The City C°uncil at its June 5, 2001, meeting asked staffto return at the July~ [7, .~..~ ~ 33-' meeting with a discussion of timing for possible changes to the present Inctusionary Zoning regulations related to required percentages of affordable housing, in-lieu fees and constructing affordable units. In addition, staff was 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 Iow 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. 14-96, 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. Thereafter, 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: 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 8.68.110.) Incentives include (a) deferral of both processing fees and development impact fees if deferral wilt 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 Inctusionary Zoning Ordinance, the Eastern Dublin Specific Plan includes a discussion of affordability. (Section 4.4.2, page 27-28, Attachment 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 In~lusionary Housing Ordinance. Action programs 4,F, 4,G, 4-H md 4-I requires development of an i~clusionary hoUsing program that requires a.minimum number (unstated) ofunits'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 staffhas 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 Cky'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 tnclusionary 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 close 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, 10w and very low income households; and (b) eliminate the option of paying "in lieu" fees for more than one-half of the inclusionary units. notice that the Council intends to increase development impact fees or adopt a new impact fee; in fact, the 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 pl.mh 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 changps described or no changes. RECOMMENDATION Staff recommends that the City Council receive the Staff report and, 1) Either adopt or reject Kesolution doubling in-lieu fees for the present; 2) Confirm Council direction to establish priority areas for affordable 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 Inctusionary Zoning Ordinance provisions (described above) to identify additional changes to Ordinance if any; 4) Adopt Kesolution - 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 affordable 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 RESOCVTIO - ZOO1 $ A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF DUBLIN AMENDING RESOLUTION NO. 57-97 ESTABLISHING TIlE METHOD FOR DETERMINING TItE AMOUNT OF IlOUSING 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) oft he proposed Inclusional~d 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 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 211 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 WltEREAs, 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 Enviromnental 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 1 i, 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 tnclusionary Zoning Ordinance amen~nents 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 Inclusionary Zo~.ng 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 a..d_justment criteria.. ' ATTACHMENT 1 BE IT FURTI:IER RESOLVED THAT TI-IE 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 1~t to reflect the greater of the percentage change either in a0 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 mxit at the thne the building permit is issued for that dwelling mt. 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 17* day of July, 2001. AYES: NOES: ABSENT: ABSTAIN: ATTEST: Mayor City Clerk 2 .... ,~ · .... RESOLIJTldN NO. 57 - 97 A ~SOLUTION'OF T~ CI~ CO~CIL OF T~ ~ OF D~L~ ESTABLISHING ~THOD FOR DE~~~G ~O~T OF ~-LIEU FEE WHE~AS, the Ci~ of Dublin Ho~mg Element, Smme~ I.B., md ~e E~tem DubHn~p~cific Pi~, Pro.ms 4,F. ~d 4.G., requke ~e Ci~ of Dublin to prep~e ~ Inct~ion~ Zoffing Ordin~c~ ~~AS, p~sumt.to Ci~ of Dubt~ Housing Element S~ate~ I. B., ~e Ci~ of Dub~ prepped a Dr~ hclusion~ Zo~g Ord~ce; ~d ~~AS, ~e Plmg Co~ssion held a Public he~g on s~d &~ Ord~mce on MaY 7, 1996, for'w~ch proper notice w~ given ~ aecord~ce M~ C~ifo~a State Law; ~d ~~AS, on J~y 9, 1996, ~e Ci~ Co~cil adopted Ordinate 14-96, ~e tnctusion~ Zomg Oral.ce; ~d ~~AS, Section 8.24.080 (B) of ~e proposed ~cl~ion~ Zo~ng Ordin~ee provides ~e option ofpay~g a'fee ~-tieu of cons~cting Inctusion~ U~ts ("in-Lieu Fee"), ~d states Comcil shM1 esmblish ~e mo~t of~e In-Lieu Fee by resolution; ~d ~~AS, ~e Ci~ Co.oil on J~e 11, 1996, adopted Resolution 80-96 esmbtis~g a me. od for dete~hg ~e mo~t of~e tn-Lieu Fee; ~d ~~AS, ~e Ci~ Comcil on J~u~ 21, 1997, directed S~to prep~e a revised me. od for dete~g ~e mo~t of ~e tn-Lieu Fee whereby ~e fee will be ch~ged o~y for habimble ~e~ of residences, speCffic~ty exclud~g gmges; md - -' ~~AS, a s~repoX w~ subdued for PA 97-010, ~e proposed men~ent to ~e me. od for dete~ining ~e mo~t of~e tn-Lieu Fee; ~d ~~AS, ~e Planing Co~ission held a public he~g on shd revised me. od for dete~g ~e mo~t of~e tn-Lieu Fee on Ap~l 22, 1997, for w~ch proper notice w~ given.~ accord~ce C~ifo~a State Law; ~d ~~AS, a Negative Decl~tion ofEnvko~en~ ~pact w~ Mopted for ~e ~cl~ion~ Zo~g Ore.ce on J~e 11, 1996; ~d '~~AS, ~e Negmfve Decimation w~ prepped p~t to ~e C~fo~a En~o~en~ Q~iw Act (CEQA), State CEQA ~det~es, ~d ~e CiW of ~b~ CEQA G~delines; ~d ~~AS, ~e proposed men~ents to ~e ~cl~ion~ Zo~g Ord~ce ad.ess ~e ~g of p~ent, of ~-Seu fees, ~e me~ of ~ek c~culafion, ~d ~e mo~t of ~ re~d; ~~AS, ~ase men~ents wo~d not ~ve s~cmt ~pacB on ~e envkoment ~at were not ad~essed by ~e adopted NegatiVe Decimation; ~d ~~AS, ~e Negative Decimation adopted on J~e t 1, 1996, ad~esses ~1 ~pacts of~e ~cl~ion~ Zo~g Ore.ce ~clu~g ~e proposed men~en~ ~ereto; ~d " sub~aed at ~e Pubt~c He~mg heremabove set fo~ ~e Piing uo~sslon aaoptea reco~en~ng Ci~ Co~cil adoption of a resolution revising ~e me'od for dete~i~ng ~e ~o~t of ~&e ~-Lieu Fee; ~d .- v~rI-IEttEAS, the City Council held ~ public hearing on said Resolution on May 20, t 997~, for which proper notice was given in accordance with California State Law; and Wl:IEREAS, a sfaffreport was submitted for PA 97-0.10, recommending the City Council"s apprc.> ~" of the revised methodology for determining mount of In-Lieu Fee; and ,~.. ~REAS, the City Council did he~ and consider ali said reports, recommendations and tes-thmony hereinabove set forth. NOW, Tt{EREFORE, BE IT RESOLVED TtiAT TI:tiE 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 Cily's Zoning Ordinance, Municipal Code, Genera/Plan, and EaStern Dublin Specific Plan. AND, BE-IF FURTFIER RESOLVED TI{AT TFIE Dublin City Council does hereby revise the - methodology for determining the amount of the In-Lieu Fee for each development project subject to the: requiremems oft he Inctusionary Zoning Ordinance, as follows: '1. The In-Lieu Fee shall be based upon a charge-of $.75 cents per habitable square foot formutfi-family (attached un/t) 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 gamgesl 3. There shall be no per-unit maximum for the in-Lieu Fee. 4. The tn-Li&u 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 changfing conditions in the Cis~. 5. The In-Lieu Fee sh~ll be paid for each dwelling unit at the time the building permit is issued for that dwelling un/t. The above methodology for determining the amount of the In-Lieu Fee for each development project subjec: to the requirements of the tnctusionary Zoning Ordinance shall take effect as of the date on which the amended Inctusionary Zoning Ordinance becomes effective. PASSED, APPRO.VED AND ADOPTED this 20th day of May, 1997. AYES: Councilmembers Barnes, Bf~rton, Howard, Lockhart and Mayor f-fousmn NOES: Atone ABSENT: 2Vone Mayor ATTEST: Deputy City Clerk ' .. · - G :\CC-MTGSY97 -QTR2%XCAY-97~5 -20-97h~ES O-IZO.DOC T,~e following describes a range of hOusing programs to be impteme~te~ by the City of Dublin. Several of~the programs wil~ be accomplished through adoption of new regulations. .others require additional City action for implementation.' still .others assume ongoing'City efforts' based on existing programs. STRATEGIES REQUIRING ADOPTION OF NEW REGULATIONS A.. Adopt an ordinance allowing density bonuses in excess of those called for by state t~w (e.g., a.30% bonus for 20% of the units set aside for lower-income/senior citizen households), The State legislature recently adopted AB 1863 which amends ~he densitybonus law (Government code Section 65915). The bill'requires cities to grant a density bonus of. at least 25 percent, and an additional incentive, or financially equivalent incentive(s)~, to a 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 v~ry low-income households; or 3) 50% of' the unitS for senior citizens. Policy Objective: Provide incentives for affordable units " to moderate Quantified Objective: i00 units affordable' 'income households Actions to be undertaken: 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 affordability of the units t' Minor administrative cost to City (A) Financing: implementation · Responsibility: Planning Department, Planning commission and Cit~ councf! 1991 '(adopt ordinance) Time Frame: B. Adopt an inclusionary zoning ordinance requiring a minimum percentage (e.g., 10%) of low and moderate ~ncome housing in new developments with 20 or more units, such an ordinance could include: _ income~eligibitity criteria for defining affordability~ - pricing gyiteria for affordable units; Ce 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, priorLty processing and reduced site design standards. Any in lieu fees collected u~der 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~usualty 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 restrictions on resale and re-rental of affordable ...' 190 units (affordable.to low and very low income households) Quantified Objective: Adopt an inctusionary ordinance A'ctions to be' Undertaken: Minor administrative cost (A) Financing: Planning Department, Planning Commission and city Council Implementation Responsibility: .1991 (adopt ordinance) Time frame: ~'' 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. Sit~ planning and building innovations cae cut the costs of housing construction.. Changes in site design which result in kigher densities or reduced parking requirements can signifigantly reduce. construction costs. Caution must be taken to avoid increasing !lability. · Policy Objective: Modify development standards to encourage the construction.of . affordable housing RESOLUTION NO. - 2001 A RESOLUTION OF TIlE CITY COUNCIL OF TIlE CITY OF DUBLIN EXPRESSING ~ CITY'S INTENT TO INCREASE PERCENTAGE OF AFFORDABLE UNITS AND RELATED 'CltANGES TO INCLUSIONARY ZONING ORDINANCE RECITALS WltrEREAS, the Cky'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 WIt_EREAS, the Council has expressed its intent: A. to increase the City's Affordable Housing Set-Aside, roi 5%; and B. 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 beapplicable t° applications between the date of the adoption of this resolution and the effective date of the revisions. NOW, TItEREFORE, 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 riot 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 PASSED, APPKOVED AND ADOPTED this 17th day of~luly, 200t. AYES: ' NOES: ABSENT: ABSTAIN: ATTEST: Mayor City Clerk G:agendas/2001/cc 7-17 reso fee incr 2 This Agreement will vest the project approvals recently granted by the City Council and provide for additional DA's at the time of the development of the individual parcels within the project area. No testimony was entered by any member of the public relative to this issue. Mayor Houston closed the public hearing. On motion of Cm. McCormick, seconded by Vice Mayor Lockhart, and by unanimous vote, the Council waived the reading and adopted ORDINANCE NO. 6- 0t APPROVING THE SUPPLEMENTAL DEVELOPMENT AGREEMENT FOR PA 0'1-004 TOLL BROTHERS (TOLL CA II, LP) FOR NEIGHBORHOODS A-6 & A-7 OF DUBLIN RANCH AREA A Mayor Houston announced that Item 8.1 would be considered next on the agenda. PUBLIC HEARING AMENDING RESOLUTION 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 8:55 p.m. 6.4 (450-20/450-80) Mayor Houston opened the punic hearing. Community Development Director Eddie Peabody presented the Staff Report and advised that in June, the City Council asked Staff to return at this 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, Staff was asked to identify priority areas for affordable housing in new developments throughout the City. Mr. Peabody advised that this report proposes adoption of a resolution doubling the amount of the Inclusionary Zoning In-Lieu Fee, adoption of a resolution expressing the Council's intent to increase the percentage of required affordable units and related changes to the IZO, identifies a possible schedule for review of any IZO changes and how these issues can be resolved. CITY COUNCIL MINUTES VOLUME 20 REGULAR MEETING July 17, 2001 PAGE 305 ATTACHMENT Mr. Peabody gave a general summary of the provisions of the City's IZO. Mr. Peabody stated Staff recommended that the City Council: 1) Resolve whether in-lieu fees should be doubled for the present and if so, adopt Resolution; 2) confirm Council direction to establish priority areas for affordable housing in new developments throughout the City; 3) confirm Council direction to create a mandatory 15% (7.5% construction & 7.5% fee) IZO change and evaluate any other desired changes to the IZO; 4) adopt Resolution notifying developers of pending changes to inclusionary housing regulations; 5) authorize a General Plan Amendment Study to determine GP changes that may set goals for affordable housing in various geographic areas of the City; 6) instruct Staff to schedule a study session in September or October~ 2001, regarding specific potential IZO amendments; and 7) instruct Staff to complete any GP 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. Don Babbitt, Regio Court, stated at the last meeting, he passed out his business cards, but none of the City Council took the time to give him a call. We need to get out of the box and start creating some study sessions and bring in all the people and look at how we address this issue. He discussed what has happened to prices in the last 25 years. He asked if the City has done any AB 1600 nexus to increase these fees. He expressed surprise that we are not enacting fees on commercial development tonight. He encouraged the City Council to put this ordinance off and get the non-profits involved. We should be able to leverage our $5 million with bonds. Get the rest of the community and the builders involved. Cm. Oravetz talked about our entire valley that is overpriced. As a builder if he came to us and the City said we have a goal of 15% for affordable units, is he willing to deal with us and have give and take between the two of uS? Mr. Babbitt stated yes, this is why we need to get everyone in a room to talk about this. Cm. Zika stated the City Council has authorized and under state law, we have approved a commercial fee study. This will be about $1 per foot. We authorized in the budget $1 million from the General Fund into the housing fund. . Kevin Peters with Shea Homes stated the affordable housing crisis is a real problem and it should not be entirely put on the backs of people who don't live in the community yet. Builders do need to be part of the solution. Any solution needs to be equitable and flexible and the problem he has with the resolution deals with passing through costs to only new homes. He referenced a study done in another community that was looking at CITY COUNCIL MINUTI18 VOLUME g0 REGULAR MEETING July 17, 2001 PAGE 306 increasing their fee to 15%. This added $30,000 to each home. This could potentially make the problem worse. There needs to be more dialogue and more refinement on how a receiver zone works. We could reexamine formation of a redevelopment district of underutilized business properties. We could ask the state legislature through variOUs forms of tax reform to produce affordable housing. He encouraged the City Council to adopt a broader resolution than what's before them tonight. Mayor Houston asked about the project on Dougherty Road and the tax credit program and requested that he describe how this worked. He asked if it can be copied. Mr. Peters resPOnded that this was a 4% tax bond and they have to compete for these through the State of CA. This is a good tool, and a good example of ways to deal with affordable housing. Cm. Oravetz asked him about the 15% figure. Mr. Peters stated he felt 15% is an admirable goal and this is broader than what's in the resolution. Cm. Zika stated right now we have a goal of 5% and it has encouraged nobody to do anything. We've got money, but no units. What can we do to encourage the actual units? Mr. Peters stated affordable sites can be feathered out a little more to set up receiver zones for units and have a target of where they will go. The more built out the City gets, the tougher it will be. Higher density units is one way to solve the problem. There are plenty of projects around the Bay Area where you can't distinguish affordable from market rate units. Jennifer Mosel, Tri~Valley Coordinator for Community Resources for Independent Living and DUblin resident stated she has expressed concerns to former City Staff who have now 1eft. What concerns her is we have an implementation plan but no element. This is like putting the cart before the home. All of the things could be looked at at once rather than piecemeal. That is what's happening now and it is creating controversy and more concerns. She stated she understood a consultant is close to being hired. We should use this consultant to the best use by having them look at the big picture. No one seems to think doubling the fee is the only solution. She thanked the City Council for moving forward with the 15% fee. People are watching and people notice and the City Council is tobe congratulated. In-lieu fees need to be high enough to encourage builders to build affordable units. Other cities in the valley have higher fees and they have not had a problem attracting developers to their communities. Banks and landlords look at and CITY COUNCIL MINUTES VOLUME 20 REGULAR MEETING July 17, 2001 PAGE 307 prefer that a ratio of only $0% of a family's income go toward housing costs. Many people commute all the way from Modesto and Sacramento because the number of affordable units available is so low that the wait lists are a minimum of two years. She stated she looks forward to participating in the solution. Peter MacDonald 400 Main Street, Pleasanton, stated he was here on behalf of the Lin Family and Marty Inderbitzen, developers of Dublin Ranch. They do not oppose an increase in the fee. When you get into the math for very low income housing, it becomes virtually impossible to work this out. They are opposed to attachment 3, because it implements the policy before we've done the study. It's like ready, shoot, aim. We should talk about a 15% goal and then everyone sit down and talk about how we get this done. If you make bad decisions in the middle of a disaster, you make things far worse. The Bay Area housing market is a disaster. Set asides are probably the least efficient to the point of being counter productive as a way of promoting housing affordability. One of the first victims is redevelopment. As long as 98% of our consumers are using market rate housing, we need to look at ways to make them affordable by design and by supply. Dublin has been doing more than its share of market rate housing. Adolph Martinelli, Manager of the Alameda County Surplus Property Authority, stated they will have 1500 residential units before the City Council in the transit area. They support this increase in fees. Dublin's current fees are the lowest of any jurisdiction he is familiar with. This would be a good start. As part of their application they would propose to have a site available to accept 15% low income development and it would require resources to be directed to the site as well as their land. This would be much more effective than some small inclusionary units. He applauded the City Council for looking at the issue and stated there is a study to be done on the broader issues. Vice Mayor Lock&art stated she appreciates'the County's offer of 15% affordable housing. There are some areas where it should be higher such as the transit area where she will be looking at closer to 30% overall. She would expect to see a higher percentage in that particular area. Mr. Martinelli stated they are proposing 15% moderate and not to burden the market rate project and in addition they propose to set aside a site to be a receiver for mixed family or senior housing, or in conjunction with private developers, and this would be about 200 units. They are designing the entire transit center as a unit. Cm. Zika stated he would not want the low income units to be segregated from everyone else. He doesn't want to create another Arroyo Vista. CITY COUNCIL MINUTES VOLUME 20 REGULAR MEETING July 17, 2001 PAGE 308 Mr. Martinelli stated the site they would make available would have various units of affordability as well as market rate units. They will have to forsake some economic opportunities in Order to compete. Mr. Ambrose discussed tax incentives and bond programs, which make some of these programs possible. The percentage of the units makes you competitive for these funds. As we get into this, we will have to look at it carefully. Bruce Fiedler, a 15 year resident of Dublin, stated for the last 16 years he has directed an affordable program in a neighboring community. He supports revisions to the policies and guidelines for the IZO being considered. He talked about the district where he has worked since I985. Diversity in the buildings is reflected also in the diversity of the income and family composition among residents. The spirit of inclusion is critical to the well~being of our City's economy and to the vigor of the spirit and soul of Dublin. Guy Bjerke, with Home Builders of California, stated they desire to see a more broadly based solution. Establish a goal and fold this discussion into a broader view and consider ali the options. Setting numbers is a mistake. Set a goal and with additional work, you may come to different conclusions during this process. They are greatly concerned about the attachment $ resolution as this is putting the cart before the horse. It implies that anyone who comes in to make an application tomorrow, they will be subject to the regulations, no matter what they may be. People have to comply with the rules as they exist. They find this troubling. Cm. Zika stated we have a 5% goal now and we are not achieving this, What can we do? Putting the goal higher is a meaningless figure. If we put a mandatory clause in, then you have to meet it. Mr. Bjerke stated the question will be what is the new homebuyer's share? In the scheme of things, it may be a different figure. Staff will have to explain why Dublin hasn't met its housing goals. He's concerned about, the 7 ½%/7 ½% as hard numbers. The resolution doesn't change the program, it just doubles the fee. Cm. Zika asked if they object to any mandatory number or to the 15%. Mr. Bjerke stated they don't know right now what makes the most sense for the build out of Dublin. Cm. Oravetz stated as a Planning Commissioner they approved many projects. The goal is now I 5%, but they're asking for flexibility in getting to that 15%. CITY COUNCIL MINUTES VOLUME 20 REGULAR MEETING July 17, 2001 PAGE 309 Cm. Zika stated he is looking for something with a little more teeth. We've tried the carrot and it hasn't worked. He stated he wants units, so if we do inclusionary, we get units. Tim Sbranti stated he agreed with Bruce Fiedler about the healthiest and most vibrant communities being those with a mix of high end and very low. Inclusionary zoning can help with the goal that we share. Mayor Houston .closed the public hearing. Vice Mayor Lockhart stated since suggesting this 15% figure, she has had a lot of opportunities to discuss this with the development community and appreciates the feedback she has gotten. Dublin is not currently accomplishing its goals and it's time to start doing something about it. Make builders and developers partners and work together. She stated she agreed that we cannot put the responsibility for affordable housing on one group or element in our community. It is the responsibility of the' entire community. She applauded Mayor Houston's suggestion of putting in the $I million. This will keep affordable housing as a priority in our community. In trying to have a mix, we may lose some very good projects. Fifty percent will be in the moderate range and she stated she doesn't want to see us sacrifice this group because it can't support low and'very low. Land banking, fund pooling, etc., can be looked at to help us accomplish needed housing. It will take some work to get the tool box together and figure out ways of doing this. She would like to see us go with a 15% affordable goal tonight and put together workshops to come up with ideas of getting us to where we want to go. She would like to see us make changes in the resolution that establishes Citywide goal of 15% and works toward making all of Dublin an affordable and wonderful place to live. Cm. McCormick stated she wanted to talk about doubling the in-lieu fees. We've been the lowest in the area for years. She proposed that the Council approve doubling the tees. On mohon of Cm. McCormick, seconded by Cm. Zika, and by unanimous vote, the Council agreed to double the in-lieu fees and adopted RESOLUTION NO. t31 -01 AMENDING RESOLUTION NO. 57-97 ESTABLISHING THE METHOD FOR DETERMINING THE AMOUNT OF HOUSING IN-LIEU FEES PA 01-014 CITY COUNCIL MINUTES VOLUME 20 REGULAR MEETING July t7, 200t PAGE 310 With regard to the resolution stating the City's intent to increase the percentage of affordable units, Cm. Oravetz suggested changing the third whereas to add "goal". Mayor Houston stated he felt the important thing is to do the study first. We have no idea what the ramifications are and what this really means. If you waive fees, it's really more than 15%, because you have to add in infrastructure costs. We are somewhat like a giant homeowners association. Every unit built has to pay for certain fees for services. Until we know what the ramifications are, we should wait until the consultant looks at this. Throwing out any number right now doesn't make any sense. Cm. McCormick stated this is a notice of intention, bu[ it actually won't take effect until after a study is done. What is the purpose of changing anything in this now? It is academic, so what is the purpose of tweaking it? Vice Mayor Lockhart stated we are making it quite clear that our goal is 15%, and this stimulates the discussion in this area. Mayor Houston stated he felt the message has been heard. He doesn't see any reason for this resolution at all. There is no teeth in it, but there is not meant to be anyway. Mr. Peabody stated this is not a requirement. We have done this before when we have .contemplated an increase in. fees. It puts it on record that we are considering changes. Mayor Houston stated since we annexed the transit area we've known that high density projects are coming along. This gives us an opportunity to really sink our teeth into something. He discussed our numbers with neighboring community's numbers. We have a long way to go, but to say we haven't done anything is simply not true. He applauded the Council for saying this is a Citywide problem and putting General Fund money in. He again stated he did not feel we even need this resolution at this time. Cm. Zika clarified that all this has to be put together by the end of the year. Mr. Peabody stated we are already working on the housing element right now. Cm. Zika discussed looking at a fee based on selling price of a new home. By the end of the year, we will hopefully have our act together. Cra: McCormick stated she felt we need this goal and we need this number. CITY COUNCIL MINUTES VOLUME 20 REGULAR MEETING July '17, 200'1 PAGE 311 Vice Mayor Lockhart stated she is not willing to back away from the goal of 15% Citywide at this point. The infrastructure is probably the biggest thing. It costs the same to build a road in front of this house as that house. Vice Mayor Lockhart referenced the third "whereas" of the resolution, which currently reads: "WH£1g~AS~ ~e Council has expressed its intent: A. to increase the CiO,'s Affordable Housing Set Aside~ to 15~, and B. to prohibit In-Lieu Fees from being used for a pozgion of the Affordable Housing Set-Aside, win'ch ~vould not exceed one~half of the Affordable Housing Set-Aside; and iVO kV, TH£RF, FOI?~, 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 protubit In-Lieu Fees from tx~ing used for more than one-half of the Inclusionary unitS. ' Vice Mayor Lockhart suggested changing it to read: A. to establish a Citywide affordable housing goal of 15% and the second a) would read: a) to establish a Citywide affordable housing goal of 15% and leave out amount that would not exceed one-half The Council next discussed potential wording: A. to establish a Citywide affordable hOUsing goal in an amount not to exceed 15% of new housing units and to leave in both B. and b) as they currently read. Mayor Houston stated he felt at some point you have to do the study. Vice Mayor Lockhart suggested, after additional discussion, that they remove both B. and b) sections. Following further diSCussion, Vice Mayor Lockhart stated she did not mind leaving B. and b) in. We don't want everybody copping out to the fee. We want to close this loophole. CITY COUNCIL MINUTES VOLUME 20 REGULAR MEETING July 17, 2001 PAGE 312 The final agreed upon language was: WHEREAS, the Council has expressed its intent: A. to establish a Citywide affordable housing goal of 15%; and B. 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... NOW, THEREFORE, be it resolved that the City intends to amend the Inclusionary Zoning Ordinance: a) to establish a Citywide affordable housing goal in an amount of 15% of new housing units; and b) to prohibit In-Lieu Fees from being used for more than one-half of the Inclusionary units. On motion of Vice Mayor Lockhart, seconded by Cm. McCormick, and by majority vote, with the changes discussed, the Council adopted RESOLUTION NO. 132- 0t EXPRESSING THE cI'rY'S INTENT TO INCREASE PERCENTAGE OF AFFORDABLE UNITS AND RELATED CHANGES TO THE INCLUSIONARY ZONING ORDINANCE Mayor Houston voted in opposition to the motion. Mayor Houston asked if the General Plan and Zoning Ordinance amendments regarding affordable housing issues as they relate to Inclusionary Zoning and final Ordinance changes would be done with all the other studies? · Mr. Peabody stated they could change the General Plan and look at changing the Inclusionary Zoning Ordinance. On motion of Vice Mayor Lockhart, seconded by Cm. Zika, and by unanimous vote, the CounCil adopted Staff recommendations as follows: #2 Confirmed Council direction to establish priority areas for affordable housing in new developments throughout the City. #5 Authorized a GPA Study to determine GP changes that may set goals for affordable housing in various geographic areas of the City. #6 Instructed Staff to schedule a City Council studY session in September or October, 2001, regarding specific Potential Inclusionary Zoning Ordinance amendments. #7 Instructed Staff to complete any Gl' and Zoning Ordinance amendments regarding affordable housing issues as they relate to Inclusionary Zoning and final Ordinance changes by November, Z001 for appropriate. public hearings. CITY COUNCIL MINUTES VOLUME 20 REGULAR MEETING July 17, 2001 PAGE 313 Inclusionary Ordinance Working Group 1) Maurine Behrend Tri-Valley Interfaith Poverty Forum 820-0758 P O Box 1652 San Ramon, CA 94583 . Fax 925-838-2483 2)' David Bonn Northern California land Trust 510-548-7878 ext. 343 3126 Shatmck Ave Berkeley, CA 94705 Fax 510-548-7562 6) Marry Inderbitzen . 925-485-1060 7077 Koll Center Parkway # 120 Pleasanton, CA 94566 Fax 925-485-1065 3) Kevin Peters Shea Homes 245-3604 2580 Shea Center Dr. Livermore, CA 94550 Fax 925-245-8833 4) 5) Phil Serna Home Builders Assoc. 820-7626 ext. 209 P O Box 5160 San Ramon, CA 94583 Fa>/ 820-7296 Linda Mandolini. Eden Housing 510-247-8117 409 Jackson St Hayward, CA 94544 Fax 510-582-6'523 ATTAOHM~Ni ,,I~~' · CITY CLERK AGENDA STATEMENT CiTY COUNCIL MEETING DATE: July"17, 2001 SUBJECT: ATTACItMENTS: RECOMMENDATION: FINANCIAL STATEMENT: 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) Resolution, (amending Resolution 57-97, attached for Reference), which will chauge in-lieu housing fees Excerpt from 1990 Housing Element (Pgs. 46 & 47) Resolution approving notification to developers of pending changes to Inclusionary Zoning Regulations 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 staffto schedule a study session in September or October, 2001, with the City Council,. regarding specific potential Inclusionary Zoning Ordinance amendments 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 None at this time g:agenda/2001/cc 7-I7 IlaclilSi0narY ZO. doc %/ -~-(D ATTACHMENT DESCRIPTION: meeting with a discussion of timing for possible changes to the present Inctusionary Zoning regulations related to required percentages of affordable housing, in-lieu fees and constructing affordable units. In addition, staff was 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. The City Council at its June 5, 2001, meeting asked staffto return at the July~ [Z" '~ ~ ~-'~ 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 Inclusiona~y 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. Thereafter, on June 3, t997, 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 agree ..ments 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. 5-7- 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 8.68.110.) Incentives include (a) deferral of both processing fees and development impact fees if deferral wilt 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. I 10(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 ofaffordability. (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 .~' Polie~ 4-7, 4-8,. 4-9 and 4-10 require developers t6 Pi0vide affordable housing in accordance with the [tusior~ary Housing Ordinance. Action programs 4-F, 4-G, 4-H and 4-I requires development of an inclusionary 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 dkectly relate to new development in the 'community. At a later date, these proposals will be reviewed bythe 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 lnclusionary Zoning Ordinance. The resolution of this request will serve to pro. vide 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