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HomeMy WebLinkAbout3/11/2020 Item 2, Corey Memorandum City of San Luis Obispo, Council MemorandumCity of San Luis Obispo, Council Memorandum Date: March 6, 2020 TO: Planning Commission FROM: Tyler Corey, Principal Planner SUBJECT: Item # 2: ARCH 0459-2019 (1035 Madonna Road) Inclusionary Housing Requirement Staff is recommending a new condition of approval to address the Inclusionary Housing Requirement for the project. This change comes in response to several factors, including: 1.The proposed multi-family project is made up entirely of for-sale units. 2.A major new affo-Help Housing Corporation is being proposed as part of a mixed-use project within the San Luis Ranch Specific Plan area that will accommodate the 26 very-low income units currently identified on the multi- family site. 3.With the new affordable housing proposal and an additional 17 units of moderate-income affordable, for-sale, housing on the multi-family site, the overall project will exceed the 15% affordable threshold making it eligible for significant grant funding for infrastructure, energy efficiency projects and other grant programs. For Sale Units The analysis in the staff report is exactly how the City approaches rental housing for very-low, low, and moderate-income housing. 20 years of experience managing an Inclusionary Housing Program has resulted in a more practical approach on for-sale housing products. Very-low income, deed-restricted housing is not effective on the for-sale market. Even with deed restrictions that limit sales prices, the world of buyers who can qualify for and maintain a mortgage is extremely limited. The result is typically frustration on the part of both buyers and sellers, frequent turnover, and potential financial harm to the household. As a result, very-low income units are universally understood to be units that are rented. Furthermore, residents of these units benefit from additional services provided to them through the qualified affordable housing provider. For example, -Help Housing Corporation provides a range of services such as after-school care, health and wellness services, and job training/support for the residents of its affordable housing projects. New Project Proposal City staff has been working with MI San Luis Ranch on a new affordable housing proposal for the NC-designated retail portion of the San Luis Ranch site. The proposal for a mixed-use, affordable housing project in connection with neighborhood serving retail uses adjacent to the new neighborhoods will be submitted as a formal planning application shortly. City staff is excited about the proposal because it offers several benefits. The plan is for this affordable housing site to accommodate all of the affordable housing required for the commercial development (34 units), Item #2 (1035 Madonna Road) Page 2 the very-low income units from the multi-family site (26 units), plus additional affordable units for a total of approximately 77 affordable homes. The plan has been undergoing revisions based on staff direction and ultimately will provide for a retail site in a mixed-use configuration that is integrated better with the adjacent neighborhoods. This change is expected to both improve the performance of the retail area and provide for more affordable housing units than previously expected. Current project approvals allow for in-lieu fees to be paid to cover the affordable housing requirement for all of the commercial development within the Specific Plan area. However, production of more affordable units is strongly preferred. Grant Eligibility In discussing these changes with the project applicants, the City has identified grant opportunities that are now within reach with the provision of a small additional increment of affordable housing. In contrast to very-low income housing, moderate-income affordable housing price points and eligible incomes are suitable for deed-restricted, for-sale units. The City has had significant success with managing these units, and many exist throughout the area including in the De Tolosa Ranch, Rancho Obispo, Broad Street Mixed-Use, and most recently in the Noveno and South Morros projects in the Orcutt Area. The developer has agreed to work with City staff on grant applications and affordable housing agreements to achieve the minimum thresholds of affordable housing necessary for grant eligibility (typically 15%). Staff estimates that this may result in about 17 additional deed-restricted units for sale within the multi-family project site. As a result, staff is seeking flexibility to work with the applicant to negotiate the appropriate affordable housing agreements and covenants to guarantee the additional affordable housing production. This effort is particularly important given the overall increase in costs associated with project infrastructure, as experienced to date. For example, the Prado Road Interchange construction costs have increased over 50% from original estimates making the ability of the project to qualify for additional grant funding particularly crucial. Summary For these three key reasons, the following language is now proposed to replace Condition of Approval #14 of the Draft Resolution approving the development plan (agenda packet page 15): A. Base Inclusionary Housing Requirement: Prior to issuance of certificates of occupancy, the City and the project owners shall enter into an Affordable Housing Agreement for the inclusionary affordable housing units to be developed in the NG-30 Zone, which will be recorded in the office of the County Recorder. units shall be shown in the final Affordable Housing Agreement to be spread throughout the Zone, as described in the Affordable Housing Plan dated October 24, 2019. The twenty- affordable housing provider and shall be clustered into one or more buildings, the location and unit mix of which, is described in the Affordable Housing Plan for the project dated October 24, 2019. Services offered by the qualified housing provider may be provided either on or off-site pursuant to an agreement with the qualified housing provider approved by the City prior to initial occupancy of the first very low-income level unit, and as updated from time to time. - sold or rented subject to the inclusionary housing provisions of the City per the final recorded Affordable and Workforce Housing Agreement and Declaration of Restrictive Covenants for the San Luis Ranch project. Item #2 (1035 Madonna Road) Page 3 B. The Base Inclusionary Housing Requirement may be modified by the Community Development Director in the event that an application for an Affordable Housing Project on the NC portion of the San Luis Ranch Specific Plan area is approved providing for the development of at least the same number (26) very-low income affordable housing units currently proposed for the multi-family site. C. This approval shall not be construed to limit the amount of affordable housing that can be provided on the project site. Additional affordable housing units, as may be necessary to qualify for certain grant applications, may be provided. Development Review Resolution Modification Pedestrian Walkway within Townhome Neighborhood: The VTTM shows a pedestrian walkway on the north side of the 30' wide main east-west driveway within the townhome neighborhood that connects to the north-south shared street for the multi-family project. However, the site plan and landscape plans do not appear to show that pedestrian connection. The concept shown on the VTTM is the intent of the project. Staff will work with the applicant team to more clearly indicate a similar concept on the site plan and landscape plan. Staff recommends the following condition to be incorporated into the action for the meeting of March 11, 2020. The site plan and landscape plan shall be modified to clearly show a pedestrian walkway on the north side of the 30' wide main east-west driveway within the townhome neighborhood that connects to the north-south shared street for the multi-family project, consistent with what is indicated on VTTM 3150 as proposed. Vesting Tentative Tract Map Resolution Modification Finding 2: This finding, shown on Packet Pages 143 and 144, contains out of place and missing language. In the second line, the words, "since the resulting parcels" should either be deleted or followed by an explanation. In the fourth line at the top of Packet Page 144, the words "with the requirements of the" should be followed by examples of the requirements with which the units comply. Staff recommends the following changes to the finding to be incorporated into the Planning action for the meeting of March 11, 2020. 2. The site is physically suited for the type and density of development allowed in the NG-30 zone of the SLRSP, since the resulting parcels since only minor deviations from open space requirements for the efficiency units are required from the Subdivision Regulations and all other units within the project comply with the private and community open space requirements of the SLRSP, and resulting development will be subject to consistency with the development standards of the Zoning Regulations.