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HomeMy WebLinkAbout7/19/2022 Item 7b, WyattHos'Nng smart (((�(( soluutIlons g/,� % l% r roof/c IIIIIIIIIIII � r�i.,�%/ 1(j IIIA � ra//%, � l ,cici Creating Ih0UIIS1hr1g SollUtiioiris Ih y a �oirrirnectiiirng Ipeople & Ihoi mne July 13, 2022 Dear Mayor Stewart and Councilmembers Pease, Marx, Christianson and Shoresman: As a not-for-profit agency providing affordable housing and housing services primarily for San Luis Obispo's lower-income residents, Smart Share Housing Solutions appreciates the opportunity to comment on the City's new inclusionary housing ordinance and associated housing updates. We wholeheartedly support the updated ordinance as written and commend City staff for their work writing the new ordinance and bringing before you the clear and well substantiated reasoning for the necessary changes in the staff report before you. The updated ordinance will enhance the City's ability to produce lower-income affordable units, building on the proven effectiveness of the previous ordinance it replaces.. HASLO, T MHA, People's Self Help Housing and other non-profit affordable housing agencies, in addition to Smart Share, rely on the inclusionary housing fund in lieu fees to leverage other sources of funding and construct affordable housing. Relatively small percentages of inclusionary funds can and do make a variety of affordable housing projects possible, meaning City residents get the benefit of affordable housing produced at relatively low per unit contributions. For example, Smart Share anticipates matching an approximate one million dollar contribution from the City's inclusionary fund with four million dollars of outside contributions to construct its proposed Waterman Peace Village, a 100% low income affordable housing project, now moving toward development review. Looking beyond the numbers, equity, a priority goal of yours and City residents, is at the heart of the inclusionary ordinance—a mandate that City residents of all income strata share in the benefits of new development. This equity is out of the equation without an inclusionary ordinance. The numbers show, as clearly articulated by your staff in the report before you, that without these inclusionary requirements a significant share of the City's population is left out and locked out of new development. Increasing numbers of residents left out and locked out has dire consequences for us all in terms of demoralization of unhoused persons and dismal health outcomes, public safety and environmental degradation. We would request that you and staff consider two small changes and clarifications in the draft ordinance before you: 1. Added housing units to existing developed parcels exemptions clarification: We agree with and support the change for the in lieu fee to apply to developments of less than 5 new units, in general. We would recommend that language be added to the exemption Sec. 17.138.020 to clearly exclude from the fees a few additional types of development beyond the currently exempted ADUs_ which could be constructed on lots with existing developed housing: JADUs and SB9 lot split construction. All of these types of housing could add much needed density to existing single family zones and provide relatively affordable, small units, and family flexibility, providing both rental and sale units, so we believe a clear exemption for all of these types of home would be warranted. Clarifying these exemptions could be accomplished several ways: a. by adding in " JADU" to Sec. 17.138.020A.2, which exempts ADUs from the ordinance and creating a new separate exemption line for SB9 lot split housing. b. Alternatively, language could be added in exempting "the addition of up to 3 housing units on existing lots with existing housing." 2. The term of affordability is listed now at 45 years for purchase housing and 55 years for rentals. We would encourage you to require a minimum of 55 years for each. We see the havoc caused with the expiration of affordability terms and we would advocate that all affordability terms be as long as legally allowed. General comments: • Inclusionary ordinance and missing middle housing: As we read correspondence commenting on the proposed ordinance, we believe there is a false construct in suggestions that the inclusionary ordinance is at odds with creation of "missing middle" housing. Nothing about passage of this new inclusionary ordinance prohibits missing middle housing or prohibits you from utilizing other tools that can work in addition to this ordinance. Indeed, the housing in lieu fees are based on square footage of housing, so smaller ("missing middle") houses pay a significantly reduced in lieu fee than larger homes: At $25/sq. ft, the 500 square foot for sale home would be subject to a $12,500 fee and the 1,000 square foot home, double that, at $25,000, and upwards from there. Indeed, that fee structure incentivizes small homes, not the other way around. • Support for Table 2A removal: The thorough and in depth analysis in your staff report accurately describes how necessary Table 2A [fee exemption] removal is in the new ordinance. The homes produced under previous 2A exemptions are simply NOT affordable. It is unclear to us how the claim can be made that continued 2A exemptions are warranted when they have clearly been shown NOT to produce affordable housing and assist in meeting RHNA mandates. Beyond the inefficacy of the previous exemptions to create actual affordable housing, we would call your attention to a few additional points: 1) Changing demographics: more than a third of SLO households are single person households, and households countywide are also aging. These home buyers and renters want smaller, walkable neighborhood homes they can maintain with age, actually afford, walk to things and that they can manage alone as they age, lose hand strength, mobility and ability to drive. To a large degree, already, developers are not building smaller units because of Table 2A, they're building smaller units because there is a hefty demand for smaller, more land and energy efficient homes—and we can fit more such homes into a given parcel, allowing for profits even on smaller, less expensive home projects; 2) density bonus affordable housing construction allows for added home construction beyond maximum density allowances and this construction exempts base density homes from any inclusionary requirements. This means that the costs of the affordable home provision can be cushioned project wide through ability to construct more homes than would otherwise be allowed. This is an added mechanism to cover or eliminate any added cost to home developers from the 2A exemption removal. 10% requirement for for sale housing vs. 6% for rental housing and flexibility provided: We appreciate the distinction, requiring that a higher proportion of for sale housing be affordable, as at market rate it is inherently less affordable. In reviewing community comments, we see some criticism about this and would point out that if developers do not want to provide the 10% affordable for sale homes, they have the option to pay the fee, which will likely translate into rental homes produced and managed by non -profits. They can also use the density bonus allowances to build above density homes, described above. While there could be some debate which form of production is more desirable and more efficient between for profit builders constructing the housing on site or non-profit builders constructing elsewhere using accrued fees, it is the case that the ordinance, as written, provides a variety of options to builders, a necessary component of a successful ordinance and program going forward. Added funding sources for affordable housing: Yes, we are in full support of deploying all programs listed and more to get lower income affordable housing produced in the City and we continue to applaud and support ALL your efforts toward this end. We do not see how anything in the package before you precludes or hinders any such necessary additional activities, in this respect. Thank you for passing the ordinance, with minor changes proposed. We look forward to enhanced equity and housing options for all City residents and continuing to work with the City, supporting its efforts to help provide affordable housing solutions, in a wide variety of form—making use of every tool and means before us—from safe parking and sanctioned camp sites, to homeshares, new small home production, ADUs and JADU production, tiny home on wheel (THOW) placement, tiny house villages, RV parks, off grid caretakers cottages, faith based organization housing construction, live/work dwellings and protections for the City's vulnerable mobile home park residents. Sincerely, Anne R. Wyatt, Executive Director Smart Share Housing Solutions, Inc.