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Home My WebLink About11/21/2000, 8 - WAIVER OF IMPACT FEES FOR AFFORDABLE HOUSING council. Mtt°��;, j Ac,Enaa Report 1�N°J CITY OF SAN LUIS OBI'SPPOOO FROM: Bill Statler,Director of Finance 1e` SUBJECT: WAIVER OF IMPACT FEES FOR AFFORDABLE HOUSING CAO RECOM MNDATION Adopt a resolution waiving City-wide development impact fees for affordable housing units in excess of inclusionary requirements. DISCUSSION Background It is the City's policy to encourage the production of affordable housing. We have implemented several programs to help achieve this goal such as issuing housing revenue bonds to reduce interest costs as well as waiving meter installation fees and development review fees (services like planning, engineering, building and fire plan check) for affordable housing units. However, the City does not routinely waive development impact fees for the facilities needed to serve new development (like water, wastewater and transportation infrastructure). As part of the 1999-01 Financial Plan, the Council adopted several work programs to encourage the production of more affordable housing. Among these was considering the waiver of development impact fees for affordable housing. Proposal Summary We recommend waiving development impact fees on residential units meeting the City's affordable housing criteria that either: ■ Exceed the number required by the City's inclusionary housing requirements (5% affordable units in the current City limits and 15%in annexation areas). ■ Are built, owned and managed by the San Luis Obispo Housing Authority, other governmental agencies or not-for-profit housing organizations. This proposal only applies to City-wide impact fees; it does not apply to fees, assessments or special taxes for infrastructure improvements applicable to special benefit areas. As reflected in the sidebar chart, impact fees Development for single (SFR) and multiple family (MFR) Water 6,827 5,462 residential units are significant. If adopted, Wastewater 2,703 2,163 the proposed waiver would reduce costs for Transportation 1,386 1,230 each eligible SFR unit by about $11,000 and Total $10,916 $8,855 $8,900 for each MFR unit. S-1 Council Agenda Report—Waiver of Impact Fees for Affordable Housing Page 2 Assuring Units Remain Affordable The proposed waiver would only apply to units that qualify as affordable housing under the City's General Plan. As set forth in Section 2 of the Housing Element, for units to qualify as affordable they must meet specific household income criteria. Additionally, guarantees must be presented that the units will meet one of the following criteria: ■ Remain affordable for at least 30 years. ■ Participate in a City-approved equity sharing program. ■ Provide such guarantees as are otherwise required or permitted by State law, consistent with the affordable housing standards. Notifications In accordance with our fee notification policy, we directly notified over 50 community groups and interested individuals (including the Housing Authority) about this meeting on October 9, 2000. We offered to answer any questions, meet with them at their convenience and provide them with a copy of the Council Agenda report when it became available. No responses had been received when this report was prepared. CONCURRENCES The Community Development, Public Works and Utilities Departments concur with this recommendation. FISCAL IMPACT This is difficult to assess, since the waiver is only recommended for units in excess of current requirements. If this proves to be an effective incentive resulting in significantly more affordable units, then there could be significant revenue losses that would have to be made—up from service rates in the water and sewer.funds to cover reduced water and sewer impact fees, and from general purpose revenues in the General Fund to cover reduced transportation impact fees. On the other hand, if this occurs, we will have achieved a key City goal of producing more affordable housing than we otherwise would have. Under our General Plan policies, this would seem to be a reasonable trade-off in balancing competing goals. ALTERNATIVES ■ Extend the waiver to all affordable units. This would provide a direct subsidy for units that are already required under our existing affordable housing requirements. As such, it would not result in additional affordable units, but it would result in significant revenue losses. 8-2 Council Agenda Report—Waiver of Impact Fees for Affordable Housing Page 3 ■ Do not waive impact fees for affordable units. This would not provide an added incentive for affordable housing. Further, in the case of the Housing Authority and non-profit groups, the City has waived impact fees in the past for affordable housing, but on a case-by-case basis. The proposed policy would change this from a practice to a standing policy, providing the Housing Authority and others with greater assurance about these costs as they prepare financing plans. ATTACHMENT Resolution waiving City-wide development impact fees for affordable housing units in excess of inclusionary requirements. G:Revenue Management Manual/Affordable Housing Impact Fee Waiver/Council Agenda Report 8-3 RESOLUTION NO. (2000 Series) A RESOLUTION OF THE COUNCIL OF THE CITY OF SAN LUIS OBISPO WANING CITY-WIDE DEVELOPMENT IMPACT FEES FOR AFFORDABLE HOUSING UNITS IN EXCESS OF INCLUSIONARY REQUIREMENTS WHEREAS, the City's General Plan requires that the costs of public facilities and services needed for new development shall be bome by new development unless the community chooses to help pay the costs of a certain development to obtain community-wide benefits; and WHEREAS, the City has implemented a number of programs to implement this policy, including the adoption of development impact fees; and WHEREAS, the City's General Plan encourages the production of affordable housing for very-low, low and moderate income households; and WHEREAS, the City has implemented a number of financial assistance programs to help achieve this goal, including the waiver of development review fees and meter installation fees and issuance of housing revenue bonds; and WHEREAS, the City has adopted "inclusionary" housing requirements for new development in order to help achieve the City's affordable housing goals; and WHEREAS, reducing the cost of the public facilities and infrastructure needed to serve new affordable housing units that exceed the City's inclusionary housing requirements may help encourage the production of even more affordable units. NOW, THEREFORE, BE IT RESOLVED by the Council of the City of San Luis Obispo that City-wide development impact fees are hereby waived on residential units qualifying as affordable housing under the criteria set forth in Section 2 of the General Plan Housing Element that either: 1. Exceed the number required to meet the City's inclusionary housing requirements. 2. Are built, owned and managed by the San Luis Obispo Housing Authority, other governmental agencies or not-for-profit housing organizations. This exclusion only applies to City-wide impact fees; it does not apply. to fees, assessments or special taxes for infrastructure improvements applicable to special benefit areas. I -`i Resolution No. (2000-Series) Page 2 Upon motion of __- - -, ocond'ed by _ - -- and on the following roll call vote: AYES. NOES: ABSENT: the foregoing resolution was adopted this 21"day of November-, 2000. Mayor.Allen Settle ATTEST: Lee Price, City Clerk APPROVED AS TO FORM: Jeffrey G.Jbrgensen, City Attorney 11/21/2000 16:25 8055446183 FRASERSEIPLE PAGE 01 MEETING AGENDA FRASER DATE�ITiEM #� • SEIPLE November 21, 2000 Bill Statler City of San Luis Obispo 890 Palm Street San Luis Obispo, CA 93401 RE: Clty Council Agenda Public Hearing Item 8. Waiver of Development Impact Fees for Affordable Housing Dear Mr. Statler: We would like to strongly encourage the City Council to adopt the proposed resolution waiving Citywide development impact fees for affordable housing units in excess of inclusionary requirements. We support this waiver on behalf of our affordable housing clients and as advocates for the public support of this Important building type. As you are no doubt aware it currently requires funding packages cobbled together from four to • eight different sources to support the most humble of affordable housing developments. Even then many good projects are not financially viable without some additional form of assistance.We feel that the fee waiver program is an appropriate instance of Council policy supportive of General Plan housing goals. Thank you for conveying our support to the members of the City Council. Sin Y. Bruce Douglas Fraser, AIA Principal FRASER SEPLE ARCmrrECTS LL _ .y. . ..., RE�E��E� '-�• � �. N�y7 . � 700 SLO CITY 0 COUNT 1 °' /L ❑FeRs e�.^, 1 n 971 Osos Street San Luis Obispo Calffornia 93401 lel:805 544.6161 fr.SOS 5444183 e-mail:archoff Q ix-netcom.cam NOV-21-2000 17 32 JUDSON '.'c.RRACE HOMES 805 544 1645 P.01 JUDSON TERRACE HOMES Roger C. Jump, Manager 3000 Augusta Street/San Luis Obispo, California 93401/Telephone 805/544.1 Goo Q.. ACENDA November 21, 2000 '' = Bill Statler, Finance Director City of San Luis Obispo 990 Palm San Luis Obispo, CA 93401. Dear Mr. Statler: I am writing on behalf of Judson Terrace Homes in support of the resolution to waive development impact fees for affordable housing. With the dramatic increase in housing costs which only continues to climb, this is a very significant contribution the city can make to assist not-for-profit housing providers in the development of additional housing for our low- income clients. Passing this resolution, in fact, would help to bridge a funding gap due to unanticipated, rapid increases in construction costs, in our current 30 unit assisted living project. The passing of this resolution would meet approximately one third of that funding gap. We would appreciate your conveying our support of this measure to the city council . Sincerely, Roger C. Jump Administrator RFCE��o sco°� 2 � 2000 c1n'co Non-Sectarian Services in Retirement Living Ou7i_C:'i ❑PERS G•::, �o� Managed by 0�� _ 11:W American Baptist Homes of the Wes[ TOTAL P.01