HomeMy WebLinkAboutO-1720 amending Title 4 to add Chapter 4.60 to establish a Commercial Linkage FeeO 1720
ORDINANCE NO. 1720 (2022 SERIES)
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF SAN LUIS
OBISPO, CALIFORNIA, AMENDING AMEND TITLE 4 OF THE CITY OF
SAN LUIS OBISPO MUNICIPAL CODE TO ADD CHAPTER 4.60 TO
ESTABLISH A COMMERCIAL LINKAGE FEE WITH AN EXEMPTION
FROM ENVIRONMENTAL REVIEW (CEQA)
WHEREAS, the City of San Luis Obispo (“City”) aims to provide sufficient levels
of affordable housing for its residents; and
WHEREAS, development of new commercial projects encourages new residents
to move to the City, and some of the employees needed to meet the needs of new
commercial development earn incomes only adequate to pay for affordable housing; and
WHEREAS, because there is a need for additional affordable housing within the
City, these employees might otherwise be forced to live in less-than-adequate housing
within the City, pay a disproportionate share of their incomes to live in adequate housing
within the City, or commute ever-increasing distances to their jobs from housing located
outside of the City, thereby harming the City’s ability to attain goals articulated in the City’s
General Plan; and
WHEREAS, the City Council of the City of San Luis Obispo conducted a web-
based public hearing via teleconference on November 17, 2020, for the purpose of final
adoption of the sixth cycle update to the General Plan Housing Element that included
Program 2.13, which provides, “Update the Inclusionary Housing Ordinance, including
Table 2A, based on findings and recommendations in the 2020 Affordable Housing Nexus
Study and conduct further feasibility analysis in order to evaluate the City’s ability to
provide affordable housing in the proportions shown in the Regional Housing Needs
Allocation, per Policy 2.4”; and
WHEREAS, on April 21, 2020, City Council reviewed a Nexus Study prepared by
David Paul Rosen and Associates (DRA) which confirmed that both market-rate
residential and commercial development are creating demand for affordable housing that
is not being met by the current housing market; and
WHEREAS, pursuant to Government Code Section 66001, the Nexus Study
establishes that there is a reasonable relationship between the commercial linkage fees
and the commercial development on which it is imposed and between the need for
affordable housing and the commercial development projects against which the fee is
charged; and
WHEREAS, in April 2021, the City hired Economic & Planning Systems, Inc.
(EPS) to conduct a feasibility analysis of the City’s inclusionary housing requirements
based on the findings and recommendations included in the Nexus Study; and
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WHEREAS, the City may adopt and impose commercial linkage fees to mitigate
the impact of commercial development projects on available affordable housing in the
City under the authority of Sections 66000 et seq. of the California Government Code
(“Mitigation Fee Act”); and
WHEREAS, the commercial linkage fees will be placed in the City’s Affordable
Housing Fund and the fees will be used solely to increase the supply of housing
affordable to extremely low, very low, low, and moderate-income residents; and
WHEREAS, the State of California Office of Housing and Community
Development, on September 3, 2021, certified the City of San Luis Obispo’s 6th Cycle
General Plan Housing Element as in full compliance with State Law; and
WHEREAS, a Study Session was held by City Council on March 1, 2022, to review
staff’s recommended amendments to Chapter 17.138, that were derived from the Nexus
Study and the EPS financial analysis; and
WHEREAS, the City Council of the City of San Luis Obispo conducted a public
hearing in the Council Chamber of City Hall, 990 Palm Street, San Luis Obispo,
California on July 19, 2022, for the purpose of introducing an ordinance to implement
commercial linkage fees; and
WHEREAS, notices of said public hearing were made at the time and in the
manner required by law; and
WHEREAS, the City Council has duly considered all evidence, including the
testimony of the applicant, interested parties, and the evaluation and recommendations
by staff.
NOW, THEREFORE, BE IT ORDAINED by the Council of the City of San Luis
Obispo as follows:
SECTION 1. Findings. Based upon all the evidence, the City Council makes the
following finding:
1. All recitals are true and correct and are incorporated herein by reference.
2. The proposed amendments to Title 4 are also consistent with the 6th Cycle
Housing Element and implements program 2.13.
SECTION 2. Environmental Determination. The proposed amendments to the
Municipal Code Title have been assessed in accordance with the authority and criteria
contained in the California Environmental Quality Act (CEQA), the state CEQA
Guidelines, and the environmental regulations of the City. Specifically, approval of fees
and/or charges is not a “project” for the purposes of CEQA, pursuant to CEQA Guidelines,
Section 15378(b)(4); and even if considered a “project” under CEQA, would be exempt
from CEQA review pursuant to CEQA Guidelines Section 15061(b)(3), the “Common
Sense” exemption, because the proposed ordinance will have no possibility of a
significant effect on the environment and will not cause impacts.
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SECTION 3. Action. The City Council hereby adds Chapter 4.60, entitled
“Commercial Linkage Fees”, to the San Luis Obispo Municipal Code as set forth and
incorporated herein.
Chapter 4.60: Commercial Linkage Fees
Sections:
4.60.010 – Purpose.
4.60-020 – Definitions.
4.60.030 – Fees to be set by resolution.
4.60.040 – Payment of fees.
4.60.050 – Exemptions.
4.60.060 – Disposition and use of fees.
5.60.070 - Enforcement
4.60.010 – Purpose
A. Encourage the development and availability of housing affordable to a broad range
of households with varying income levels within the city as mandated by State law,
California Government Code Section 65580 and following.
B. Offset the demand for affordable housing that is created by new development and
mitigate environmental and other impacts that accompany new commercial
development by protecting the economic diversity of the City’s housing stock;
reducing traffic, transit and related air quality impacts by allowing more residents to
live near their workplace; promoting jobs/housing balance; and reducing the
demands placed on transportation infrastructure in the region.
C. Promote the City’s policy to provide an adequate number of affordable housing units
to the City’s housing stock in proportion to the existing or projected need in the
community, as identified by the Housing Element.
D. Support the Housing Element goal of assisting in the development of new housing
that is affordable at all income levels and the policies and actions that support this
goal.
E. Encourage the production of the very low, low, and moderate income units planned
for in the Housing Element of the General Plan.
4.60.020 - Definitions
For the purposes of this Chapter, the following words and phrases shall have the
meaning set forth below.
A. “Administrator” means Below Market Rate Program Administrator which may either
be the City itself or a third party administrator acting as an agent for the City in
connection with all aspects of the operation of the City's Below Market Rate program
pursuant to an Agreement entered into between the City and the Administrator, as
such agreement may be amended or replaced from time to time.
B. “Affordable housing agreement” means a written agreement between a builder and
the City as provided by Section 17.138.080.B.
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C. “Below Market Rate (BMR)” means that the affordability level of an inclusionary unit
is below the cost of what a current market rate unit would be and is affordable to
extremely low-, very low-, low-, or moderate-income households.
D. “Commercial development project” shall mean development projects which result in
the subdivision of land and/or the construction or conversion of structures for the
purpose of conducting business, including but not limited to hotels, retail sales,
restaurants, offices, gas stations, research and development uses and
manufacturing.
E. “Commercial linkage fee” means the fee paid by applicant of commercial
development projects to mitigate the impacts that such developments have on the
demand for affordable housing in the City.
F. “First approval” means the first discretionary approval to occur with respect to a
commercial development project or, for commercial projects not requiring a
discretionary approval, the issuance of a building permit.
G. “Inclusionary housing plan” means a plan for a residential development project
submitted by an applicant as provided by Section 17.138.070.
H. “Planning permit” means any discretionary approval of a residential or mixed use
project, including but not limited to a comprehensive or specific plan adoption or
amendment, rezoning, tentative map, parcel map, conditional use permit, variances,
or architectural review.
4.60.030 – Fees to be Set by Resolution
The amount of commercial linkage fee imposed on applicants of commercial development
projects shall be determined by resolution adopted by the City Council and may be
adjusted annually by the percentage change in the Consumer Price Index for all Urban
Consumers (CPI-U) Los Angeles area. Commercial linkage fees shall not exceed the cost
of mitigating the impact of the commercial development projects on the availability of
affordable housing in the city.
4.60.040 – Payment of Fees
A. A commercial linkage shall be applied to commercial development projects involving
new construction and additional gross square footage to existing commercial
buildings. If a development is exempt from the fee at initial construction, but later
converts to a commercial development project, the converted square footage will be
subject to the fee.
B. Any commercial linkage fee shall be paid in full prior to the issuance of the first
building permit for the commercial development project subject to the fee or at a time
otherwise specified by Council Resolution. If no building permit is required, the fee
shall be paid before a conversion of use may take place. The fee shall be calculated
based on the fee schedule in effect at the time the building permit is issued as
adopted by the City Council.
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4.60.050 – Exemptions
A. The following commercial projects are exempt from the provisions of this chapter.
1. City buildings and facilities and those public facilities entitled to an exemption
under state law.
2. Schools, places of public assembly, cultural institutions, childcare facilities,
nursing homes, residential care facilities, and skilled nursing facilities.
3. Projects which replace or restore a structure damaged or destroyed by fire, flood,
earthquake, or other disaster within three years prior to the application for the new
structure(s) (see Chapter 17.92 Nonconforming Structure).
4.60.060 – Disposition and Use of Fees
Commercial linkage fees collected shall be deposited into the Affordable Housing Fund.
The fund shall be administered by the Finance Director and shall be used exclusively to
provide funding for the provision of affordable housing and for reasonable costs
associated with the development of affordable housing, at the discretion of the Council.
4.60.070 – Enforcement
A. Payment of the commercial linkage fee is the obligation of the builder of a commercial
development project. The City may institute any appropriate legal actions or
proceedings necessary to ensure compliance herewith, including, but not limited to,
actions to revoke, deny, or suspend any permit or development approval.
B. The City Attorney and Community Development Director shall be authorized to
enforce the provisions of this chapter and all affordable housing agreements,
regulatory agreements, by civil action and any other proceeding or method permitted
by law.
C. Failure of any official or agency to fulfill the requirements of this chapter shall not
excuse any builder or owner from the requirements of this chapter. No permit,
license, map, or other approval or entitlement for a commercial development project
shall be issued, including without limitation a final inspection or certificate of
occupancy, until all applicable requirements of this chapter have been satisfied.
D. The remedies provided for in this chapter shall be cumulative and not exclusive and
shall not preclude the City from any other remedy or relieve to which it otherwise
would be entitled under law or equity.
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SECTION 4. A summary of this ordinance, together with the names of Council
members voting for and against, shall be published at least five (5) days prior to its final
passage, in The New Times, a newspaper published and circulated in this City. The
Ordinance shall be effective thirty (30) days after its final passage.
INTRODUCED on the 19th day of July 2022, AND FINALLY ADOPTED by the
Council of the City of San Luis Obispo on the 16th day of August 2022, on the following
vote:
AYES: Council Member Marx, Pease, Shoresman, and Vice Mayor
Christianson
NOES: Mayor Stewart
ABSENT: None
__________________________
Mayor Erica A. Stewart
ATTEST:
_________________________
Teresa Purrington,
City Clerk
APPROVED AS TO FORM:
__________________________
J. Christine Dietrick,
City Attorney
IN WITNESS WHEREOF, I have hereunto set my hand and affixed the official seal of the
City of San Luis Obispo, California, on ______________________.
__________________________
Teresa Purrington,
City Clerk
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8/19/2022 | 8:51 AM PDT