HomeMy WebLinkAbout05/02/1995, 3 - DEVELOPMENT FEE WAIVER FOR AFFORDABLE HOUSING MEETING DATE:
4111111 RV city of San LUIS OBispo - -�<
COUNCIL AGENDA REPORTITEM NUMBER:
FROM: Arnold Jon Community Development Director; By: Jeff H ssociate Planner
v
SUBJECT: Development Fee Waiver for Affordable Housing.
CAO RECOMMENDATION: Adopt resolution amending development review fees for
affordable housing projects.
SITUATION
In 1991, the City Council adopted Resolution No. 7030 establishing development review fees
for Planning, Building, and Engineering services. Built into the resolution is a provision that
adjusts the fees annually on November 1st, based on changes in the Consumer Price Index for
the Los Angeles - Long Beach - Anaheim area. The resolution also includes a fee exemption
for "any project owned or actively managed by the San Luis Obispo City Housing Authority."
In September 1994 the City Council adopted the Housing Element update, which included
several new programs to expand the supply of affordable housing. Program 1.22.15 calls for
the City to "amend its regulations to exempt certain affordable housing projects from the
payment of development review, construction permit, sewer and water hook-up fees." The
intent of this provision was: 1) to provide an incentive to develop housing which is affordable
to low- and moderate-income households; and 2) to reduce the development costs of affordable
housing projects for both public and private housing builders.
The following report and draft resolution were prepared to implement this new housing element
program. Implementation requires that the City Council amend Resolution No. 7030 to waive
certain development fees for projects which meet the City's housing affordability standards.
DISCUSSION
The proposed fee waiver program implements specific Council direction. It is one of several
new housing programs intended to strongly promote affordable housing and address State
Housing and Community Development Department (HCD) concerns with affordable housing in
San Luis Obispo. Fee waivers for affordable housing developments can significantly improve
their financial viability, making it more feasible to market new housing at prices affordable to
low- or moderate-income households.
Under existing policies, projects "owned or actively managed by the San Luis Obispo City
Housing Authority" are already exempt from development review fees. This adopted Housing
Element program extends the waiver to non-profit housing agencies and other public and private,
for-profit entities that guaranteed permanent affordability for the units for which fees were being
waived.
Staff has interpreted the Council reference to waiving "sewer and water hook-up fees" to mean
the direct costs to connect new development to City sewer or water, eg. fees to install a City
water meter or connect to a public sewer main (Municipal Code Sections 4.20.010 -.050, and
nl��IlpN �III�N city o� san 'l is ompo
COUNCAGENDA REPdRT
Staff Report
Page 2
Sections 13.08.010 - .020, respectively). "Water and wastewater development impact fees" as
defined in Municipal Code Section 4.20.140, are not proposed to be included in the fee waiver
program.
In 1991, the City raised planning, building and engineering fees for new development. These
fees were last revised in 1983, and have generally been less than the fees charged in other cities
of comparable size and development activity. Development fees are adjusted annually to reflect
changes in the Consumer Price Index. Most development review and permit fees assume full
cost recovery to deliver City services. By waiving development review fees for certain types
of housing, the City is, in essence, contributing the cost of certain services in consideration of
the public benefits derived from affordable housing.
Development review and permit fees are a significant cost item in developing housing. Below
are development fees from two actual projects:
A. Planning, Engineering and permit fees paid for a 6-unit residential project, valued at
$362,700, in San Luis Obispo City in February 1995 were as follows (fees to be waived
for affordable housing in italics):
Environmental Review $ 526
Architectural Review Commission review 663
Construction permits 3,628
Building Plan check fees 2,254
Winer meter hookup 522
Water impact fee 289398
Wastewater impact fee 119250
Traffic impact fee (effective 6/5/95) 6,570
Subtotal, City fees 539811
School fees 9,000
Total $629811
Fee Waiver for affordable housing [7,593]
Total fees after waiver $559218
In this example, City fees total about 15 percent of the apartment building's value, adding about
$8,970 in City fees to the cost of each new apartment. State-mandated school fees add another
$1,500 per dwelling unit. The proposed fee waiver program would reduce total City fees in this
example by about $1,300 per unit, down from about $10,500 per unit to $9,200 per unit, a 12
-3-
�
1111 iagIlIpwil �l city or Sar, US Obispo
UNCIL AGENDA REPORT
Page
percent fee reduction.
B. Fees for a single-family house with garage in San Luis Obispo City, valued at$131,625,
in February 1995 (fees to be waived for affordable housing in italics):
EhWronmental Review $ 00 (not applicable)
Architectural Review Commission review 00 (not applicable)
Construction permits 1,626
Building Plan check fees 1,072
Water meter hookup 307
Water impact fee 5 916
Wastewater impact fee 2344
Traffic impact fee (effective 6/5/95) 1,234
Subtotal, City fees 12,499
School fees 2,700
Total $15,199
Fee waiver for affordable housing [3,005]
Total fees after waiver $129194
City fees represent about 9 percent of the new house's value. State-mandated school fees add
another $2,700 to the total fees paid. The proposed fee waiver program would reduce fees by
about $3,000, a reduction in total City fees of about 20 percent. To give some perspective on
the significance of the reduction, $3,000 represents about two percent of the cost of a median
priced home in San Luis Obispo ($188,100).
Only those projects, or units within a development project, which met City affordability
standards would qualify for the proposed fee waivers. "Affordability" is defined in the City's
Housing Element:
"Affordable housing is housing that is affordable both initially and in the long term to a
household with a particular income level. Income levels are defined as follows:
Very low: 50% or less of median household income.
Low: 51% to 80% of median household income.
Moderate: 81% to 120% of median household income.
Above moderate: 121% or more of median household*income (not eligible for fee waiver).
i
3- 3
city or San ' �S OBIspo
COUNCLAGENDA REART
Staff Report
Page 4
The index of affordability shall be whether the monthly cost of housing fits within the following
limits:
■ For very low and low income households, not more than 25% of monthly income.
■ For moderate income households, not more than 30% of monthly income.
■ For above moderate income households, no index.
These indices may be modified or expanded if the State of California modifies or expands its
definition of affordability for these income groups. Under current standards, the minimum term
of affordability is 30 years. The Housing Element calls for the affordability term to be increased
to "as long as legally possible, but no less than 50 years." The Community Development
Director would determine whether a project met the City's affordable housing standards, based
on a project's description and plans. Affordability provisions would then be "locked in" through
a recorded "right of first refusal", sale restrictions, or other similar legal mechanisms, and
would apply only to housing which remained affordable to very-low, low-and moderate-income
households.
FISCAL EMPACT
The Housing Element program calls for the waiver of"development review, construction permit,
sewer and water hook-up fees." It does not address the recently adopted water and wastewater
impact fees; nor does it address the traffic impact fees to become effective on June 5, 1995.
These fees would still be required of new development under current policies. To the extent that
the waived fees cover the actual costs of providing municipal services, the fee waiver will
require that General Fund revenues be used to make up the difference.
The City's Housing Element sets an annual production target of 40 affordable dwellings.
Assuming this rate of production were actually achieved, and a 60/40 split in production of
multi-family and single-family units, the program could cost the City about $79,000 annually
in waived development review and permit fees based on the typical examples cited above.
The City has not, however, achieved this rate of affordable housing production in recent history.
During the sustained residential growth period from 1983 to 1993, an average of 14 affordable
housing units were built annually. Assuming the actual rate of affordable housing production
is closer to 20 units per year, a more reasonable estimate of annual program costs is $39,500.
City costs could be mitigated somewhat by streamlined development review of affordable
housing projects, and through the use of a planned "in-lieu housing fund" to cover actual staffing
costs (plancheck fees, wages, materials, etc.). The fund would generate funds over time from
developer fees paid "in-lieu" of building affordable housing, as required by the City's new
Inclusionary Housing Requirement in the Housing Element. The fund could also be used to pay
impact fees for affordable housing projects, and is expected to be established in 1995. It is
City Of San IS OBISPO
COUNCIL AGENDA REPORT
Staff Report
Page 5
unlikely, at least for an initial period, that the fund could defray costs of the fee waiver
pmt►•
ALTERNATIVES
1. Do not amend development fees. With this approach, Housing Authority projects
would continue to be exempt from most development fees (not including impact fees);
however other public agencies, non-profit or for-profit housing developers would
continue to.pay development fees. The Housing Element would need to be amended to
reflect this program change.
2. Amend development fees to allow case-by-case fee waivers. With this approach,
Housing Authority projects would continue to be exempt from most development fees.
Other public or private housing developers would need to request fee waivers from the
City Council on a case-by-case basis.
Attachments:
-Draft Resolution
-Resolution No. 7030 (1991 Series)
-Planning Services Fee Schedule
AluftwLryt
3-�
RESOLUTION NO. (1995 SERIES)
A RESOLUTION OF THE COUNCIL OF THE CITY OF SAN LUIS OBISPO
WAIVING DEVELOPMENT REVIEW AND METER INSTALLATION FEES FOR
AFFORDABLE HOUSING PROJECTS.
WHEREAS, the City's General Plan policies encourage the production of housing which
meets the needs of very-low, low, and moderate income households; and
WHEREAS, Program 1.22.15 of the Housing Element provides that the City will amend
its regulations to reduce development review and permit costs for certain affordable housing
projects in order to increase their financial feasibility and reduce actual sales costs to affordable
levels; and
WHEREAS, the City has established development review fees for Planning, Building
and Safety, and Engineering Services pursuant to State and local laws; and such fees add to the
cost to develop housing, thereby reducing the economic feasibility of developing affordable
housing; and
WHEREAS, the Director of Community Development has determined that the proposed
amendment is exempt from the provisions of the California Environmental Quality Act (CEQA)
under Section 15273 of the State CEQA Guidelines as the purpose of the amendment is to
modify charges which are for the purpose of meeting municipal expenses;
NOW THEREFORE BE IT RESOLVED by the Council of the City of San Luis
Obispo as follows:
SECTION 1. Fee Exemptions. Residential development projects which meet the City's
affordability standards for very-low, low, and moderate income households, and for which
provisions have been made to ensure that they will continue to meet affordability standards for
the life of the housing to the satisfaction of the Community Development Director, shall be
exempt from all planning, building, engineering and any other similar development review fees
as well as any water meter or sewer installation fees. Impact fees for funding capital facility
improvements necessary to serve the project shall not be included in this blanket exemption.
Whenever a project includes a combination of affordable and market rate housing units, fees
shall be pro-rated appropriately as determined by the Community Development Director.
SECTION 2. Administration. The Director of Community Development shall administer the
affordable housing fee waiver program.
SECTION 3. Notice and Publication. The City Clerk shall publish a summary of the
amendment in a newspaper of local circulation.
SECTION 4. Environmental Determination. The City Council has determined that the
proposed fee waiver program is categorically exempt from the California Environmental Quality
3- tc
Act and the City's.Environmental Guidelines.
Council Resolution No. (1995 Series)
Page 2
On motion of , seconded by _______ and on the
following roll call vote: ---- --- --- --- -
AM. _
NOES:
ABSENT:'
the foregoing Resolution was " -"
passed. and adopted this 2nd day-of lViay, 1995.
Mayor Allen Settle
ATTEST: -
Diane GladweU, City Clerk
APMOVEDS
--- ----- --
jlfLfc*!; .
RESOLUTION NO. 7030 (1991 Series)
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SAN LUIS OBISPO
ADOPTING DEVELOPMENT REVIEW FEES FOR PLANNING,
BUILDING & SAFETY, AND ENGINEERING SERVICES
WHEREAS, the City of San Luis Obispo's Municipal Code authorizes the
establishment of various fees for delivery of municipal services; and
WHEREAS, the cost of providing planning, building & safety, and engineering
services have been comprehensively reviewed by Vertex Cost Systems in 1988; and
WHEREAS, the proposed fees for development review services are consistent with
the User Fee Cost Recovery Policy adopted by the City Council in the 1991-93 Financial
Plan; and
WHEREAS, the Director of Community Development has determined that the
adoption of the proposed development review fees is exempt from the provisions of the
California Environmental Quality Act (CEQA) under Section 15273 of the State CEQA
Guidelines as the purpose of these charges is to meet operating expenses; and
WHEREAS, the City Council held a noticed public hearing concerning these fee
adjustments on September 17, 1991.
NOW, THEREFORE, BE IT RESOLVED, that:
SECTION 1. The City Council of the City of San Luis Obispo hereby establishes
development review fee schedules for Planning,Building& Safety,and Engineering services,
as provided in Exhibits A, B, and C attached hereto to be effective November 16, 1991.
SECTION 2. Any project owned or actively managed by the San Luis Obispo
Housing Authority shall be exempt from all development review fees.
SECTION 3. Consistent with current cost recovery policies, all development review
fees shall be reviewed and updated on an ongoing basis. Accordingly, any flat fees in
Exhibits A, B, and C should be adjusted annually on November 1st of each year by changes
in the Consumer Price Index [all Urban Consumers (CPI-U) for the Los Angeles - Long
Beach - Anaheim area] for the most recent period that this information is available prior
to November 1st; and a comprehensive analysis of development review fees similar to that
prepared by Vertex Cost Systems in 1988 shall be made at least every two years.
SECTION 4. To ensure cost recovery for services not specifically referenced jn
Exhibits A, B, and C for supplemental or additional services as may be required, charges
R-7030
Resolution No. 7030 (1 Series)
Page Two
shall be based on actual labor, material, equipment, and indirect costs. In determining
labor costs, hourly billing rates shall be established by the Director of Finance which
appropriately reflect salary, benefit, and overhead costs. In determining equipment usage
costs, the equipment rental schedule developed by the California Department of
Transportation (CALTRANS) or similar authoritative source for equipment costs shall be
used. For services provided by the City through private contract not specifically referenced
in this document, the contract price plus 10% for City contract administration shall be used
in establishing the service charge.
SECTION 5. If any charge set forth in this resolution or the application thereof to
any person or circumstance is held to be invalid, such invalidity shall not affect any other
charge or application thereof, and to this end the charges established in this Resolution are
declared to be severable.
SECTION 6. Refunds of any portion of fees for withdrawn or partially completed
projects shall be determined by the Director of Community Development, Building Official,
City Engineer, or Director of Public Works based on code requirements and/or their
appraisal of the cost of staff work performed.
SECTION 7. Effective November 16, 1991, Resolutions No. 5009 (1983 Series), No.
5908 (1986 Series), No. 5953 (1986 Series), and No. 6486 (1988 Series) are hereby rescinded
along with all other fee schedules in conflict herewith.
Upon motion of rrmncilman Realman, seconded by councilwoman Rappaand on the
following roll call vote:
AYES: Councilmembers Roalman, Rappa and Pinard
NOES: Councilmember Reiss and Mayor Dunin
ABSENT: None
the foregoing resolution was adopted this 17th day of September , 1991.
ayor Ron Dunin
AM-
PamJVoges, City rk
3 -5
Resolution No. 7030 1 Series)
Page Three
APPROVED:
City dmmistrative fficer
ty orn
Di of Public Works
Director of Com u 'ty Development
Director of Finance
3 -�a
PLANNING SERVICES FEE SCHEDULE
The following fees and charges for planning services were approved by City Council Resolution o
September 17, 1991, and are adjusted annually each November 1st to reflect changes in the
Consumer Price Index.
ZONING SERVICES OTHER PLANNING SERVICES
Sidewalk Sales Permit . . . . . . . . . . . . . $ 54.00 Environmental Impact Determination S 533.00
Home Occupation Permit $ 54.00 Environmental Impact Report
School Tenant Permit . . . . . . . . . . . . . $ 106.00 Consultant Contract plus 30% for
Administrative Use Permit . . . . . . . . . . $ 213.00 administrative & review services
Planning Commission Use Permit . . . . . $ 693.00 Sign Permits
City Council Use Permit . . . . . . . . . . . $ 693.00 Free Standing . . . . . . . . . . . . . . $ 74.00
Downtown Housing Conversion Permit . $ 672.00 All Others . . . . . . . . . . . . . . . . . $ 54.00
Variance . . . . . . . . . . . . . . . . . . . . . . $ 831.00 Architectural Review
Planned Development Permit Signs . . . . . . . . . . . . . . . . . . . $ 160.00
Preliminary . . . . . . . . . . . . . . . $1,600.00 Development Projects . . . . . . . . $ 672.00
Precise . . . . . . . . . . . . . . . . . . $ 854.00 Minor-Incidental . . . . . . . . . . . . $ 193.00
Precise Plan Amendment 50% of Filing Fee Street Name Change . . . . . . . . . . . . . $ 565.00
Rezoning Street Abandonment . . . . . . . . . . . . . $ 672.00
Map Amendment . . . . . . . . . . . $1,098.00 Condominium Conversion . . . . . . . . . . $ 885.00
Text Amendment . . . . . . . . . . . $ 746.00 Applicant-Requested Continuation . . . . $ 128.00
Time Extension . . . . . . . . . . . . . . . . . $ 128.00 Time Extension . . . . . . . . . . . . . . . . . $ 128.00
Plan Revisions . . . . . . . . . . . . . 50% of Filing Fee
Special Research . . . . . . . . . . . . . . . Actual Co
Appeals . . . . . . . . . . . . . . . . . . . . . . No Charge
GENERAL & SPECIFIC PLANS
SUBDIVISION SERVICES
Specific Plan
Initial Study Fee . . . . . . . . . . . . $1,067.00 Lot Line Adjustment . . . . . . . . . . .. . . . $ 319.00
Initial Plan Review . . . . . . . . . . fixed fee Lot Combination . . . . . . . . . . . . . . . . $ 319.00
per written agreement with applicant Minor Land Division . . . . . . . . . . . . . . $ 640.00
Amendment . . . . . . . . . . . . . . . . fixed fee Parcel Map (4 or less lots) . . . . . . . . . . $1,632.00
per written agreement with applicant Tract Map (5 or more lots) . . . . . . . . . $1,632.00
+ $54/Lot
General Plan Amendment Certificate of Compliance or
Map (includes rezoning) . . . . . . $1,205.00 Lot Line Adjustment Agreement
Text . . . . . . . . . . . . . . . . . . . . . $ 746.00 1 to 9 Parcels . . . . . . . . . . . . . $ 267.00
i
10 or more Parcels . . . . . . . . . . $ 319.00
Final Parcel Map . . . . . . . . . . . . . . . . $ 799.00
ANNEXATIONS
Final Map Time Extensions
I• Annexation . . . . . . . . . . . . . . . . . . . . $1,067.00 50% of current tentative map filing fee
+ $106/Acre over 5 Acres
t
� zo.w
i
city of san Luis osispo 3 -//
-- III LLI11%U nULlQ UJI`/
DATe ITEM # C•0'MN•-�
��iilllllllllllllllllllllll����� �IIlllllll IIIA
MEMORANI CAI Of SAD I ills
POLICE DEPARTMENT
&nPcH&":PL%j328 • San Luis Obispo, CA 93406-1328 • (805) 7817317
5
FROM: Rick Crocker, DARE Officer`s
DATE: May 1, 1995
SUBJECT: Junior Giants Commissioner's Meeting
As I am sure you are aware, the Junior Giants Youth Baseball
Program targets at-risk youth within the community and provides an
opportunity for free, supervised recreation during the summer.
More important, the coaches (police officers, recreation staff, and
volunteers) are responsible for teaching the participants the "Six
Pillars of Character. " This is what sets this program apart from
the others.
The Commissioner's Meeting, in which the "Six Pillars of Character"
are explained in detail, will take place at Candlestick Park in San
Francisco on Saturday, May >1U3 1995. Following the morning
meeting, we will attend the gamelfeaturing the Giants and the
Chicago Cubs. AME 2ojieR6e_T7an)
A total of five representatives from our community will accompany
me to Candlestick Park on the 1115th. /1 I would like to extend an
invitation to a selected Council or Staff member to attend the
meeting and learn what "Junior Giants" is all about. Since I have
reserved the one remaining game ticket for this purpose, I am
hopeful that a Council representative can attend. We will depart
in the City Van at 5: 30 am on Saturday, May 15, and return at
approximately 9 : 30 pm the same day.
I spoke with Mayor Settle this morning and he asked that you bring
this topic forward during the "Oral Communications" portion of
tomorrows Council meeting. Call me with any questions at X334 .
�COUNCIL ❑ CDD DIR
I l'CAO ❑ FIN DIR
Pf ACAO ❑ FIRE CHIEF
:TTORNEY ❑ PW DIR
CLERK/ORIG POLICE CHF
O MGMT TEAM ❑ RECDIR (RECEIVED
❑ C READ FILE ❑ UTIL DIR �+ V
�'.ra' ❑ PERS DIR MAY 1 1995
s�
�NCI17 COUNCIL'
nglcao. CA
"Service, Pride, Integrity"
(� The City of San Luis Obispo is committed to include the disabled in all of its services, programs and activities.
�/ Telecommunications Device for the Deaf (805) 781-7410
111L1.1111V nuL1YNA
DATC £ 1 . ITEM #
�������►illill 111111111111111 p���►i��►��
MEMORANC1 O[ SAWL11SOBIS00 -
POLICE DEPARTMENT
enPcH&"fLw1j328 • San Luis Obispo, CA 93406-1328 • (805).781-7317
FROM: Rick Crocker, DARE OfficerQ�J
DATE: May 1, 1995
SUBJECT: Junior Giants Commissioner's Meeting
As I am sure you are aware, the Junior Giants Youth Baseball
Program targets at-risk youth within the community and provides an
opportunity for free, supervised recreation during the summer.
More important, the coaches (police officers, recreation staff, and
volunteers) are responsible for teaching the participants the "Six
Pillars of Character. " This is what sets this program apart from
the others.
The Commissioner's Meeting, in which the "Six Pillars of Character"
are explained in detail, will take place at Candlestick Park in San
Francisco on Saturday, May 15, 1995. Following the morning
meeting, we will attend the game featuring the Giants and the
Chicago Cubs.
A total of five representatives from our community will. accompany
me to Candlestick Park on the 1115th. 1' I would like to extend an
invitation to a selected Council or Staff member to attend the
meeting and learn what "Junior Giants" is all about. Since I have
reserved the one remaining game ticket for this purpose, I am
hopeful that a Council representative can attend. We will depart
in the City Van at 5:30 am on Saturday, May 15, and return at
approximately 9: 30 pm the same day.
I spoke with Mayor Settle this morning and he asked that you bring
this topic forward during the "Oral Communications" portion of
tomorrows Council meeting. Call me with any questions at X334.
FACAO
❑ CDD DIR
❑ FIN DIR
Er ❑ FIRE CHIEF
O PW DIRG POLICE CHFM ❑ REC DIR �E�+E� y 'rE ❑ UTIL DIR G M
� ❑ PERS DIR MAY 1 1995
CITY COUNCIL'
SAN 1 Ilia ng1Rpo Cg
"Service, Pride, Integrity"
!� The City of San Luis Obispo is committed to include the disabled in all of its services, programs and activities.
v Telecommunications Device for the Deaf (805) 781-7410