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HomeMy WebLinkAbout12/04/2001, BUS 5 - CRITERIA FOR AWARDING AFFORDABLE HOUSING FUNDS. I council ".°°"Dft Iz 4 o l j acEnaa Repout 1®N.,b. a� s CITY O F SAN LUIS OBISPO FROM: John Mandeville, Community De elopment Director Prepared By: Jeff Hook, Associate Plann SUBJECT: CRITERIA FOR AWARDING AFFORDABLE HOUSING FUNDS. CAO RECOMMENDATION Adopt a resolution establishing a review process and "award criteria" in allocating Affordable Housing Funds, and authorizing the CAO to execute funding agreements. DISCUSSION Background The Affordable Housing Fund (AHF) was established in March 1999 to implement the Inclusionary Housing Program. It does this by providing a fund for the collection of in-lieu fees, and for the disbursement of those funds for affordable housing projects citywide. Ordinance 1438 which established the fund describes it as a "fund established and administered by the City, containing in-lieu fees and other funds held and used exclusively to increase and improve the supply of affordable housing." The ordinance also says the fund shall be administered by the Finance Director and is allocated "at the discretion of the City Council." The fund's potential uses, award procedures and criteria are not spelled out in the ordinance -- these were left open- ended to give Council the widest possible flexibility in using the fund to increase or improve affordable housing. The City recently received its first requests for use of the Fund. Judson Terrace Lodge has requested $215,000 to help construct a 32-unit apartment project for frail, low-income elderly persons, and Sojourn Services, Inc. requested $25,000 to help build a one-bedroom apartment on property it owns at 542 Hathway Street in San Luis Obispo. These requests are being referred to Council for consideration of possible funding. To help Council members, staff prepared possible funding criteria and a review process to evaluate these and future requests. Status of Affordable Housing Fund The current cash balance in the Affordable Housing Fund is $395,053. The total inclusionary housing fee revenue for the fiscal year ended June 30, 2001 was $193,700 or an average of $16,100 per month. This includes two large payments of $35,000 each that will distort the "average" revenue. However for the first 4 months of the current fiscal year, revenues total $115,389 or an "average" of $28,800 per month. Again, some large payments tend to distort a true average. In a revenue stream of this nature it is difficult to project what average collections might be in the future. Since the fund revenue is largely development-driven (particularly commercial development), its growth is closely related to new development and difficult to predict with any degree of certainty. BUS 5-1 Affordable Housing Fund Award Criteria Page 2 Use of Affordable Housing Funds Affordable housing funds, or "housing trust funds", are becoming relatively common in cities throughout California and the U.S. In its broadest sense, an affordable housing fund is a dedicated and typically, renewable source of revenue available to help low and moderate income people secure affordable housing. These funds provide financial assistance of various kinds — from production of new units to loan guarantees for homebuyers. Typically, these funds can "fill the gap" caused by shortfalls in state or federal funding and California's high housing costs. San Luis Obispo City's Affordable Housing Fund., the first such fund established in San Luis Obispo County, is unfettered by the "strings" associated with state and federal funding, making it exceptionally flexible and valuable for meeting local housing needs. Since the Fund can be meted out at Council's sole discretion, the process is simple, direct, and efficient, without the long lead times associated with multi-agency grant programs. Council can use the funds any way it deems appropriate to promote affordable housing. Because the funds have been collected "in-lieu" from developers who chose to pay a fee instead of actually building affordable housing, it's essential that Council allocates funds in a way that maximizes public benefits while considering both housing needs and opportunities. Moreover, Council funding decisions must be guided by consistency, fairness, and reasonableness. To assist Council with that effort, staff suggests Council consider the following criteria when deciding whether to allocate the Affordable Housing Fund. 1. Eligibility. Use of the Affordable Housing Fund will increase or improve affordable housing and promote General Plan policies regarding housing and related community goals. 2. Suitability. The project to be assisted is appropriate for its location, both in terms of land use and design. 3. Urgency. There exists an urgent or overarching need for the type of housing to be assisted. 4. Financial Effectiveness. But for the requested assistance, the project would not be economically feasible; or AHF funding "leverages" significant additional funding from other sources. 5. Readiness. The project has all necessary City approvals and is ready to proceed. A funding request may not meet all of these criteria, or may only partially meet one or more criteria. This is, by nature, a subjective process in which the criteria provide a way to compare requests against City housing objectives and other practical considerations. Requests that meet most or all of these criteria are more likely to maximize public benefit and therefore, merit City support. Even if a request appears to meet these criteria, Council may still opt not to fund a particular request or to fund only a portion of the request. Council may instead choose to "save up" in-lieu fees to wield a greater funding effect on a single large, future housing development or to offer a significant incentive to encourage a specific type of affordable housing. BUS 5-2 Affordable Housing Fund Award Criteria Page 3 Review Process Timing. Judson Terrace Lodge and Sojourn Services, with the first AHF funding requests, have an advantage by being "first in line" for use of the fund. However, funding decisions should obviously not be made solely on a first-come, first-served basis. Staff recommends that as part of its action approving award criteria, Council also approve a review process for future requests. AHF funding requests should typically be considered by Council once a year, following public notice. This will allow time to publicize availability of the fund and to advise prospective applicants on how to apply. Urgent grant funding requests may not, however, be able to wait for regular funding cycles. The Community Development Director should have the authority to bring such requests to Council outside the usual funding cycle where time-sensitive action is appropriate. The Community Development Department will be responsible for public notice and processing fund requests. Relationship To Other Grant Funding. Most requests for affordable housing funds will also be tied in with other grant funds, such as Community Development Block Grant (CDBG), HOME Investment Partnership Funds (HOME), or other state and federal funding. Staff recommends that AHF requests be submitted concurrently with City CDBG applications, allowing both the Human Relations Commission and the Council to view an applicant's total funding needs before acting on either request. Assuring Affordability. To ensure funds are used for the intended purpose, applicants receiving AHF funds will be required to execute a funding agreement with the City, describing the purpose and terms of funding. The project or program to be funded should meet the City's Affordable Housing Standards, including the requirement for an affordability term of at least thirty (30) years, and City equity participation in the project where feasible and appropriate. Maintaining Flexibility. While there is clearly a need for a consistent and fair evaluation process, staff recommends Council retain maximum flexibility in use of the fund to address urgent or unexpected housing opportunities and avoid an unnecessarily burdensome application or award process. A simple letter application, explaining the purpose of the request, amount requested, agency or individual's ability to cant' out the project, other funding sources and any other pertinent information will be required. Countywide Affordable Housing Trust Fund. A group of local housing agencies and advocates has been working for some time to create a countywide affordable housing trust fund. Each city and the unincorporated County will be asked to commit annual funding to the larger, countywide fund to be administered by a governing board composed of contributing jurisdictions and the San Luis Obispo Affordable Housing Consortium. It is still too early to tell what part, if any, the cities and County will play in that effort and whether the City's Affordable Housing Fund will have a role. In the meantime, staff believes it is desirable to establish evaluation criteria to implement the City's fund as originally envisioned. BUS 5-3 Affordable Housing Fund Award Criteria Page 4 ATTACHMENTS 1. Draft Council Resolution 2. Excerpt From Ordinance No. 1348 (1999 Series)—Inclusionary Housing Program Jh/Uhousinglaffordablehousingfundccreport 12-4-01 BUS 5-4 RESOLUTION NO. (2001 Series) Attachment 1 A RESOLUTION OF THE COUNCIL OF THE CITY OF SAN LUIS OBISPO ESTABLISHING AWARD CRITERIA AND A REVIEW PROCESS FOR ALLOCATING AFFORDABLE HOUSING FUNDS. WHEREAS, the City Council adopted Ordinance 1348 (1999 Series) establishing an Affordable Housing Fund for the collection and distribution of in-lieu housing fees to promote affordable housing in San Luis Obispo; and WHEREAS, as a result of the in-lieu fee payments to the City under the Inclusionary Housing Ordinance, the City has a balance of approximately$400,000 in the Affordable Housing Fund, and this fund is available to support affordable housing in San Luis Obispo at the sole discretion of the City Council; and WHERAS, the City received requests by Judson Terrace Lodge and Sojourn Services, Inc. for the use of $215,000 and $25,000, respectively, of Affordable Housing Funds; and to evaluate these and future funding requests in a fair and timely manner, Council wishes to establish award criteria and a review process for the Affordable Housing Fund; and WHEREAS, the City Council held a meeting on December 4, 2001 to consider possible award criteria that balance the need to provide a fair, open and timely funding award process with the desire to maintain funding flexibility to address local housing needs and opportunities; BE IT RESOLVED by the Council of the City of San Luis Obispo that based on its deliberations,public comments, the staff report, and on State law, the following: SECTION 1. Affordable Housing Fund Award Criteria. The City Council establishes the following criteria for evaluating requests for use of the Affordable Housing Fund: 1. Eligibility. Use of the Affordable Housing Fund for the requested purpose will increase or improve affordable housing and promote General Plan policies regarding housing and related community goals. 2. Suitability. The project to be assisted is appropriate for its location,both in terms of land use and design. 3. Urgency. There exists an urgent or overarching need for the type of housing to be assisted. BUS 5-5 Attachment 1 Council Resolution No. (2001 Series) Page 2 4. Financial Effectiveness. But for the requested assistance, the project would not be economically feasible; or AHF funding "leverages" significant additional funding from other sources. 5. Readiness. The project has all necessary City approvals and is ready to proceed. Section 2. Use of Award Criteria. The Council will apply the above criteria when evaluating funding requests. Requests that most closely meet the criteria will be given the most favorable consideration in allocating Affordable Housing Funds. Under no circumstances is Council obligated to award Affordable Housing Funds. The decision whether to allocate funds and how much is at the sole discretion of the City Council whose decision is final. Section 3. Review Process. The Community Development Director shall be responsible for processing requests for use of Affordable Housing Funds. Such requests shall usually be considered concurrent with review of the City's Community Development Block Grant Program. The Director is authorized to bring urgent funding requests to the Council at any time, irrespective of the above review cycle. Section 4. Funding Agreements. Recipients of Affordable Housing Funds shall be required to execute an agreement with the City describing the purpose and terms of funding. The project or program to be funded shall meet the City's Affordable Housing Standards, including the requirement for an affordability term of at least thirty (30) years, and City equity participation in the project where feasible and appropriate. The City Administrative Officer is authorized to execute such agreements for the City. Upon motion of seconded by and on the following roll call vote: AYES: NOES: ABSENT: the foregoing resolution was adopted this day of 2001 Mayor Allen Settle BUS 5-6 r Council Resolution No. (2001 Series) Attachment 1 Page 3 ATTEST: Lee Price, City Clerk APPROVED AS TO FORM: Jeffrey G. Jorgensen, City Attorney Jh/Uhousing/affordablehousingfundcriteria.CCres BUS 5-7 ' ORDINANCE NO. 1348 (1999 Series) Attachment 2 AN ORDINANCE OF THE COUNCIL OF THE CITY OF SAN LUIS OBISPO IMPLEMENTING THE INCLUSIONARY HOUSING REQUIREMENT OF THE HOUSING ELEMENT AND ESTABLISHING AN AFFORDABLE HOUSING FUND WHEREAS, the General Plan identifies affordable housing as a primary community goal and seeks ways to provide housing which is affordable to very-low, low and moderate income households within existing neighborhoods and in expansion areas; WHEREAS, Land Use Element policies 2.5 and 2.13 call for new development to contribute to the conservation or production of affordable housing, and call for the City to adopt an inclusionary housing and development fee ordinance, consistent with the Housing Element; WHEREAS, the City of San Luis Obispo has adopted a Housing Element of the General Plan which documents housing needs and addresses the City's regional share housing needs for households of all income levels,pursuant to Government Code Section 65584(a); WHEREAS, based upon the needs analysis in the Housing Element, the City of San Luis Obispo has determined that there is an unmet need for housing affordable to very-low, low and moderate income households; WHEREAS, the City has established quantified housing objectives to help meet its regional share housing needs, based on its capacity to accommodate new residential development during the Element's planning period from June 1994 to June 1999; WHEREAS, the City's affordable housing production objective is 40 dwelling units per year, for a total of 200 new affordable housing units during the�lanning period; WHEREAS, the private market has not produced in the past, nor is likely to produce in the future, a sufficient number of affordable dwellings to meet City quantified housing objectives or the City's assigned regional share of lower income housing; WHEREAS, despite increased City grant funding for affordable housing, local, state and federal funding sources are limited and alone are not sufficient to enable the City to meet its affordable housing objectives; WHEREAS, new development which does not include or contribute affordable housing exacerbates the City's shortage of affordable housing by: reducing the supply of land available for residential development which could accommodate affordable housing, and by inducing additional demand for housing to serve the needs of very-low, low and moderate income employees, many of whom are employed in lower wage retail and service industries; WHEREAS, to address the City's affordable housing needs and help achieve its regional housing objectives, the Housing Element Program 1.22.10 calls for the City to amend its regulations to require that new development projects include affordable housing units or pay an in-lieu fee, as described in Table 1 of the Element; Ord. 1348 Page 1 of 11 BUS 5-8 Ordinance No. 1348 (1 091 Series) Paget ATTACHMENT 2 WHEREAS, Housing Element Program 1.22.11 calls for the City to establish a housing trust fund to be used to develop affordable housing units and acquire land for affordable housing projects, with affordable housing in-lieu fees to be collected and deposited in this fund; WHEREAS, the City conducted an economic study of the effects of affordable housing requirements on the feasibility of new development in San Luis Obispo entitled the Mundie Report,prepared in 1991 and updated in 1997; WHEREAS,the economic study concludes that while the affordable housing requirement would create an additional economic burden on private developers, implementation of the City's affordable housing requirements will not pose an unreasonable economic hardship and that the requirements will help achieve City affordable housing objectives without sacrificing economic feasibility of new development; WHEREAS, the City has adopted affordable housing incentives (SLOMC Ch. 17.90) to provide technical, financial and procedural assistance to developers of affordable housing to help offset development costs and facilitate the conservation and production of affordable housing; and WHEREAS, the City Council established a citizen task force to evaluate the proposed Inclusionary Housing Requirement, composed of persons representing various points of view in the community, and said task force reviewed and recommended changes to a draft ordinance implementing an Inclusionary Housing Requirement; and WHEREAS,Planning Commission and the City Council have held hearings to consider the proposed ordinance, and said ordinance comes to the Council with a favorable recommendation from the citizen task force and the Planning Commission; BE IT ORDAINED by the Council of the City of San Luis Obispo as follows: SECTION 1. Findings. 1. This ordinance is necessary to implement General Plan policy and programs; to help achieve City .quantified housing objectives and to protect the health, safety and welfare of its citizens. 2. This ordinance is not a "project" as defined by the California Environmental Quality Act in that it implements adopted policy and will not result in any physical change to the environment; consequently no further environmental determination is required. SECTION 2. Inclusionary Housing Requirement. The City Council hereby implements the Inclusionary Housing Requirement and establishes an Affordable Housing Fund, as specified in the attached ordinance text, Exhibit A. Ord. 1348 Page 2 of 11 BUS 5-9 Ofdinance No. 1348 (1999-Series) ATTACHMENT 2 Page 3 SECTION 3. A summary of this ordinance, approved by the City Attorney, together with the names of the Council members voting for and against it, shall be published at least five days prior to its final passage, in the Telegram-Tribune, a newspaper published and circulated in this City. This ordinance will go into effect at the expiration of thirty (30) days after its final passage. INTRODUCED AND PASSED TO PRINT by the Council of the City of San Luis Obispo at a meeting held on the sixteenth day of February, 1999, upon motion of Council member Ewan, seconded by Council member Schwartz and on the following roll call vote: AYES: Council Members Ewan, Marx, Schwartz, Vice Mayor Romero, and Mayor Settle NOES: None ABSENT: None Mayor Allen Sett ATTEST: Lee Price, City Clerk APPROVED AS TO FORM: J . J rge n, qfty Attorney Attachment: Exhibit A jha.:iod hso.ord Ord. 1348 Page 3 of 11 BUS 5-10 i 1 1 ATTACHMENT I Ordinance No. 1348 (1999 Series) FINALLY PASSED this 2th day of March, 1999, on motion of Council Member Marx, seconded by Vice Mayor Romero, and on the following roll call vote: AYES: Council Members Ewan, Marx, Schwartz, Vice Mayor Romero, and Mayor Settle NOES: None ABSENT: None Mayor Allen K. Settle AATEST: Lee Price, CMC City Clerk Ord. 134% BUS 5-11 �. ATTACHMENT Chapter 17.91 land use and housing development. INCLUSIONARY HOUSING 17.91.020 Definitions. REQUIREMENT For the purposes of this chapter, the following words and phrases shall have the Sections: meaning set forth below: 17.91.000 Title. A. "Affordable" means housing which can 17.91.010 Purpose. be purchased or rented by a household with 17.91.020 Definitions. very-low, low, or moderate income, as 17.91.030 Applicability and described in the City's Affordable Housing Exclusions. Standards (Ch. 17.20, SLOMC). 17.91.040 General standards. B. "Affordable Housing Agreement" shall 17.91.050 Procedures. mean a written agreement between the 17.91.060 In-lieu housing fee. developer, City and possibly additional 17.91.070 Affordable Housing fund. parties which specifies the terms and 17.91.080 Real Property Dedication. conditions under which affordable housing 17.91.090 Incentives. requirements are to be met. 17.91.100 Project Application. C. "Affordable Housing Fund" means a 17.91.110 Conditions of development fund established and administered by the approval. City, containing in-lieu fees and other funds 17.91.120 Program Requirements. held and used exclusively to increase and 17.91.130 Eligibility Screening. improve the supply of affordable housing. 17.91.140 Affordability Restrictions. D. "Affordable Housing Project" shall 17.91.150 Shared Equity Purchase mean a development project in which one Program. hundred percent of the dwellings to be built 17.91.151 Early Resale of Shared will be sold or rented in conformance with Equity Properties. the City's'Affordable Housing Standards. 17.91.160 Management and E. "Building valuation" shall mean the Monitoring. total value of all construction work for 17.91.170 Enforcement and Appeals. which a construction permit is required, as 17.91.180 Severability. determined by the Chief Building Official using the Uniform Building Code. 17.91.000 Title. F. "Commercial Project" means a The provisions of this chapter shall development project involving primarily be known collectively as the Inclusionary non-residential uses, including retail, Housing Requirement of the City of San office, service-commercial, light-industrial, Luis Obispo. neighborhood commercial, tourist- commercial, and manufacturing uses as 17.91.010 Purpose. further described in the zoning regulations. The purpose and intent of this G. "Density" means residential density as chapter is to promote the public welfare by defined in Section 17.16.010 of this code. increasing the production and availability of H. "Density bonus" means a density affordable housing units, and to establish an increase of at least twenty-five percent over inclusionary housing requirement which the maximum density otherwise allowable implements General Plan policies guiding unQer the zoning regulations. BUS 5-12 ATTACHMENT 2 Inclusionary Housing Requirement I. "Development project" shall mean an qualified professional. activity for which a subdivision map or Q. "Moderate income households" shall construction permit is required, including include those persons and families whose new buildings and building additions or incomes exceed eighty percent but are less remodels as described in Section than or equal to one hundred twenty percent 17.91.030, but not including changes in of the median income within the county. ownership, occupancy, management or use. (Ord. 1035 § 1 (part), 1985) J. "Director" means the Community R. "Real Property" shall mean land and Development Director or his authorized improvements, if any, including anything representative. permanently affixed to the land, such as K. "Equity Build-up" shall mean a buildings, walls, fences, and paved areas. property's sales price at first resale, less the S. "Residential Project" shall mean initial purchase price and less the City's development projects which result in the equity share as described in Section subdivision of land and/or the construction 17.91.150. or conversion of dwellings, including, but L. "Expansion Area" - A land area not limited to: single family detached proposed for annexation to the City or homes, apartments, condominiums, annexed after the adoption date of this live/work studios, mobile homes, and ordinance. group housing. M. "Inclusionary housing unit" means a T. "Very-low income" shall have the dwelling which is built under the provisions meaning set forth in California Health and of this chapter, and which meets the City's Safety Code, Section 50105; provided that Affordable Housing Standards. such income level shall not exceed 50 N. "In-lieu fee" means a fee paid to the percent of median income within the City as an alternative to the production of county. inclusionary housing, to be used in the acquisition, construction, or rehabilitation 17.91.030 Applicability and of affordable housing. Exclusions. O. "Low" or "lower income households" A..This chapter shall apply to development shall have the meaning set forth in projects consisting of five or more lots or California Health and Safety Code, Section new dwelling units, and to commercial 50079.5; provided the income of such development projects consisting of 2,500 persons and families shall not exceed eighty square feet of gross floor area or larger. percent of the median income within the B. The following types of development county. projects are excluded: P. "Market Value" shall mean the highest 1. Residential developments of 4 units or price a willing buyer would pay and a less; willing seller would accept, both being 2. New commercial developments of less fully informed and in an open market, as than 2,500 square feet gross floor area; determined by an appraiser or other 3. Residential and commercial building 2 BUS 5-13 ATTACHMENT 2 Inclusionary Housing Requirement additions, repairs or remodels, inclusionary housing requirements, as provided that such work does not specified in Table 1 of the General Plan increase the number of existing Housing Element. To meet the dwellings by four or more units; or requirements, the developer shall comply result in an increase in gross floor area with one or more of the following methods; of 2,500 square feet; 1. Construct the required number of 4. The conversion of less than five affordable dwelling units, as dwelling units to condominiums within specified in Table 1, or any five-year period. 2. Pay an in-lieu fee as described in 5. Commercial condominium conversions Table 1; or which do not result in the creation of 3. Dedicate real property for affordable new dwellings; housing; or 6. Affordable housing projects; 4. Use a combination of the above 7. Emergency projects, or projects which methods, to the approval of the City the City Council determines are Council. necessary to protect public health and B. Affordable housing standards. safety; Affordable dwelling units constructed must 8. Development projects which the City meet City Affordable Housing Standards, Council determines are essentially non- and must be consistent with affordability commercial or non-residential in nature, policies in the General Plan Housing which provide educational, social or Element. related services to the community and C. Concurrent development. The required which are proposed by public agencies; inclusionary units shall be constructed non-profit agencies, foundations and concurrently with market rate units unless other similar organizations; the developer and the City Council agree 9. Projects which replace or restore a within an Affordable Housing Agreement structure damaged or destroyed by to an alternative development schedule. fire, flood, earthquake or other disaster within three years prior to the 17.91.050 Procedures. application for the new structure(s). A. Fractional numbers. In determining the 10. Projects for which an approved number of dwellings that are required to be tentative map or vesting tentative map built pursuant to Table 1, fractional units exists, or for which a construction less than 0.50 shall be rounded down to the permit was issued prior to the effective first whole number unit, and fractional date of this ordinance and which units of 0.50 or greater shall be rounded up continue to have unexpired permits. to the next higher whole number unit, as calculated by the Director. 17.91.040 General Standards. B. Timing. The inclusionary housing A. Methods of meeting requirements. New requirement shall be met prior to issuance development projects shall satisfy the of a Certificate of Occupancy for the first 3 BUS 5-14 - ATTACHMENT 2 Inclusionary Housing Requirement unit in a building, or the first building in a to building permit issuance, for projects for complex to be constructed or remodeled; or which a certificate of occupancy is not for subdivisions, prior to final map issued; or as otherwise provided by written approval; or prior to building permit agreement between the developer and City, issuance, for projects for which a to the approval of the Director. Certificate of Occupancy is not issued; or as otherwise agreed to by the City Council 17.91.070 Affordable Housing Fund. as part of tentative map, rezoning, Affordable Housing Fund established. The conditional use permit or other City hereby establishes an Affordable development approval. Housing Fund. Said fund shall be C. Affordable housing agreement. To meet administered by the Finance Director and the requirements, the developer may enter shall be used exclusively to provide funding into an agreement with the City, the City's for the provision of affordable housing and Housing Authority, non-profit housing for reasonable costs associated with the provider, or other qualified housing development of affordable housing, at the provider.approved by the City Council to discretion of the City Council. construct; refurbish, convert, operate and A. In-lieu fees. In-lieu fees collected shall maintain the required affordable housing. be deposited into the Affordable Housing Such Affordable Housing Agreements shall Fund, to the satisfaction of the Director. be to the approval of the Director and shall be in a form approved by the City 17.91.080 Real Property Dedication Attorney. A. Irrevocable offer to dedicate real property. At the discretion of the City 17.91.060 In-lieu Housing Fee. Council, an irrevocable offer to dedicate . A. Payment of in-lieu fee. Developer may, real property equal or greater in value to at his discretion, choose to pay a fee to the the in-lieu fee which would otherwise be City in lieu of constructing affordable required may be offered to the City, or to a dwellings to meet this requirement. housing provider designated by the City, B. Amount and method of payment. The instead of providing the required number of dollar amount and method of payment of affordable dwellings or paying in-lieu fees. the in-lieu fee shall be as described in Table In considering an offer to dedicate real 1 of the General Plan Housing Element, to property, the City Council must find that the approval of the Director. the dedication of real property will provide C. T<ming. In-lieu fees shall be paid prior equal or greater public benefit than to release of occupancy of the fust dwelling constructing affordable units or paying in- within a residential development; or for lieu fees, based on the following criteria: residential subdivisions to be built out by 1. Valuation of the land and/or others, prior to final subdivision map improvements to be dedicated approval; or prior to occupancy for new relative to other methods of commercial buildings or remodels; or prior meeting the requirement; 4 BUS 5-15 AYTA CHMENT Inclusionary Housing Requirement 2. Suitability of the land and/or or other forms of financial assistance may improvements for housing, be offered by the City to the extent that including General Plan conformity, resources are available for this purpose and size, shape, topography, and to the degree that such incentives or location; and assistance will help achieve the City's 3. Feasibility of developing affordable housing goals. housing, including general plan B. Affordable Housing Agreement. Any consistency, and availability of incentives provided by the City, beyond infrastructure. those incentives to which a developer may B. Real Property valuation. The valuation be automatically entitled to under Ch. of real property offered in-lieu shall be 17.90 of this code, shall require City determined by the Director, based upon an Council approval and shall be set out in an appraisal made by a qualified appraiser Affordable Housing Agreement. The form mutually agreed to by the developer and the and content of such agreement shall be to City. Costs associated with the appraisal, the approval of the City Attorney and the title insurance and transfer, recordation and Director. Developers are further related costs shall be bome by the encouraged to utilize other local, state or developer. federal assistance, when available, to meet C Agreement and Timing. The real the affordable housing standards. property dedication shall be by deed or other instrument acceptable to the City, and 17.91.100 Project Application. shall be completed by recordation with the A. Method of application. An Recorder of the County of San Luis Obispo applicant/developer proposing a project for prior to occupancy release of the first which affordable housing is required shall residential unit or commercial building in submit a statement with the standard the development; or prior to building planning application, describing the permit issuance, for projects for which a inclusionary housing proposal. The certificate of occupancy is not issued; or as developer's statement shall include: otherwise provided by written agreement 1. A brief description of the proposal, between the developer and the City. including the method chosen to meet the inclusionary housing 17.91.090 Incentives. requirement, number, type and A. Eligibility for incentives. The developer location of affordable units, term of may be eligible to receive, or to request affordability, preliminary development incentives in return for calculation of in-lieu fees, or offer constructing affordable housing in of land dedication; connection with a development project, 2. How the proposal meets General pursuant to the Affordable Housing Plan policies and inclusionary Incentives (SLOMC Chapter 17.90), as part housing requirements; of a City planning application. Incentives 3. Plans and other exhibits showing 5 BUS 5-16 ATTACHME .T 2 Programs 1.22.10 The City shall require that new development projects include affordable housing units, dedicate land for affordable housing, or pay an in-lieu fee to assist in the development of affordable housing Citywide, as described in Table 1, below: Table 1 Affordable Housft R uirements' Type of Development Project {`tea • r• Residential Commercial Build 3% low or 5% Build 1 ADU per acre, but moderate cost Affordable not less than 1 ADU per Dwelling Units (ADUs'), project; but not less than 1 ADU per In City project; or Location or pay in-lieu fee equal to 2% pay in-lieu fee equal to 5 of building valuation. of buildin valuation.' Build 5% low- and 10% Build 1 ADU per acre, but moderate-cost ADUs, but not less than 1 ADU per not less than 1 ADU per project; In project; Expansion or Area or pay in-lieu fee equal to 2% pay in-lieu fee equal to 10% of building valuation. of building valuation. 'Developer may build affordable housing in the required amounts, pay an in-lieu fee or dedicate land (real property) based on the above formula. 'Affordable Dwelling Units must meet City affordability criteria listed in Goal 1.22. '"Building Value" shall mean the total value of all construction work for which a permit would be issued, as determined by the Chief Building Official using the Uniform Building Code. 14 BUS 5-17 1 / MEETING AGENDA_ November 30, 2001 DATE 12-4-01 ITEM # 805 MEMORANDUM - TO: Council Members FROM: Council Member Schwartz- SUBJECT: Proposed Changes to Criteria for Awarding Affordable Housing Funds Item No.Bus.5 on the December 4, 2001 Agenda I would like to propose small modifications to the resolution for Business Item No. 5.— Criteria for Awarding Affordable Housing Funds. Specifically,I propose changes on pages BUS 5-5 and BUS 5-6 as follows: BE IT RESOLVED by the Council of the City of San Luis Obispo that based on its deliberations,public comments,the staff report, and on State law, the following:. SECTION 1. Affordable Housing Fund Award Criteria. The City Council establishes the following criteria for evaluating requests for use of the Affordable Housing Fund: 1. Eligibility. Use of the Affordable Housing Fund for the requested purpose will increase or improve the City's affordable housing inventoy and promote General Plan policies regarding housing and related community goals. 3. 31 Suitability. The project to be assisted is appropriate for its location, both in terms of land use and design. 2. Ur-geney. Need. There exists an urgent or overarching need for the type of housing to be assisted. ;4. Timing. The project would better serve the City's needs if it were built immediately as' opposed to latera W_ 4. 5. Financial Effectiveness. But for the requested assistance, the project would not be economically feasible; or AHF funding "leverages" significant additional funding from other sources. gj6l Readiness. The project has all necessary City approvals and is ready to proceed. cc: Ken Hampian, Wendy George,Jeff Jorgensen,Lee Price, John Mandeville,Jeff Hook EYCOUNCIL Firtm DIR C3tAO p FIN DIR aACAO ❑ FIRE CHIEF C'ATTORNEY ❑ PW DIR [9tLERK(ORIG ❑ POLICE CHF ❑/DEPT riEApS ❑ TDIR ❑ UTI .l 1-rooK L DIR 0 HR.DIR