HomeMy WebLinkAbout10/17/2017 Item 1, Fowler
Christian, Kevin
To:Gallagher, Carrie
Subject: Fee Program
From: John Fowler <
Sent: Tuesday, October 17, 2017 1:26 PM
To: Gomez, Aaron; Christianson, Carlyn; Harmon, Heidi; Pease, Andy; drivoir@slocity.org
Subject: Capital Facilities Fee Program
Dear Mayor and Councilmembers,
I hope this email finds you well. I am reaching out to you regarding the Council’s study session item tonight regarding
the implementation of the Capital Facilities Fee Program. I have attached Peoples’ public comment letter when this item
went before the Planning Commission for your reference. I have also summarized our main comments below.
First, the implementation timeline is concerning. If the Council chooses to adopt the CFFP, the fee schedule will change
as early as December, which will make it difficult for pipeline projects to be able to adjust. In many cases, such projects
have been in predevelopment in years, working with investors, lenders, and other project partners to secure financing
under a specific fee schedule. A last-minute change to the project’s financing through fee changes could be challenging
for any development, but could be devastating for affordable housing. Affordable housing developers cannot respond to
these changes by raising rents (as can a private developer) since rents are deed-restricted, nor can the developer seek
additional financing at such a late stage in the development process. (For the sake of transparency and disclosure, I
would like to note that Peoples’ workforce housing project located on Broad Street would be in a challenging position if
the Council implements this change.) We hope that the Council will consider recommending a clause which will allow
projects that have shown a commitment to development by applying for entitlements to be grandfathered into the old
fee schedule.
Furthermore, we hope that you will consider amending Resolution 8415 to include some impact fees as well, especially
in cases where the services that an affordable housing developer pays for are included on-site. For example, on new
construction affordable housing properties funded by the low-income housing tax credits, affordable developers are
already required to include recreational areas/open space on-site. The convenience of an on-site play structure is usually
preferred by our residents over an adjacent neighborhood park, but we are still required to pay for the play area as well
as the full park facilities fees. We hope that the Council will consider studying impact fee waivers/reductions for
affordable housing in order to ensure the more efficient and expedient development of affordable housing.
Thank you for your consideration of the comments above. If you have any questions or concerns, please don’t hesitate
to reach out.
1
John Fowler, CPA
President/CEO
3533 Empleo Street
San Luis Obispo, CA
93401
Tel (805) 540-2462 / Fax
(805) 544-1901
Opening Doors. Building Neighborhoods. Improving Lives.
2
_______________________________________________________________________________________________
3533 Empleo Street, San Luis Obispo, CA 93401
(805) 781-3088 phone • (805) 544-1901 fax
admin@pshhc.org • www.pshhc.org
26 E. Victoria Street, Santa Barbara, CA 93101
(805) 961-5152 phone • (805) 962-8152 fax
admin@pshhc.org • www.pshhc.org
Federal Tax ID #95-2750154
October 11, 2017
Planning Commission
City of San Luis Obispo
990 Palm Street
San Luis Obispo, CA 93401
RE: 10-11-2017 Planning Commission Agenda Item 2: AB 1600 Requirements Nexus Study Update
Dear Esteemed Members of the Planning Commission:
Thank you for allowing us the opportunity to provide public comment regarding staff’s report for the Planning
Commission’s Study Session on Item 2: AB 1600 Requirements Nexus Study Update. We would like to offer a few
recommendations for the Planning Commission’s consideration below.
1. Create an interactive fee calculator to implement the new fee schedule.
Concern: Calculating fees is often an onerous task for developers and city staff alike. Although fee schedules are
intended to be straightforward mathematical calculations, in practice, there is often great confusion in this
process. This is not a transparency issue, but rather, the result of fee complexity. As a result, project participants
spend precious time working to determine fee payments, which staff may later recalculate. Additionally, from a
developer’s point of view, fee changes can be problematic as banks and investors begin underwriting a project to
one amount, only to pay another.
Recommendation: While the city’s Master Fee Schedule is helpful, it is not complete, as it does not include impact
fees. One innovative way to address this discrepancy would be to create an interactive and comprehensive online
fee calculator that could be used by both the city and developers when determining fees. Such a tool could be
posted on the City’s website and require developers to input all relevant information about a project, which would
be quick, consistent, and efficient. This resource would reduce the time and headaches spent by all participants in
this process.
2. Stagger fee implementation for projects in the pipeline.
Concern: As you are already aware, developers often invest significant time and resources into a project years
before ever applying for a building permit. Developers must create a tight budget that will incentivize investment
and lending in a particular development. Fee schedules are a critical component of this budget, as it is a sizable
portion of predevelopment expenses. Therefore, it is important for developers to be able to anticipate fees or
potential changes to fees. The December implementation date noted in the staff report would make it difficult for
pipeline projects to adjust to the city’s new fee schedule. While this is problematic for both private projects, it is
particularly challenging for affordable housing, as regulatory agencies and deed-restrictions cap income from rent.
Furthermore, at such a late stage in development, an affordable housing developer would be unable to seek
additional funds to close the financial gap created by the new fee schedule. Such a project would either be
significantly delayed or stopped altogether.
Recommendation: We recommend for the Planning Commission to consider delaying the fee implementation
schedule for projects that have already applied for entitlements through the City. These projects would be most