CU CHICOi. In/ -/ City Council Agenda Report Meeting Date 1/0/ TO: CITY COUNCIL File: ADU Temporary Fee Reductions FROM: Brendan Vieg, Deputy Director, CDD (-0, brendan.viecl@chicoca.qov) Bruce Ambo, Principal Planner (-01, bruce.ambo@chicoca.gov) RE: Accessory Dwelling Unit Fee Reductions in Response to Camp Fire Housing Shortage REPORT IN BRIEF On November,, the Camp Fire devastated the Town of Paradise and surrounding area resulting in the largest and deadliest fire in the history of California. In total, 1, residences, commercial buildings, and, other structures were lost to the Camp Fire. Chico, as the largest neighboring city with commercial, institutional and residential infrastructure and services, saw an unprecedented influx of Camp Fire evacuees in need of a wide range of emergency and nonemergency services, and particularly temporary and permanent housing. This catastrophic event had an immediate impact on the need for additional housing. Staff is recommending that the City Council consider stimulating Accessory Dwelling Unit (ADU) production by temporarily reducing development impact fees for one (1) year. Recommendation: The Deputy Community Development Director recommends that the City Council: 1) Hold a public hearing regarding a resolution temporarily reducing ADU development impact fees for one (1) year; ) Adopt a resolution (Attachment A) temporarily reducing ADU development impact fees for one (1) year and amending the Municipal Fee Schedule; and RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHICO TEMPORARILY REDUCING THE DEVELOPMENT IMPACT FEES FOR ACCESSORY DWELLING UNITS FOR ONE YEAR IN RESPONSE TO THE CAMP FIRE HOUSING SHORTAGE ) Provide direction to staff for any further amendments to the ADU regulations that would stimulate ADU production. FISCAL IMPACT Development impact fee revenue would be reduced in proportion to the level of new ADU housing produced during the one year the reduced fees would apply. BACKGROUND/DISCUSSION On October,, the City Council reduced the development impact fees (DIF) for ADUs by 0% in recognition of the reduced impacts to public services. For example, the DIF for ADUs that was previously $1,1 was reduced to $,0,0. This temporary fee reduction would bring the
ADU Fee Reductions in Response to Camp Fire Housing Shortage City Council Mtg. 1/0/ Page of of DIF down to $,0.. Other permit application fees would still apply, including building plan check and inspection, sewer application, and address assignment which totals about $, (for a 1,0 square foot ADU), for a total combined (application/reduced DIF) fee of approximately $,.. Additional ADU Ordinance Amendments If the Council is interested in pursuing additional ADU amendments that would further reduce barriers and create additional incentives to stimulate ADU housing production, staff has identified several potential issue areas including: Eliminating the owner occupancy requirement Establishing an amnesty program for existing nonconforming ADUs Developing an affordability covenant where an affordable ADU rent level would be maintained for a certain period of time (perhaps years) in exchange for further fee relief or waivers Creating a revolving loan program or alternate loan program or financing mechanism to finance ADU construction loans Partnering with homeowners to either rent or rent to own ADUs Facilitating ADU design with prototype plans and interactive resources Staff is seeking direction on which of these options or other alternatives the Council in interested in pursuing. Staff would then draft focused Code amendments and begin the amendment process with the Planning Commission. On a positive note, this work would align with the newly released notice of funding availability from the State Housing and Community Development Department for grant funds for local planning improvements to facilitate housing and affordable housing projects. These funds are anticipated to be released to entitlement communities, which includes Chico, in Summer. In a broader context, staff also intends to return to Council periodically with other resiliency measures aimed at strengthening the City's response to the Camp Fire housing shortage. Reviewed by: Bre dan Vieg Deputy 1 Community Developmet Director Approved and Recommended by: 1»(U Mark Orme, City Manager DISTRIBUTION City Clerk ATTACHMENTS A. Resolution Temporarily Reducing the Development Impact Fees for ADUs in Response to the Camp Fire Housing Shortage
RESOLUTION NO. A RESOLUTION OF THE COUNCIL OF THE CITY OF CHICO TEMPORARILY REDUCING THE DEVELOPMENT IMPACT FEES FOR ACCESSORY DWELLING UNITS FOR ONE YEAR IN RESPONSE TO THE CAMP FIRE HOUSING CRISIS WHEREAS, the Camp Fire of November destroyed over,000 acres and burned over,000 structures in Butte County, resulting in a large displacement of residents from the Town of Paradise and other surrounding communities; 1 WHEREAS, on November,, the Governor of California proclaimed a State of Emergency 1 for the County of Butte, and on November 1,, the President of the United States declared the existence of a major disaster in the State of California and ordered Federal aid to supplement State and local recovery efforts in the areas affected by wildfire; WHEREAS, Cal Fire officials have determined that over 1,00 residences, commercial buildings, and, other structures in Butte County have been destroyed by the Camp Fire; WHEREAS, the Chico City Council, prior to the Camp Fire, previously found that the City of Chico is experiencing a housing crisis, and particularly for rental housing that is affordable to lower and moderate-income residents; WHEREAS, the extreme number of housing units damaged in the Town of Paradise and the surrounding area increases the pressure on housing demand and shortage in Chico by several orders of magnitude;
WHEREAS, the destruction of housing units exacerbates the pressure of persons who lived and worked in the Town of Paradise and surrounding communities, and those who will be working to restore the viability of the Town of Paradise, to relocate to other housing far from their home due to the housing shortage; WHEREAS, accessory dwelling units due to their size limitations are by design a form of market rate affordable housing; and WHEREAS, accessory dwelling units also provide a source of rental revenue to the homeowner or additional housing for a family member. 1 NOW, THEREFORE, BE IT RESOLVED by the Council of the City of Chico that the 1 development impact fees for accessory dwelling units shall be temporarily reduced for one year and the City's fee schedule shall be amended accordingly in response to the Camp Fire housing shortage. Section 1. Temporary Fees Reduction. The development impact fees shall be reduced by 0% from the current fee amount and the fee reduction shall remain in effect for one (1) year from the date of passage of this resolution. Section. Expiration This temporary fee reduction shall expire in one (1) year, and the development impact fees shall revert to the fee amount in effect prior to the adoption of this resolution. Section. Effective Date. This Ordinance shall take effect immediately upon its adoption. 1 1
lili THE FOREGOING RESOLUTION was adopted by the City Council of the City of Chico at its meeting held on the th day of December, by the following vote: AYES: NOES: ABSENT: ABSTAIN: DISQUALIFIED: ATTEST: APPROVED AS TO FORM: 1 1 Deborah R. Presson, City Clerk Vincent C. Ewing, City Attorney* *Pursuant to The Charter of the City of Chico, Section 0(E)