CITY OF BELMONT INCLUSIONARY ZONING AND IMPACT FEES City Council Hearing January 10, 2017
TONIGHT S MEETING Actions to Date Recap Inclusionary Zoning Ordinance Recap Nexus Study and Impact Fee Results Recommended Action 2
ACTIONS TO DATE January 14, 2014 - Study Session to Review Belmont Housing Successor Agency Assets- Direction on Disposition and Development of the Agency s Real Property Assets Provided. February 11, 2014 - Resolution Authorizing Participation in County-wide Housing Nexus Study to Support Impact Fees for Affordable Housing and Inclusionary Housing Requirements Adopted. May 12, 2015-2015-2023 General Plan Housing Element Adopted, Including Program 2.1, Affordable Housing Development, Action 4, Develop and Implement an Inclusionary Housing Ordinance and adopt Housing Impact Fees. August 25, 2015 - Study Session to Review Housing Nexus Study findings Direction to Proceed with Inclusionary Housing and Housing Impact/Linkage Fee Ordinance. February 23, 2016 - Study Session to Review Housing Impact/Linkage fees - Support to Implement Impact/Linkage Fees on New Residential and Commercial Development Given. March 29, 2016 Direction on Development of Inclusionary Zoning Ordinance Given. October 4, 2016 - Planning Commission Presentation on Inclusionary Zoning Ordinance Received. November 1, 2016 - Planning Commission Recommendation to Adopt Inclusionary Zoning Ordinance Approved. 3
PREVIOUS DATA DISCUSSION Regional Housing Needs Allocation (RHNA) 2014 2022 Extremely Low Income Very Low Income Low Income Moderate Income Above Moderate Income Belmont 58 58 63 67 222 468 Foster City 74 74 87 76 119 430 Redwood City 353 353 429 502 1,152 2,789 San Carlos 97 98 107 111 183 596 San Mateo City 429 430 469 530 1,242 3,100 Source: Association of Bay Area Governments, Final 2014-2022 Regional Housing Need Allocation by County Total Foster City Belmont San Carlos Redwood City Extremely Low Income Very Low Income Low Income Moderate Income Above Moderate Income San Mateo City 0 500 1,000 1,500 2,000 2,500 3,000 3,500 4
SAN MATEO COUNTY INCOME LIMITS Income Limits by Family Size ($) Income Category 1 2 3 4 5 6 7 8 Extremely Low (30% AMI) 25,850 29,550 33,250 36,900 39,900 42,850 45,800 48,750 Very Low (50% AMI) 43,050 49,200 55,350 61,500 66,450 71,350 76,300 81,200 Low (80% AMI) 68,950 78,800 88,650 98,500 106,400 114,300 122,150 130,050 Median (100% AMI) 75,400 86,150 96,950 107,700 116,300 124,950 133,550 142,150 Moderate (120% AMI) 90,500 103,400 116,350 129,250 139,600 149,950 160,250 170,600 Effective 5/2016; Area median Income $107,700 (based on household of 4). 5
RECAP - INCLUSIONARY ZONING 6
INCLUSIONARY ZONING COMPONENTS BASIC REQUIREMENTS Large projects of 25 or more for-sale units must provide 15% affordable to moderate income households (about $129,000 for a family of four) Small for-sale projects less than 25 units either pay an in-lieu fee or provide an alternative The number of units required is calculated based on the total units in the project, excluding density bonus units Fractional units are rounded up to the next highest whole number (no in-lieu fee option) 7
INCLUSIONARY ZONING COMPONENTS EXEMPTIONS Single-family homes are exempt Second units are exempt Some nonprofit facilities for the homeless are exempt 8
INCLUSIONARY ZONING COMPONENTS DEVELOPMENT STANDARDS Affordable units must be comparable in exterior appearance and overall quality of construction to market-rate units Interior finishes must equal those of the base model market rate units Number of bedrooms must be comparable to average number of bedrooms in market-rate units Units must me dispersed throughout the developed unless otherwise approved Affordable units must have the same amenities such as access to common spaces, parking, storage, etc. 9
INCLUSIONARY ZONING COMPONENTS TIMING Affordable units must be constructed in proportion to construction of the market-rate units at a ratio of one affordable to each six market-rate Building permit may not be issued for any market rate unit unless a proportional number of affordable units have been issued Certificate of Occupancy or final inspection must occur similarly in proportion An alternative phasing plan may be approved 10
INCLUSIONARY ZONING COMPONENTS CONTINUED AFFORDABILITY All affordable units must remain so for 99 years Affordability is secured by resale restrictions, deeds of trust, or other regulatory agreement recorded against the property Affordable unit must be occupied as its principal residence, with exceptions Household must be income-verified as qualifying before occupancy 11
INCLUSIONARY ZONING COMPONENTS ALTERNATIVES Applicant of a for-sale project of 24 units or fewer can elect to build the 15% of units rather than pay a fee Applicant of a for-sale project may elect to provide 15% of the units as rentals to lower-income households rather than sell at affordable rates Off-site development proposals allowed, but at 20% of the market rate units, plus other provisions 12
INCLUSIONARY ZONING COMPONENTS APPLICATION PROCESS For-sale projects of 25+ units must submit an affordable housing plan concurrently with the application for the first approval of the project Costs of any proposed alternatives is borne by the applicant A plan is not required for an ownership project of 24 or fewer units The plan will be processed concurrently with all other required permits 13
RECAP - NEXUS STUDY/IMPACT FEES Commercial Linkage Fees Housing Impact Fees
HOUSING AFFORDABILITY GAP $450,000 $400,000 $350,000 $300,000 $250,000 $200,000 $150,000 $100,000 $50,000 $0 Average Affordability Gap by Income Group, San Mateo County Gap = $280,783 Very-Low Income (Rental) Gap = $240,477 Low Income (Rental) Gap = $175,558 Moderate Income (Rental and Ownership) The affordability gap is the difference between what households can afford to buy or rent, and the cost of building a new unit (ownership or rental) Affordable Sales Price or Rental Value Cost of Development per Unit
SUMMARY: IMPACT/LINKAGE FEES New Affordable Housing Fees paid Market rate housing development or new commercial development Affordable Housing Fund 16
USE OF NEXUS FEES Applies only to the types of uses studied Must serve the workforce Can be used to create (or augment) housing trust funds either countywide or for an individual jurisdiction
METHODOLOGY Inputs Housing prices/ rents Employment density Only considers worker households Impacts limited to San Mateo County Affordability gap Recommended fees are lower than maximum nexus fees
COMMERCIAL LINKAGE FEE New Commercial Space New Workers Affordable Workforce Housing
HOUSING IMPACT FEE New Housing Units New Household Spending New Workers Affordable Workforce Housing
GETTING TO THE RECOMMENDED LINKAGE AND HOUSING IMPACT FEE Maximum Fee (Based on Nexus) Feasibility Analysis Policy Considerations Recommended Linkage Fee/ Housing Impact Fee
OTHER POLICY CONSIDERATIONS Comparison with Other Cities Existing Fee Structure Affordable Housing Objectives Feasibility Recommended Fee Overlap between Two Fees
SUMMARY: FEES COMPARISON NEXUS STUDY (Max. Nexus-Based Fee) FEASIBILITY STUDY (Max. Feasible Fee) STAFF RECOMMENDATION SINGLE-FAMILY RESIDENTIAL MULTI-FAMILY RESIDENTIAL HOTEL RETAIL OFFICE $40-$44 $62-69 $151 $259 $247 $20-$30 $20-30 $4-$10 $5-$10 $12-$15 $20 $20 $4 $5 $12 Sources: Vernazza Wolfe Associates, Inc.; Strategic Economics, 2015. Keyser Marston Associates, 2016. 23
RECOMMENDED ACTIONS Introduce Housing Inclusionary Ordinance. Adopt Housing Impact Fee Resolution. 24
Questions and Comments 25