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Home My WebLink About1981-04-14; City Council; 6559; Reduce Time & Cost Affordable Housing Projectsil CITY OF CARLSBAD AGENDA BILL NO.. DATE: APRIL 14 1981 DEPARTMENT: BUILDING Sub] ect: PROPOSED TIME AND COST REDUCTION IN THE BUILDING PERMIT AND INSPECTION PROCESS Statement of the Matter i Initial: Dept.Hd. C . Atty 4e C. Mgr.,'j)-� The city's Building department has been looking at methods to decrease processing and inspection time for projects which provide low, moderate, or affordable types of housing. The proposal (attachment I) incorporates both priority processing and - inspections for residential developments which incorporate low, moderate, or af- fordable housing or for market rate housing located within the Redevelopment Area. The proposal will result -in direct savings to a developer by reducing the amount of fees required by some 30 percent, and indirectly by shortening his processing time frame. This reduces the amount of time that he would be required to pay interest on his construction note.. When coupled together, the direct and indirect cost savings could be significant in that current construction financing rates are in the 20 percent range. Income and price•qualifications proposed for this program are shown in attachment II. The proposal appears to be in concert with the Council's recently adopted Housing Element which calls for new and innovative methods to encourage development of low, moderate, and affordable housing. It further appears beneficial in terms of.the emerging Redevelopment Plan in that an integral part•of the revitalization of the Village Area involves housing development. Fiscal Impact City: 30 percent reduction in permit revenue from those qualifying projects. This cost reduction is possible due to reduced staff time in both the plan check and. field inspection process.. Developers: Direct and indirect cost savings. Reduced fees, expedited plan check, priority inspections and combined inspections. Exhibits 1. Proposal 2. Income and price qualification 3. Proposed amendment to Section 18.04. Recommendation That the City Council title Ordinance No. PO 171 and direct staff to set the ordinance for public hearing. f'.ni it i, I A- -; 4-14-81 Council approved the recamnendation and directed the City Attorney, to prepare the implementing documents. 0 PROPOSED TIME AND COST REDUCTION IN THE BUILDING PERMIT AND INSPECTION PROCESS A. BACKGROUND At all levels of government there is an increasing effort to find ways to reduce government regulations and developer costs. Local jurisdictions are continuously urged to streamline processes and reduce development costs. The City of Carlsbad Building Department has examined current processes and has 'identified actions that can reduce developer time and cost in the development process. B. PURPOSE The purpose of this proposal is to reduce time and fees for developments that qualify as low, moderate or affordable housing. State or federal guidelines shall be used as the qualifying criteria. This proposal also addresses the need to provide develop- ment incentives for those willing to provide low, moderate or affordably priced housing as determined by the City Council of the city of Carlsbad. This process may also be made available to residential market rate housing within the Village Redevelop- ment Project area. The intent of this proposal is to offer development incentives that may encourage construction of affordable housing in the city of Carlsbad. J� —1: M K f C. QUALIIFYING CRITERIA a. Units must qualify as low, moderate or affordable housing as determined by appropriate state or federal agencies. b. The Carlsbad City Council, for the purpose of this proposal, may determine qualifying housing units. c. There must be a minimum of ten (10) dwelling units per build- ing site or tract. D. PROCEDURE Informational material will be given developers at the time of submission of a tentative map or application for development agreement approval. The material will describe the regulatory process to be completed in order to accomplish construction and occupancy of structures on the lots to be created by the sub- division or covered by the agreement. Information will emphasize documents to be submitted by the developer, fee structure, target processing times and persons to be contacted in the city to answer questions regarding particular elements of the regulatory process. Subsequent to tentative map approval or application for de- velopment agreement, involved city staff will meet with the de- veloper to provide a focused review of the proposed project and the actions to be completed by the developer. If applicant accepts staff recommendations, he may sign an agreement with the city. If the agreement is approved, applicant will submit the required plans and documents for plan check and may start construction on the date of submission Where the developer wishes to commence construction of only -2- tT 11 the models prior to the final map recording, involved staff will meet with the developer and outline the options that are legally j available to satisfy his need. A site plan approved by the Di- rector of Planning will be required. An agreement assuming all risks and a bond covering the cost of removal of the models shall be submitted. The bond will be released after recordation of the map and final inspection of the models. The plans for the models and the development shall be checked expeditiously, but nothing will prohibit the developer from starting construction or receiving all necessary inspections. E. PLAN CHECK AND BUILDING PERMIT FEES Plan check and building permit fees for those qualifying developments shall be seventy percent of those shown in the adopted Uniform Building Code. This reduction shall apply to single family dwellings, condos, townhouses, apartments and duplexes. A recent plan the Carlsbad Building Department has adopted makes it unnecessary for the developer to wait at the counter while plan check fees are determined. This plan applies to units of three or more that are not subdivisions, and large commercial and industrial developments. The builder submits the necessary plans and exhibits, com- pletes a permit application and leaves. This entire process requires about ten minutes. Prior to accepting plan check in this fashion,the developer would be at the Developing Processing -3- UL Counter for as long as one and one-half hours. Developers who have experienced this new method are en- thusiastic about the time saved and complimentary to the city. When the plan check fee has been professionally determined, the developer is telephoned and payment is requested. A monitoring method has been established with the Finance Department which assures that all plan check fees are paid. F. INSPECTIONS All developments qualifying under this proposal shall re- ceive priority inspections made on the same day they are requested whenever possible. During construction of the models, inspections will be made by the Building Inspector accompanied by his/her Senior Building Inspector and the representative of the developer. This method will solve most of the construction problems. Then, when the project is under construction, the Building Inspector will visit the job as often as he feels necessary 'to control the quality of construction and make the code mandated inspections. This method will eliminate the delays which are caused by waiting for "following day" inspections. In order to minimize duplication of effort and expedite in- spections, the Building Inspector shall insure compliance with all city requirements except Fire Department, but including Planning, Zoning, Engineering, such as: sidewalks, driveways, grading, retaining walls, landscaping and street trees. If the Building Inspector requires assistance, he will contact an in- -4- spector from another department. The Building Inspector will coordinate final inspection with the Fire Department whenever possible. G. HOUSING APPEALS BOARD At any time prior to or during construction, the developer of qualifying housing will have seven day access to the Housing Appeals Board if he wishes to present a proposal for new methods or materials that will reduce the cost of Isis project. H. JUSTIFICATION FOR REDUCTION OF FEES Building Department services are grouped into three main categories, i.e., Permit Processing, Plan Checking and Field Inspection. a. Permit Processing staff time and costs, as well as applicant waiting times are significantly reduced when ten permits for identical buildings are proc- essed at one time. b. Plan Check time is significantly reduced when we provide complete structural check only on the models. Duplicate units are only given a cursory check to insure that there are no deviations from the model units. C. Field Inspection service costs and costly delays to the contractor will be reduced due to the following: 1. The decreased time to inspect repetitive structures -5- once the problems have been solved during the inspection of the models by the Senior Building Inspector in company with the assigned Buildir Inspector. 2. The historic simplicity of design of production housing units compared to the complexities of design found in large custom designed residences. 3. The improved communications and reduction of mis- understandings due to the same construction crews and the same inspector working on a series of buildings. 4. The relatively simple nature of the plumbing, electrical and mechanical systems in production housing. 5. The policy of having the inspector stop at [,he project when he is in the area in order to iden- tify and resolve any problems that may be de- veloping and to perform required inspections as construction progress dictates. 6. The Building Inspector performs inspections that historically have been delayed until separate in- spections were made by inspectors from the Planning Department, City Engineer Department and other elements of the regulatory structure. The combined departmental savings in plan check and field inspection of duplicate conventional dwelling units should off- -6-- set the proposed 30 percent reduction in permit fees. I. FISCAL IMPACT CITY If this proposal is accepted, there will be a 30 percent reduction in permit revenue from those qualifying projects. We anticipate a similar reduction in permit processing and field inspection costs to the department. DEVELOPERS There will be a direct fee reduction on multiple permits. Specific permit fee savings on a four -model, ten -unit project would be $1,036. Preconstruction plan review will enable ap- plicant to enter the plan check process with all documents re- quired and fewer plan corrections during the process. The plan check process will be expedited to eliminate a large portion of dead time for the developer. Concurrent plan check and construction will eliminate much money lost in construction loan interest while developer is awaiting results. The average plan check and correction time (three departments) is approximately six to eight weeks. This time will be greatly reduced. J. SUMMARY OF SAVINGS Indirect Time: Checklist (avoid future mistakes). Preliminary department review by Development Processing Group. Expedited Plan Check concurrent with construction. Priority Inspections. Combination Inspections (Planning, Zoning, Building). Direct Savings: Reduction of fees. -7- r M K ix .A. Definition urAffordable Housing Affordability Criteria The Department of Housing and Com- munity Development was asked to recom- mend criteria for determining affordable housing cost. Our approach is in large part reflective of Department regulations adopted pursuant to SB 652 (Sub -chapter 2 of Chapter 6.5 of Title 25 of the Califor- nia Administrative Code). The recom- mendation is divided into two categories: (A) affordable rents, and (B) affordable housing costs. (A) Affordable rent for lower income households: (a) (b) (c) 28 For a low to moderate income household, the maximum monthly rent should not exceed 25% of the monthly adjusted income. For a large, very low income family, or a very large, 'lower income family, monthly maximum rent should not exceed 15% of the monthly adjusted income. For our purposes here, "rent" shall be the average payment per month of the estimated component costs for the first twelve months of occupancy of a rental or cooperative unity. The following cost compo- nents shall be included in the monthly average "rent" to the household renting the unit: Payment for use and occupancy of a housing unit and associated land and facilities. Renter's insurance. Service charges assessed by the lessor which are required of all tenants, other than security deposits. (d) Utilities, including garbage collec- tion, sewer, water, electricity, gas, and other heating, cooling, cooking and refrigeration fuels. Utilities does not include telephone service. (e) Parking cost, if parking must be rented. (B) Affordable housing costs: — For a very low to median income household, affordable housing costs for purchasers of dwelling units means a housing cost not exceeding 25% of the gross income. — For a moderate income household, the total home purchase price shall not exceed 21i times grossincome, provided that in no event shall the total housing cost exceed 30% of the household's gross income. For our purposes here, "housing cost" shall be the average payment per month for the estimated component costs for the first twelve months of occupancy of a four sale unit. The following cost components shall be included in the monthly average "housing cost" to the household purchasing the unit: (a) Principal and interest on' a mortgage loan including any rehabilitation loans, and any loan insurance fees associated therewith. (b) Property taxes and assessments. (c) Fire and casualty insurance covering replacement value of property improvements. ATTACHMENT II A r- r (d) Property maintenance and repairs. (e) A reasonable allowance for utilities, including garbage collection, sewer, water, electricity, gas, and other heating, cooking, and refrigeration fuels. Utilities does not include telephone service. (1) Computation method to determining maximum monthly payments for very low income households: Number of Maximum Bedrooms Individual Unit Computations (Column A) (Column C) Very low income (from 1 limit for Exhibit A) 2-person family 48* Very low income 2 limit for 3-person family 48* Very low income 3 limit for 5-person family 48* Very low income 4 limit for (or more) 7-person family 48* * To compute maximum monthly rent divide by 80 instead of 48. (f) Homeowner association fees. (g) Land rent, if the housing unit is situated on rented land. (h) Parking cost, if parking must be purchased or rented. (2) For low income households: Number of Maximum Bedrooms Individual Unit Computations (Column A) (Column C) Low income (from 1 limit for Exhibit A) 2-person family •48 Low income 2 limit for 3-person family 48 Low income 3 limit for 5-person family 48 Low income 4 limit for (or more) 7-person family 48 29 -; i Very Low Income Households (a) "Very low . income households" means persons and families whose gross incomes do not exceed the qualifying limits for very low income families established and amended from time to time pursuant to Section 8 of the United States Housing Act of 1937. The qualifying limits are set forth in Exhibit A. These limits are equiva- lent to 50 percent of the area median income adjusted for family size by the United States Depart- ment of Housing and Urban Develop- ment. (b) "Very ' low income households" means the same as "very low income families" and "very low income person." Lower Income Households. (a) "Lower income households" means persons and families whose gross incomes do not exceed the qualifying limits for lower income families as established and amended from time to time pursuant to Section 8 of the United States Housing Act of 1937. The qualifying limits are set forth in Exhibit A. These limits are equiva- lent to 80 percent of the area median income adjusted for family size and other adjustment factors by the United States Department of Housing and Urban Development. (b) "Lower income households" includes very low income households. (c) "Other lower income households" are those lower income households who are not very low income households. (d) "Lower income households" means the same as "low income house- holds," "persons of low income," and "Iow income families." Moderate Income Households. (a) "Moderate income households" means persons and families who are not "lower income households" and whose gross incomes do not exceed 120 percent of the area median income adjusted for family size in accordance with adjustment factors adopted by the United States Department of Housing and Urban Development in establishing income limits for lower income families. For purposes of this subchapter, the income limits are set forth in Exhibit A. (b) The maximum gross income Iimits for moderate income households is the same as that for "persons and families of moderate income" and "persons and families of low or moderate income." (c) "Persons and families of low or moderate income" includes very low, lower, and moderate income house- holds. 31 IN Exhibit A ( continued ) 6932 Income limits (as of July 1, 1980) NUMBER OF PERSONS IN FAMILY (on two pages) COUNTY STANDARD 1 2 3 4 PLACER Very low income- 6,850 7,850 8,800 9,800 Lower income 12,000 13,700 15,400 17,100 Median income 15,000 17,100 19,250 21,400 Moderate income 18,000 20,550 23,100 25,700 PLUMAS Very low income 6,450 7,350 8,300 9,200 - Lower income 10,400 11,900 13,400 14,900 Median income 13,000 14,900 16,750 13,600 Moderate income 15,600 17,850 20,100 22,300 RIVERSIDE Very low income 6,050 6,900 7,800 8,650 Lower income 12,000 13,700 15,400 I7,100 Median income 15,000 17,100 19,250 21,400 Moderate income 18,000 20,550 23,100 25,700 SACRAMENTO Very low income 6,850 7,850 8,800 9,800 Lower income 12,000 13,700 15,400 17,100 Median income 15,000 17,100 19,250 21,400 Moderate income 18,000 20,550 23,100 25,700 SAN BENITO Very low income 6,000 6,850 7,700 8,550 Lower income 10,400 11,900 13,400 14,900 Median income 13,000 14,900 16,750 18,600 Moderate income 15,600 17,850 20,100 22,300 SAN Very low income 6,050 6,900 7,800 8,650 BERNARDINO Lower income 12,000 13,700 15,400 17,100 Median income 15,000 17,100 19,250 21,400 Moderate income 18,000 20,550 23,100 25,700 SAN DIEGO Very low income 6,650 7,600 8,550 9,500 Lower income 12,000 13,700 15,400 17,100 Median income 15,000 17,100 19,250 21,400 Moderate income 18,000 20,550 23,100 25,700 SAN Very low income 8,200 9,350 10,550 11,700 FRANCISCO Lower income 13,100 15,000 16,850 18,700 Median income 16,400 18,700 21,050 -• 23,400 Moderate income 19,650 22,450 25,250 28,100 SAN JOAQUIN Very low income 6,500 7,450 8,350 9,300 Lower income 12,000 13,700 15,400 17,100 r Median income 15,000 17,100 19,250 21,400 Moderate income 18,000 20,550 23,100 25,700 R SAN LUIS Very low income 5,850 6,700 7,500 8,350 ! OBIS?O Lower income 10,400 11,900 13,400 14,900 Median income 13,000 14,900 16,750 18,600 Moderate income 15,600 17,850 20,100 22,300 38 NUMBER OF PERSONS IN FAMILY (on two pages) COUNTY STANDARD 5 6 7 8 PLACER Very low income 10,600 11,350 IZ,150 12,950 Lower income 18,200 19,250 20,350 21000 Median income 22,750 24,100 25,400 26'750 Moderate income 27,300 28,900 30,500 32,100 PLUMAS Very low income 9,950 10,650 11,400 12,150 Lower income 15,800 16,750 17,650 18,600 Median income 19,750 20,950 22,.100 23,250 Moderate income 23,700 25,100 26,500 27,900 RIVERSIDE Very low income 9,350 10,050 10,750 11,400 Lower income 18,200 19,250 20,350 21,400 Median income 22,750 24,100 Z5,400 26,750 Moderate income 27,300 28,900 30,500 32,100 SACRAMENTO Very low income 10,600 11,350 12,150 12,950 Lower income 18,200 19,250 20,350 21,400 Median income 22,750 24,100 25,400 26,750 Moderate income 27,300 28,900 30,500 32,100 SAN BENITO Very low income 9,250 9,900 10,600 11,300 Lower income 15,800 16,750 17,650 18,600 Median income .19,750 20,950 22,100 23,250 Moderate income 23,700 25,100 26,500 27,900 SRN Very low income 9,350 10,050 10,750 11,400 BERNARDINO Lower income 18,200 19,250 20,350 21,400 Median income 22,750 24,100 25,.400 26,750 Moderate income 27,300 28,900 30,500 32,100 SAN DIEGO Very low income 10,250 11,000 11,800 12,550 Lower income 18,200 19,250 20,350 21,400 Median income 22,750 24,100 25,400 26,750 Moderate income 27,300 28,900 30,500 32,100 SAN Very low income 12,650 13,550 14,500 15,450 FRANCISCO Lower income 19,900 21,050 22,250 23,400 Median income 24,850 26,350 27,800 29,250 Moderate income 29,850 31,600 33,350 35,100 SAN JOAQUIN Very low income 10,050 10,800 11,550 12,300 Lower income 18,200 19,250 20,350 21,400 Median income 22,750 24,100 25,400 26,750 Moderate income 27,300 28,900 30,500 32,100 SAN LUIS Very low income 9,000 9,700 10,350 11,000 OBISPO Lower income 15,800 16,750 17,650 18,600 Median income 19,750 20,950 22,100 23,250 Moderate income 23,700 25,100 26,500 27,900 39 -1, 1 1 ORDINANCE NO. 8091 2 AN ORDINANCE OF THE CITY COUNCIL OF THE 3 CITY OF CARLSBAD, CALIFORNIA, AMENDING TITLE 18, CHAPTER 18.04 OF THE CARLSBAD MUNICIPAL CODE BY THE ADDITION OF SECTION 18.04.045 BUILDING PERMIT FEES i 5 The City Council of the City of Carlsbad, California, does ordain as 6 follows: 7 SECTION 1: That Title 18, Chapter 18.04 is amended by the addition of 8 Section 18.04.045 to read as follows: 9 18.04.045 Sec4on 3O4(g) added. uced y es for Incentive Housing. 10 The fees establis�le d by Section 3O3(a) and O4(b) for Building permits 11 and for plan checking shall be odifie for qua ified projects providing 12 housing affordable to persons of,low and m est income. 13 Qualified pro' 1,3 consist of ten (10) or more units on a single 14 site or tract. The ity Cou 'il shall determine whether a project qualifies y 15 under this section. a buil i permit fee and plan check fees shall be 16 70 percent ofithe otherwise appli able fees. 17 EFFECTIVE DATE: This ordinan e shall be effective thirty days after 18 its adoption, and the City Clerk shal\ certify to the adoption of this 19 ordinance and cause it to be published zt least once in the Carlsbad Journal 20 within fiftee days after its adoption. 4, 21 INTRODU ED AND FIRST READ at a regula meeting of the Carlsbad City 22 Council held on the day of 1981, 23 24 and thereafter 25 26 27 28 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 PASSED AND ADOPTED at a regular meeting of said City Council held on the day of 1981 by the following vote, to wit: AYES: NOES: ABSENT: ATTEST: ALETHA L. RAUTENKRANZ, City Clerk (SEAL) RONALD C. PACKARD, Mayor "AFFORDABLE"INCOMES, tt:Xl;tt i SEEELTEP, t'FIM:EtiTS BY HOUSEHOLD SIZE ze of units Ito. of o0y Kedian Y,o. 1100v7 •,f ti^dian Ho. 12W, t.::dian F.o. r r of 5drns Persons IncoY PI. lncoPI tncorY �T t bd l S� v C� 2 bd _Z v 3 bd I j y�ry �St7 `Eal �; r S� r. k bd I7�(v� J� G ( (Ll��c(t(fc h st��r? — to Example. " r Household size - family o; k ' �t�4o0 i2 earning the n:_dian inc. Supports 1Z0fpinterest loan Sale price !P--'1,ODD l0% down pay:,=nt should be used to ca1CUl ate sales price. Interest raze used should be substattiated by lender cor-i;-rant or present rate eased_