HomeMy WebLinkAbout1993-03-23; City Council; 12129 Exhibit 8; Inclusionary Housing ProgramEXHIBIT 8
ATI-ACHMENT “B”
HENTHoRNANDAssocIATEs
OUESI’ION:
1. The calculation of the number of lower and moderate income units is proposed to
be based on the gross level of analysis conducted at the Local Facilities Management
Plan level. It is acknowledged that in most instances the projected number of units
are not achieved when project plans are approved. In some instances this is due to
market considerations, but in a number of instances it is due to environmental or
other governmental regulations not under the control of the owner developer.
In the event that full development is not achieved the proportion of affordable units
increases the economic burden borne by the market rate units in the project. If the
developer is forced to seek assistance as provided in the ordinance, the maximum
qualifying income is reduced from 80% of median to 60% thereby creating an even
deeper dilemma that must be resolved by deeper market rate subsidy or deeper
public agency (City) subsidy.
The growth management approach recognizes that actual yields on any property are
determined at the time detailed constraints analysis is conducted. If yields are
significantly less than projected, the facilities demand is adjusted accordingly. It is
requested that consideration be given to a similar approach to determining total
required units. Where it can be demonstrated that full entitlement cannot be
achieved as a result of regulatory requirements, the ordinance should permit the
granting of assistance without a resultant decrease in qualifying income levels.
RESPONSE:
1. Stafagrees that the a#Gnment of the maximum residerttial yield per project site may not
always be achievable, due to environmental or other neguhztory consi&-rations.
Accordingly, stqf is recommending that Sections 21.85.070@, 21.85.080(h), 21.85.090(f)
and 21.85.100(e) of the Inclusionary Ordinance be raked to specif that, ifin the course
of project rwiew, the City determines &it the base t&&n&l yield cannot be achieve4
because of environmental cxmstraints, or reguktory considkations (i.e.; development
standards and/or design guidelines), then the base shall be adjusted to the number of
dwelling units actually approvable, taking into considktion the envitonmental or
mg&tory constraints.
OUJSI’ION:
2. The ordinance contains no provisions to address extended vacancies created by lack
of demand from qualified buyers or renters. Alternatives should be made available
to owners who, after making legitimate efforts, may be unable to locate qualified
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tenants or buyers. These alternatives should be available after a unit has been
vacant for a specified time and subject to verification of owner’ effort to market to
eligible families and individuals. One such alternative approach could involve
allowing the vacant unit to be leased at market rates subject to the next available
unit being made available for lower income occupancy.
RESPONSE:
2. while the City has not directly addressed the issue of extended vacancies within the
Inch&nary Ordinance, it should be noted that the City will be taking a proactive role in
renting or selling available units. The City intends to prepare and maintain a list of
qualifid households (both renters and purchasers) for use as units become available.
Discussions with non-prx$.t developers, who have considerable experience in managing and
marketing affordable rental units concluded that, provided that the units are well
maintained, there will be a great demand for the units. In view of this anticipated high
demand, them does not seem to be any evidence to suggest that a unit which is properly
maintained would be less marketable to a lower income household than to a household
which could pay market rate rents. Themfom, sta$dk not recommend allowing vacant
rental units to be leased at market rates.
Staff is however recommending a revision to the Inch&nary Ordinance (Section
21.85.150(g)) to allow inclusionary for-sale units to be leased to an eligible household,
until it is sold to another eligible household in the event that an available in&&nary
unit is not purchased (by the City or an eligible household) within 90 days of noti&ation
of availability of the unit.
OUESI’ION:
3. The resale section should accommodate some provision for equity build up. Equity
could result simply from increases median income which could allow the unit to be
sold at a somewhat higher price than originally established. In the absence of such
a provision there would be very little incentive for an eligible buyer to “invest” the
required down payment.
RESPONSE:
3. Staff agrees that the restrle price which is established should allow for some equity to be
passed through to the seller of the unit. Equity pass&roughs will be addressed in the
formula for establishing resale prices. l%is formula will be adopted through City Council
resolution.
OUESI’ION:
4. The ordinance contains no clear definition as to what constitutes an assisted unit.
If a project, for other than marketing reasons, is unable to achieve maximum
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economic viability, are the units required to meet the 60% criteria. (See Item 1
above.)
RESPONSE:
4. The term “assisted unit’ is recommended for revision to more clearly define what
constitutes an assisted unit. Speci$cally, an “assisted unit’ means a dwelling unit as
defined in Section 50055 of the California Health and Safety Co&. In a&it& to this proposed dejZtion revision, Section 21.85060 Inantks to O&t the Ckt of AJimhbkk
Housing Ikvelopment, has been revised to specify that if the City provides incentives or
financial assistance in the form of density incrwses, subsidized fees, direct@mcial aid,
or development standards mod$.cations, to enable the development of affordable housing,
then the City has the right to establish the rental rates or sales prices for such units at
rates which would be aflordable to households with incomes which are below the upper end
of each income class (i.e.; below SOYo, 80% and 120% of the area median income for very
low, low, and moderate income classes respectively).
These revisions will provide the City the discretion to achieve lower cost sgordable housing
in exchange for providing incentives for the production of such housing. The just$cation
for this revision is that, while a low-income unit is technically affordable at 80% of the
area median income, it would not be affo&ble to other families in that income class
whose income is below 80% of the areD median income. This revision would allow the tent
or sales price for a low-income unit to be set at any level between 50% and 80% dependent
upon the amount of subsi& provided by the City.
Any inclusionary unit which is granted assistance, as defined in Section 50055 of the State
Health and Safety Code, would be requited to comply with the 604/o criteria. Any
inch&nary unit granted other types of a&dance, from the Ciiy, may be required to
comply with the 60% criteria, subject to the discretion of the City.
OUESTION:
5. The ordinance is unclear as to the basis for the fee authorized to offset
administrative costs. The City has consistently represented that affordable housing
is of benefit to the entire City. Therefore, it appears reasonable to fund related
administrative costs from general City revenues rather than compounding the
problems of providing affordable housing by increasing the fee burden on those
charged with providing the housing.
Under the provisions of the ordinance all significant costs associated with reporting,
management and monitoring are assigned to the property owner. The remaining
administrative reporting requirements are public agency generated and should be
funded as such.
RESPONSE:
5. You are wnect in noting that affordable housing is a benefit to the entire City. In
accordance, the City, through the granting of density bonuses, development starulards
modifications, financial incentives and Tdited processing, shall be a signi$cant partner
in the implementation of any afford&e housing units granted such assistance.
In addition, the City has tasked to itsew the responsibili@ for the provision of 200
additional a$ordale dwelling units by 1996. In this wntkxt, the anticipated administrative costs for monitoring and managing inclusionary units (especially for-sale
units) will be signi$cant.
lhe administrative costs will include: a. the administnttion and enforcement of the terms
of various agreements (i.e.; Affordable Housing Agreements, Combined Inclusionary
Housing Agreements, Rental Agreements, For-Sale Agreements, and Resale Agreements);
b. qualifying tenants and homebuyers; c. setting rental rates and sales prices; and d.
reviewing annual monitoring reports.
while the Ordinance specifies that all inch&nary rental units shall be managed and
operated by the owner of the units, the above-mentioned tasks shall be the responsibility
of the City. The specify amount of the fee has not been established as yet. The fee will
not be established until the new Director of Housing and Redevelopment is brought on-
board. When the amount of the fee has been determined it will be adopted through City
Council resolution.
HOFMANPLANNING
OUE!XION:
1. Section 21.85070 and 21.85080. Regulations for new Master Plans and Specific
Plans.
a. 21.85.070(c) states that the affordable housing requirements may not be met
by payment to the City of an in-lieu fee or in-lieu contributions. In other
words this prevents a Master Plan developer from providing land that
another developer or nonprofit group could develop. This requirement places
additional burdens on developers located within a master plan as opposed to
developers not located in a master plan. This lack of flexibility for master
plan communities makes the affordable housing requirement difficult to
provide.
RECOMMENDATION: It is recommended that this section be revised to state
that the first preference would be for the developers of
Master and Specific Plans to provide the units onsite,
but the City Council may allow an in-lieu fee or other
in-lieu contribution such as land dedication.
RESPONSE:
- 1.a. Policy 3.6~~ of the Housing Element spec$es that “A minimum of f;fteen percent of all
units approved for any master plan community or residential specific plan shall be
affordable to lower income households.” Consistent with this policy direction, the
Inclusionary Ordinance has been drafted to Hquire that master and specific plans shall
sati& inclusionary requirements through the production of units. The requirement to
produce units on the ground does not preclude a master plan developer from providing
land to a non-pr#.t group or other developer who would produce the inclusionary units
for the master developer. However, the master or specific plan developer shall not be
relieved of the obligation of providing the required number of inclusionary units associated
with the master or specifk plan.
The on& residential units which would be allowed to satisfy inclusionary requirements
through other alternatives (in-lieu or impact fees) are small projects (6 units or fewer) or
previously approved subdivisions. The justifiations for these alternatives am thoroughly
discussed in the sta$repott.
Other r&&tial subdivisions, of 7 or more dwelling units, which are not located in master
or specific plans would aLso be required to develop inclusionary units on the ground.
There are a signi$cant number of affo&ble units (1400) required to be produced within
Car&bad over this Housing Element cycle. Qfallficture residential developments within
the City, the master and specific plan developments, which contain large land holdings,
resulting in an economy of scale, should be most capable of producing ago&able units.
While stiff does not tecommend support of your suggestion to allow mast& plan
inclusionary requirements to be satisfied through payment of an in-lieu fee, Section
21.85.040(b) would allow inclusionary requinements to be satisfkd through other
alternafives, at the discretion of the City.
OUESI'ION:
1.b. Section 21.85.070(d) requires a master or specific plan to include an inclusionary
housing plan indicating the number of inclusionary units for the entire master plan,
designating sites, and a phasing schedule for construction of units. This level of
detail would be difficult if not impossible to accurately provide when developing
plans for a master plan that may take ten years to buildout. At this level of
planning, both the number and type of units and phasing of units to be built is
unknown, yet this section requires this level of detailed planning in order to provide
the housing plan. This requirement is particularly onerous in master plans with multiple ownership where each property develops independently based on market
conditions which would in turn, preclude phasing decisions at the master plan level.
RECOMMENDATION: It is recommended that this section be revised to note
that while the master plan should designate sites for affordable housing projects, a phasing schedule and the
maximum number of units that would be constructed.
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The exact location, phasing and number of units may be
modified subject to the approval of the Planning
Director as long as the required percentage of units are
provided.
RESPONSE:
lb.’ The Inclusikmary Housing Plan does reguire basic information on the required number,
location and phasing of inclusionary units. Some master&eci$c plans will include a
comprehensive level of planning which would enable the Inclusionary Housing Plan to be
quite speci@. If however, the master/spec$c plan is not prepared at this level of detail,
an Inclusionary Housing Plan would still need to be provided. In this situation, the
Inclusionary Housing Plan wuld provide more conceptual information including:
1. The total number of base residetLfial units, accurate to the level of environmental
analysis and planning completed to date;
2. The number of required inch&nary units (calculated on at least 15% low-income
and 5% moderate-inwme of the above-noted base);
3. An identification of the neighborhood(s) where the inclusionaty units areproposed
to be developed. In the event that specific neighborhoodk are not identified, the
plan should indicate that 15% and 5% of each neighborhood shall be comprised
of low-income and mo&rate-income units mspectively; and
4. A phasing schedule for production of all housing, including the inclusionary units.
A phasing schedule, generally related to f&ity improvements, is included in all
masterlspecifk plans anyway.
Your proposed recommendation to raise this section is not necessary, in that, any proposed
rwisions to any part of a mastkrplan, including the Inclusionary Housing Plan would be processed through a master plan amendment.
OUESI’ION:
1.c Sections 21.85.070(f), 21.85.080(h), and 21.85.090(f) requiremasterplans, specific
plans and qualified subdivisions to provide affordable units based on their net
acreage times their growth control point. This is totally inappropriate and possibly
illegal. All fees collected by the City are based on the actual impact of a project
rather than its theoretical impact. Sewer, water, school, building permits, etc. are
all based on the actual number of units being built and their impact on the facilities
rather than the number of units that could theoretically be constructed on a site.
There is a “nexus” test which requires that any impact fees paid must be reasonably
related to the actual impacts of development.
Affordable housing requirements should be based on the number of units that are
actually being approved, rather than the theoretical potential of a site. This
requirement will strongly discourage developers from providing any additional open
space in a project since they will be penalized for doing so according to this section
of the ordinance. Often design constraints and City standards make it impossible to obtain the number of units allowed by a site’s growth control point.
RECOMMENDATION: It is recommended that these sections should be revised
to state that affordable housing requirements will be
based on the actual number of units being built rather
than a theoretical number that it may not be possible to
achieve.
RESPONSE:
1.c See Response 1. to Henthom and Associates.
OUESI’ION:
2. Section 21.85.110. Combined Inclusionary Housing projects.
a. Section 21.85.110(a) states that it is the exclusive prerogative of the City to
determine whether or not it is in the public interest to authorize two
residential sites to form a combined inclusionary housing project. We do not
understand the City’s position to put all the burden on the development
community and in turn have the exclusive right to determine the public
interest. We believe the City should view the provision of affordable housing
as a joint partnership between the development community, City and public.
We believe this type of language is counter to that philosophy.
RECOMMENDATION: It is recommended that this subsection be eliminated.
RESPONSE:
2.a Within this Ordinance, the City has estabkhed a hierarchy for the prefeerred location of
inclusionary units, with the number one prkity being within the same project site of the
proposed market rate units. Thk priority will serve to foster economic integration and
avoid the wncentmtion of inch&nary unit3 in in$ll atecLs.
The Ci@ however tecJizes that some situatk~ns will arke where a signi#icant ewnomic
burden may occur to a developer ifresaicted units must be firuy integrated with market
rate units. In these instances the City would alkkw combined inclusionary projects. As
with all discretionary applications the City does have the exclusive prerogative to either
approve or deny the project. The language within this subsection is wnsi3ent with this
principal of government.
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OUE!XION:
2.b Section 21.85.110(h) requires that a receiver site is located within the same
quadrant of the City as the originating site. Again, we believe this limits the
flexibility of the City and development community to effectively provide adequate
affordable housing. Some sites may be located in closer proximity to jobs, public
transportation and/or another developer may provide a superior combined
inclusionary housing project alternative. We do not think the provision of
affordable housing should be limited to a specific quadrant.
RECOMMENDATION: It is recommended that the ordinance be revised to
allow for affordable units to be transferred from one
quadrant to another as long as it can be demonstrated
that not all of the affordable units will be clustered in one quadrant.
RESPONSE:
2.6 In or&r to ensure that the Citywidk residential quadrant caps, adopted thmugh
Proposition %” and the City3 Growth Management Ordinance m not exceeded, a
resfriction on the transfer of units between qua&ants is txxommendkd to be maintained
in the Inclusionary Ordinance. This standard is akko recOmmended to ensure that
inch&nary units are equitably distributed throughout all quadrants of the City, thereby
avoiding potential impact-km problems.
OIJJW’ION:
3. Section 21.85.120. Affordable Housing Standards.
a. Section 21.85.120(d) states that the City may impose more stringent
affordability standards for off-site developments than imposed for on-site
development. We do not understand the City’s position to potentially punish
a developer for providing a possibly superior affordable housing
development. The prohibitive cost of providing affordable housing is already
well known. If the inclusionary housing program is to work, the City must
provide flexibility and encouragement to the development conukmity. The
arguments for locating across quadrant boundaries also applies at this level.
For any number of reasons, an off-site development may be in the best
interest of the public, development community and City. This wording
suggests that offsite housing solutions suits only the developer and not the
community. It also sends the message that anyone proposing a combined
inclusionary housing project will be subject to additional costs.
RECOMMENDATION: It is recommended that this wording be deleted from
the ordinance.
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RESPONSE:
3.a The City has established location standards for inclusionary units, as discussed in
Response 2.a. The highest priority is for requited inclusionary units to be developed upon
the same project site as the proposed market rate units.
The provision stipulating that the City “may klutz more stringent affordability stand&&
for o$-site developments than are imposed when inch&nary units are developed on-site”,
is not a de facto statement that all combined inclusionary housing projects would be
subject to more stringent affordability standarcik Insteti, this provision would enable the City the opportunity to negotiate a higher percentage of affordable units, or lower housing
expenses, in circumstances when? it may be in the public interest.
OUFSI-ION:
3. Section 21.85.120(f) requires that there are no significant differences visible from
the exterior between market rate units and inclusionary units. It also states that the
size and design of the inclusionary units shall be reasonably consistent or
compatible with the design of the project and adjacent structures in terms of
appearance, materials and finished quality.
Does this mean that developments with single family homes cannot also include
multifamily rental units? The City has already acknowledged that higher density
multifamily projects will be necessary to provide the needed affordable units. This
subsection does not take this fact into account. It also provides strong ammunition
for adjacent residents to oppose affordable projects due to the lack of design or
architectural compatibility with adjacent units.
RECOMMENDATION: It is recommended that this sentence be eliminated from
the ordinance.
RESPONSE:
3.b This standard was not intended to diswunage the development of different product types
(i.e.; single family and multifamily) within a project, but rather to ensure that the &sign
and external appearance of inclusionary units would be rerrsonably wnsistent and
compatible with other market rate units of a similar product-@pe within a projct. In
order to clan! this standard objective, staflis recommending that Subsection 21.85.120(J)
be revised.
Staff also rccommendk that the rquirement that proposed inclusionary units be
architectumlly wmpatible with adjacent (off-site) structures be deleted. Subsection
21.85.170 (4) (0) of the draji Ordinance abeady spec$es that a proposed inclusionary
housing project shall not result in an overall development pattern that is incompatible with
other structures and land uses in the immediate vicinity. Architectural wmpatibility with
adjacent structures would be wnsickkd under this criteria for review.
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h
OUESI'ION:
4. Section 21.95.160. Incentives to Offset the Cost of Affordable Housing
Development.
This section specifically states that “nothing in this Chapter establishes, directly or
through implication, a right for a developer to receive any assistance or incentive
from the City or any other party or agency to enable him/her to meet the
obligations established by this Chapter.” The language in this section suggests that
the affordable housing requirement falls totally on the development community with
no responsibility on a part of the City. Specifically, this type of language suggests
no willingness on the part of the City to be a joint partner in providing affordable
housing. As emphasized by the Housing Element we believe that the City and the
development community should work together to provide affordable housing in
Carlsbad.
RECOMMENDATION: It is recommended that this sentence be eliminated from
the ordinance.
RESPONSE:
4. Staff recOmmen& that this Section be teyised to state that the City may make available
to the development community, incentives or financial assisfance to enable the development
of affordable ho&n& provided that resoutces ate available and m approved for such use
by the City Council.
OUESXION:
5. Section 21.85.170. Inclusionary Housing Project Application and Review Process.
a. Section 21.85.170(1)(D) allows the Planning Department 90 days to review
the inclusionary Housing Project submittal. In meetings with the City,
priority processing has been discussed as major incentive for providing
affordable housing. One of the programs of the Housing Element
recommends priority processing for affordable projects. We believe that priority processing is one of the most cost effective tools the City has and
that, in turn, is of significant fiscal importance to the developer.
RECOMMENDATION: It is recommended that this be revised to 30 days as
allowed for all discretionary project submittal.
RESPONSE;:
5.a l%e 90 day time limit i&n@ed in the Ordinance is not intendkd to be “the standard” for
processingp&minary project mikes. As soon as aklptxxedures for reviewing preliminary
applications (i.e.; nequeslk for density increases, Stan&i& modi$cations and j%ancial
incentives) have been established within the City, ptzliminary reviews shall be able to be
processed within a much more rwsonable time jkune (30 days). Until these pmedures
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have been worked out, staff recommends that it is in the best interest of the City to
maintain the 90 day time limit as proposed.
It is also important to note that the 90 day time limit for rwiew of preliminary
applications is included under Government code Section 65915.(d) of State Density Bonus
Law. This time limit is themfoore recommended to be maintained within the Inclusionary
Ordinance in order to be wnsistent with the Density Bonus Ordinance.
OUESI-ION:
6. Section 21.85180. Inclusion of Affordable Housing Agreement as Condition of
Development.
Section 21.85.180.(a) requires approval of an affordable housing agreement prior
to final discretionary approval of apartment projects. This places a significant
burden on apartment projects that could cause significant processing delays.
RECOMMENDATION: It is recommended that this requirement be tied to
building permit to add maximum flexibility.
RESPONSE:
Staff concurs with you and recommends the revision to Section 21.85.180 as suggested.
OUES’I-ION:
7. Section 21.85.240. Administrative Fee for Inclusionary Housing.
This section needs considerable clarification. Why should developers be charged an extra fee to administer affordable units?
RECOMMENDATION: It is recommended that additional clarification be
provided as to the impacts of this fee, its justification
and the amount of this fee for rental versus ownership
units.
RESPONSE:
As discussed in the staff report, the City will incur signi$cant costs associated with the
management and monitoring of inclushuwy units. These cosfs include: 1. the adminiWation of
various agreements (i.e.; Affordable Housing Agreements, Combined Inclusionary Housing
Agreements, Rental Agreements, For-Sale Agreements and Resakk Agreements), 2. qualifying
tenants and homebuyers, 3. setting rental rates and sales prices, and 4. rwiewing annual
monitoring reports.
The amount of the administrative fee (tental or for sale) has not been established as yet. The fee
will not be established until the new Housing and Redevelopment Director is brought on-board.
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When the amount of the fee has been determined, the fee shall be adopted through City Council
resolution.
OUESITON:
A: Section 21.85.040 dictates that inclusionary housing requirements apply to
residential development projects only. As we have previously mentioned, we feel
that employment opportunity is the greatest single contributing factor to the influx
of lower income level families. Commercial and Industrial projects should share all
obligations for affordable housing provision.
RESPONSE:
The City wncurs. Housing Program 4.1 specifies that the City shall conduct a study of the impact
of commercial and industrial development on housing demand and the ability of local employees
to afford local housing. Once this study is completed, the appropriateness of establishing a non-
residential housing impact fee would likely be examined. This non-residential housing impact fee
program is one of 50 total housingprograms which the City has committed to implement. While
this program is regarded as important insofar as helping to address the City% a$ordable housing
objectives, there are other housingprogtams (lndusionary Ordinance, Density Bonus Ordinance,
Development Standards Modi$cations, and Managed Living Unit Ordinance) which have been
assigned a higher priority. Based upon the workload at hanti, it is anticipated that work on this program would be initiated in 1993.
OUESTION:
B. Section 21.95.160 is disappointing in that it states that “nothing in this Chapter
establishes, directly of (sic) through implication, a right for a developer to receive
any assistance or incentive from the City... to enable him/her to meet the
obligations established by this Chapter.”
Stafis recommending that this Section be revised to state that the City may make available to the
development community incentives orfinnncial assistance to enable the development of affo&ble
housing, provided that tesources am available and are approved for such use by the City Council.
OUESI-ION:
C. Section 21.85.240 allows the City to collect a new tax on residential development,
an “Administrative Fee”, to alleviate costs associated with long term administration
of units provided under the ordinance.
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We have consistently warned that the inclusionary housing program will result in a huge, new administrative bureaucracy, whose job it is to provide governmental
regulation of the housing market, over some lengthy period of time. This concept
is very bothersome to use, and we find it particularly unfair to force developers to
build at a loss, subsidize the loss with inflated market rate prices, and then require
developers to assume the cost burden for a resulting bulky administrative
bureaucracy.
In summary, Aviara has concluded that the draft ordinance appears to make little
effort to fairly share the social responsibility with the community and government
for the provision of the affordable housing. In addition, we have little confidence
that the ordinance will encourage the development of affordable housing in the City,
but in fact frustrate the development of market-rate housing thereby exasperating
the affordability issue. ’
It is our recommendation that the City not adopt an inclusionary housing ordinance,
but rather work to cut costs by streamlining the permit process; eliminate layers of
regulations; and reduce development fees. Left to itself, the free-market system will
fill the niches of all levels of housing; government mandates only cause a shift of
the burden.
RESPONSE:
As discussed in Besponse 5. to Henthom and Associates, them will be significant rqxutsibilities
and wsts associated with the production and administration of a$ordable units. This is not to
assume that a “huge, new administrative bureQucracy’ will necessarily result. As an ahemative,
the administration of aflorxlable units wuld be subcontracted out to a third party (non-p&t
organ&ion).
It is important to understand that through expedited processing granting density bonuses,
development standards modi$cations, and financial incentives, the City will be making signi$icant
contributions to the provision of affordable housing opportunities. Whatever the City wntributes on a project-specify basis is in addition to the 200 a$ordable units which the City has committed
itself to produce by 1996.
Overall, the drsp Indus~~ry O&name, including proposed amendments, represents stz@ best
recommendation for enabling the achievement of the affordable housing objectives included within
the City’s Housing Element.
Based upon the existing significant affo&ble housing shor$aU within the City, there is no
evidence to support the wn&ttion thatfiee-market system (development industry) will voluntarily
produce housing a$ordable to all income classes if left to itself:
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WOODWARD HOMES
OUESI’ION:
In reading the Draft Ordinance I find it unclear as to which category either In Lieu
Contribution or Impact fee applies to an approved tentative map. I make reference to two
letteis (sic). Firstly, a letter from Herrick Development to Mr. Chris Decerbo (sic) City
Planning staff dated July 22,1992. Secondly, a response from Mr. Decerbo (sic) to Her-rick
Development dated July 28, 1992. Mr Decerbo’s letter makes reference to both fees but
falls short of stating which fee applies my CT 89-32 (sic). I have been informed by city staff that approved Tentative Maps that contain a condition requiring compliance with the
Inclusionary Housing Ordinance shall be only subject to the Impact Fee of $3,250.00.
Please take the ambiguity out of the wording contained in section 21.85.050 and 21.85.060 of this draft Ordinance document.
RESPONSE:
Section 21.85.060 of the Indusionary Ordinance has been raised to allow tentative maps, which
were not conditioned to wnstruct inclusionary units on the ground or pay in-lieu fees, and, am
approved for extension on, befor or a&r the e$ect;ve date of the Inclusionary Ordinance, to
sati$fi inclusionary requirements thmugh the payment of impact fees.
Consistent with this tewmmended revision, your tentative map extension would be subject to the
impact fee requirement.
OUESTION:
I further request you to consider exempting subdivisions of less than seven units due to due
(sic) extreme burden and fiancial impact that these fees make on the eventual home
buyers in small subdivisions.
RESPONSE:
The justi~ations for requiring new dktial projects of 6 or fewer units to pay in-lieu fees is
discussed in the sisgreport. In summary, the achievement of the a$ordali housing objedives
contained within the Housing Element, is dependent upon the implementation of the inclusio~ry
requirements prolursed (i.e.: wn&uction of aflomikble units, payment of in-lieu fees or payment
of impact fees) within the dkqfl Odinana.
Acknowledging that the in-lieu fee wuld pose a signi$cant economic butden to a developer, the
Ordinance would allow a developer subject to this fee to satisfy inclusionary requirements through
other alternatives (wnstruction of a$ordable units, combined indusionaiy housingpmject or other
in-lieu wntribution). CDd
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14
FIELDSTONE :: LACOSTA e
November 17, 1992
Planning Commissioners
City of Carl&ad 2075 Las Palmas Drive Carlsbad, California 92009
Re: Proposed Inclusionary Ordinance
Ladies and Gentlemen:
As you are aware, considerable discussion at your October 28, 1992, meeting prompted a continuance of the public hearing on the proposed inclusionary ordinance to November 18, 1992.
Since October 28, 1992, staff has suggested significant revisions to the bulk of the ordinance, primarily through the removal of a number of administrative rules which we had suggested could be ably addressed through implementing policies.
However, notwithstanding a universal desire to structure an inclusionary program which balances concerns expressed by all interested parties, one fundamental question has not been answered.
That question involves the factual basis and justification for allocating the overwhelmingly majority of the burden for providing new affordable housing units through the inclusionary program to new, residential development, without any allocation of any portion to non-residential development, and without an acceptance by the City of what could be a very significant responsibility as well.
We recognize that at your October 28, 1992, meeting, staff referred to and incorporated into the record the July, 1990, Regional Housing Needs Statement San Diego Region, published by SANDAG and commonly referred to as the SANDAG Study, as the "nexus study" justifying the proposed regulations.
P.O. Box WOO-2hh + C,lrld-ud. C.4 TO I rl 6 !I I ‘LL)7 I X-17 + F.1.Y h I W? I - I%46
Planning Commissioners City of Carlsbad November 17, 1992 Page 2
Our review of this document generates an additional concern which we have not previously raised, as we were unaware that the City was going to cite the SANDAG Study as a principal source.
Our issue is simple. In reviewing the SANDAG Study (Table 60, copy attached) it is apparent that of the total fair share goal (households) of 9,000, new development generates a need of only 773 (9%) for the five year period. Therefore 91% of the need has been generated by past inability or inactivity.
If this exact percentage were applied to any of the fair share figures being discussed, new development's share would be greatly reduced. As an example, the 5-year, fair share allocation of 1,400 units would mean that all new development would be responsible for only 126 units.
We recognize that the City, on its own, cannot take the responsibility for 91% of the units, especially in today's economic times. We also recognize that some reasonable portion of the need should fall on new residential development. Hopefully, your proposed linkage fee study will result in an equitable spread of the mitigation costs to meet the City's goals. Notwithstanding that effort, we would like the City to be on notice that we feel an inequity would s,till exist after a linkage were implemented and that we hope the City will be most reasonable and flexible as we discuss a specific program for the Fieldstone La Costa Master Plan. We feel strongly that the City simply cannot transfer their 91% of the problem to new residential development when we generate 9% of the impact.
In conclusion, we desire to work closely with the City to develop an Inclusionary Housing Program for our project which gets as close to the goal as possible but is actually attainable. To develop any affordable housing units at all will take ultimate cooperation,of both the City and private sector. We feel today that 15% low and 5% moderate requirement on new residential development is unfair
Planning Commissioners City of Carlsbad November 17, 1992 Page 3
and in the final analysis, in its own, not realistic. But we do agree to work diligently on a program for our project which will get as close to the goal as possible.
Sincerely, R? UG AVIS
DA:jb
c: Ron Ball, City Attorney Karen Hirata, Deputy City Attorney Gary Wayne, Planning Department Dennis Turner, Planning Department Chris DeCerbo, Planning Department Mike Stewart, The Fieldstone Company James E. Erickson, Esq.
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DATE: NOVEMBER 18, 1992
TO: PLANNING COMMISSION
FROM: PLANNING DEPARTMENT
SUBJECX RESPONSE TO FIELDSTONE% LE3TF.R (1 l/17/92) REGARDING THE
PROPOSED INCLUSIONARY ORDINANCE
Fieldstone’s statements concerning SANDAG’s fair share numbers are generally correct.
However, any discussion of the fair share numbers relative to the Regional Housing Needs
share for the City and the proposed inclusionary requirements are irrelevant.
Specifically, the fair share requirement has nothing to do with the construction of dwelling
units, but instead has to do with the provision of housing assistance (for example: rental
subsidies) to households. The State of California (HCD) does not even acknowledge the
concept of fair share relative to satisfying Regional Share Needs. In fact, the provision of
rental subsidies will not count towards satisfying Regional Share requirements.
While the fair share number does take into account a jurisdiction’s past performance
relative to the provision of assistance to lower income households, the Regional Share is
based exclusively upon future housing needs and a jurisdiction’s commitment to responding
to that need.
In conclusion, the fair share number (1125 lower income units) is not, and has never been
the basis for the City’s proposed 15% inclusionary requirement. The 15% inclusionary
requirement is one of many housing programs to be implemented for purposes of achieving
the City’s Regional Housing Needs (Total of 6,273 units) including: 1,443 very-low income
units, 1,066 low-income units, 1,317 moderate income units, and 2,447 upper income
units. Based upon this goal, the total demand for lower-income units is 2,509 units (1,443
+ 1,066) or 40% of all future housing developed within the City by 1996.
In view of the fact that the Regional Need for lower-income housing within Carlsbad and
San Diego County is 40% of all total future housing produced, the 15% inclusionary
requirement on new residential development clearly does not represent an inequitable or
unreasonable burden. -
The City has also committed to make a good faith effort to the development community
to provide incentives (density increases, standards modifications, expeditious processing)
and financial assistance to enable the development of affordable housing, which should
reduce the burden on the residential development community.