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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 1 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 2 .- 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. 5 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. 7 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. 8 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. 9 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$cations and j%ancial incentives) have been established within the City, ptzliminary reviews shall be able to be processed within a much more rwsonable time jkune (30 days). Until these pmedures 10 have been worked out, staff recommends that it is in the best interest of the City to maintain the 90 day time limit as proposed. It is also important to note that the 90 day time limit for rwiew of preliminary applications is included under Government code Section 65915.(d) of State Density Bonus Law. This time limit is themfoore recommended to be maintained within the Inclusionary Ordinance in order to be wnsistent with the Density Bonus Ordinance. OUESI-ION: 6. Section 21.85180. Inclusion of Affordable Housing Agreement as Condition of Development. Section 21.85.180.(a) requires approval of an affordable housing agreement prior to final discretionary approval of apartment projects. This places a significant burden on apartment projects that could cause significant processing delays. RECOMMENDATION: It is recommended that this requirement be tied to building permit to add maximum flexibility. RESPONSE: Staff concurs with you and recommends the revision to Section 21.85.180 as suggested. OUES’I-ION: 7. Section 21.85.240. Administrative Fee for Inclusionary Housing. This section needs considerable clarification. Why should developers be charged an extra fee to administer affordable units? RECOMMENDATION: It is recommended that additional clarification be provided as to the impacts of this fee, its justification and the amount of this fee for rental versus ownership units. RESPONSE: As discussed in the staff report, the City will incur signi$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. 11 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. 12 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: 13 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 zcA916atb 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. . . ._ ” - .- wwww0wwuu~~~wwww*ww ~~u&w$e-~*w~~ww~uwww~ (CH 2 G WW~a?mWW*W , .f w i c3 0w~w~*wwu~w~wQ~oauuw 0w~uw0wm~oaw~-uumwwu o~ow~~~~w~u~wwauauaywaw UC 00” cu’ 64 ice’ 6 2 ,-;;r*w-,- i m ?SYIYS?YY?YYS?tS??- -~0uue90HOOIuep~Ouas M ‘, ~uaw~w~~~w~c9w7wu0uwO uO~w~~wuw‘wNuJww~fwww uamawa w aa o,u,(3 mauacI) oa~amaw, w, wamaeY Wbr( (3ww 13- i b*P*-*~ 1 Q! c? ? eq. Y Q! ey. 1 q c? Y ‘s s ‘c. s Q! 1 H w~~ouu~ouoorury~oui r( . . . . . . . . . . . . . . -uec)w WWLC ccc Ef mm- 000 ouu t I t t 1 t a 1 I E I I E I I f: I I I 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.