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HomeMy WebLinkAbout2016-09-22; Housing Commission; MinutesMinutes of: Time of Meeting: Date of Meeting: Place of Meeting: CALL TO ORDER HOUSING COMMISSION 6:00 P.M. SEPTEMBER 22, 2016 COUNCIL CHAMBERS Chairperson Igoe called the Meeting to order at 6:00 p.m. PLEDGE OF ALLEGIANCE Commissioner Newman led with the Pledge of Allegiance. ROLL CALL Present: Commissioners: Susan Igoe, Chairperson Arline Carrillo Alan Newman Shaunee Williams Absent: Joy Evans Staff Present: Housing & Neighborhood Services Director: Debbie Fountain Senior Planner: Scott Donnell APPROVAL OF MINUTES Minutes of July 14, 2016, were approved as written. ITEM NOT ON AGENDA There were no items not on the agenda. NEW BUSINESS Debbie Fountain, Director of Housing & Neighborhood Services, said the Housing Commission has before them the draft Housing Element to be presented by Scott Donnell, Senior Planner. This will be an update and workshop, no action needed. Mr. Scott Donnell gave his presentation on the Housing Commission. Robin Ferencz-Kotfica, 7015 San Carlos St, resident of Lakeshore Gardens. I am here today with some neighbors and we have copies of some concerns. Chairperson Igoe said the Housing Commission has already received that. Ms. Ferencz-Kotfica thanked Mr. Donnell for the presentation. We would like to thank the Housing Commission for inviting us. The residents of Lakeshore Gardens mobile home Park, which is a senior community, have concerns about the future. We would like the Housing Commission and ultimately the City Council to consider our views. In order to conserve existing affordable housing, the City of Carlsbad HOUSING COMMISSION MINUTES September 22, 2016 PAGE 2 of 8 should make a reasonable effort to assist those for whom the affordable housing alternatives were established. This effort should include establishing a rule for rents for residents disabled, for low income families and others living in the zones designated as affordable housing may not be rent increased by landlords, but should be limited to price index increases. This rule should be included in the Housing Element. Also, if landlords fail to comply with this reasonable request, those properties designated as affordable housing should be subject to eminent domain takeover by the city. And management of those properties should be supervised by the City of Carlsbad's Department of Housing and Neighborhood Services. In the interest of preserving the health and safety of the protected class of people living in affordable housing, managers of the affordable housing properties should be required to provide resource referrals to any of them needing assistance regarding their health and safety. They should personally connect their clients with the County of San Diego Aging and Independent Services and they should all have their phone numbers, and the City of Carlsbad Housing office and have their phone numbers available where appropriate. Thank you. Michael Mcsweeny -senior public policy advisor of the local Building Industry Association. The city shouldn't craft a housing element just to pacify a city, but it should address the real housing needs of the city. I believe that 70% of the people who work at Carlsbad live outside of Carlsbad. We need to attain housing for working persons in Carlsbad, and this shouldn't be solely through public subsidized housing as it only makes all housing more expensive. Scott touched on affordable housing earlier. I want you all to understand that it is publicly subsidized. We are taking from one group of people and making them pay for the people who can't afford it. I did some spot checking on the site inventory, Appendix B to see what staff is listing as underutilized and how realistic those units may apply. I gave you some pictures; the first one is of the Army Navy Academy. Staff suggests that could be converted to 100 units of moderate housing. It is about 10 acres. It is also part beach front property. Conservatively, this type of land is worth about 5 million dollars an acre. Therefore, that is about 50 million dollars of land yield and you divide that by a 100 units so right off the bat your land costs for a 100 units of moderate housing is a half million dollars per home. Part of this property is actually beach front, and when you look at the houses next to it, they range anywhere from $2,000,000 to $8,000,000. The next picture is the one where it is the Village Apartments and right in the middle there is a red circle around some. The Village Apartments is right next to the red circle. That is an existing 98 unit apartment project, and the staff says you can add 124 additional units. Now looking at the picture, you know you have to go in buy the project, scrape the existing units to add the 124 to the 98 to make that available. In today's market, those units would sell for between $275,000 to $325,000 a unit, giving this project value somewhere between $26 to $32 million dollars to buy it and tear it down. So what are your land costs then over 200 units? Again if you are going to put what staff says there very low income housing that requires the maximum subsidy. So we may very well, if we follow the staffs recommendation, build 200 units on that project at a subsidy level of $300 and $500,000 per apartment. I don't think this is a reasonable solution. Next to that is circled in red is their 9 duplexes. Staff says we can add another 26 units. Again, this doesn't pencil for the same reasons. Lastly go to the last page and that is the one that has all the prices, a screen shot from Zillow that I took this morning. On Jefferson and Harding Streets they circle that and say we can put 140 units there. A 140 homes at low income, 38 properties, depending on if you are looking at Zillow or Trulia; Zillow is an average of about $775 each and Trulia is about a million dollars each. So that is a property base, just for the land, $29 to $38,000,000. My question is, are these appropriate? These are all west of the 5. HOUSING COMMISSION MINUTES September 22, 2016 PAGE 3 of 8 For the folks that are low income, we are trying to help them, it doesn't make sense to buy the most expensive land in the city to do this. There is also several pages in the Appendix that have existing uses of commercial and industrial residential, all of which have extremely low probability of producing housing units. The math doesn't work. I know that Housing Elements should include the conversion of existing uses of residential, but the city shouldn't rely on it to meet RHNA numbers. Basically what I am saying is the city should rely on what is reasonable that the market would do, not theoretically. In my experience, very few of these properties convert since the economic value is maintained and will not drop to a level that makes sense to convert. Only those areas where blight or truly underutilized sites get converted. The barrio has a good chance, but will take a long time. Another point to consider is it is almost impossible to max out the density on a project because there is a slew of regulations; state driven, local driven or Federal driven, like parking, water quality. The two things that are driving now are not what the zoning is, but how you comply with greenhouse gas and dealing with storm water. Those two things trump zoning because you have to meet those first before you get permission to build. The three examples I gave you require massive public subsidies to build. So I don't see this as a reasonable way to meet your RHNA numbers for low income housing. I want you to understand who pays for the subsidy, it is the market rate builders. So when the market rate builders build homes, they do inclusionary on site and I handed you out a handout from the Point Nazarene study, I think go to page 37, that deals with Carlsbad. The average cost of a house in Carlsbad, 18% of it covers affordable housing, inclusionary housing. So a new home in Carlsbad, a $850,000, 18% of that is $152,000. For a new home buyer, a $152,000 of the expense of their new home goes to cover the city's affordable housing program. Whether it is through in lieu fees or off-sighting or just basically absorbing it into the property. So if I am selling $850,000 property and 15% have to be low income, they are sold at a much reduced price and that difference is paid by the surrounding homeowners. Finally staff brought to you in September 2014 a proposal to add a $20 per square foot fee for apartment construction. Apartment construction is the entry level housing. When we were all young, where did we go when we left college or our parents' house? We went to an apartment, because in California we don't have basements so we can't live in our parents' basement because they don't have one. So this fee would add over $18,000 to the cost of the typical two bedroom, 900 square foot apartment. The city's consultant admitted at the hearing in September 2014 that it adds about $90 to $100 per month to the rent. Right before the General Plan was adopted last year staff withdrew a number of sites that could have accommodated residential uses if the zoning was changed. Not just one or two availabilities. When you look at Appendix B, there are a lot of sites you could do very low income in. It is not efficient to build lower income affordable projects at the lower numbers. If you want to achieve 75 to 100 minimum, but 100 and 200 minimum is the sweet spot; the most efficient to build, and more importantly the most efficient to manage and maintain. The lower the number, the higher the management compliance and maintenance costs are. Therefore, the delta, the gap that needs to be publicly financed, is larger. In order to do this, we would ask the city to do it smart. Don't pick the most expensive, quite frankly the beach properties where it is obscenely expensive. The BIA feels that the staff should review and put these types of cited properties that were in their inventory before.the General Plan was adopted. Because those types of changes you wouldn't see happen. Because right now there are sites in this city they may be zoned commercial, they may be zoned industrial; they have been zoned that way for 30 years, and nobody has built on it. So I ask yourselves the question, why? Because they don't pencil out, they don't make sense. Since nobody is inventing more land in Carlsbad, let's take the land that has been underutilized for years and think HOUSING COMMISSION MINUTES September 22, 2016 PAGE 4 of 8 about a way to repurpose it. I think the city could achieve their RHNA numbers quicker, and we can get people who truly need housing into it that is publicly subsidized in a more efficient way. Finally, what Scott said when the housing growth is less, I think it is not that the growth is less, demand is higher. When you look at the millennials, they are a larger generation than the baby boomers. In five to seven years from now these folks will come and they are going to want to buy a house, they are going to want to have what we have. It is not going to be available simply because of supply and demand. I would ask that staff consider our suggestions and if any of the Commissioners have any questions for me, I would be happy to answer. Edward Gerber -we are doing a project on Carlsbad Village Drive at Denny's; 16 affordable housing units, 90 market rate units. I have been in the review process with the city for 17 months now. I am hopeful to get to a public hearing soon, which is still undocumented. One of the constraints, regulatory constraints. When you are on top of a former gas station it should be easier to get approved. We need to make it easier to get through the process. The Housing Element should also be part of the public review. Having said that, Carlsbad is a great city, there is a lot of good energy. I am hopeful and happy. I am from the Gerber Group, gerber-group.com. Martin Dizonis, local homeless -housing stuff is really hard to find around here. I know several people who have been through the entire section 8 process, which takes a long time. They bring their vouchers into Carlsbad. I know these guys got subsidized as long as they gave them this stuff. Subsidies don't happen, is there some kind of recourse for people who are getting rejected for Section 8 vouchers or VA vouchers? Ms. Fountain -you can come to our office, Housing & Neighborhood Services Office, and we can try to answer those questions. We do have some advisory groups that can help out with housing counseling so if you are getting denied based on discrimination we can help you out with that. Chairperson Igoe opened to the commissioners. Commissioner Newman -question for BIA, as a former home builder I can relate to what you said to how things are, but it is one thing to say, and I agree with you on some of your commentary, but I think the BIA needs to say, here is what you should do, this is how you should do it. We go a long way to helping the city to find things. You can't criticize the city about what they do. Mr. Mcsweeny said he would agree with the comment, and I would ask Debbie and Scott to put together something or do you want me to put together a group of individuals and give you what we feel what our best guesses would be. Ms. Fountain said we have been meeting with the BIA, but we haven't discussed this specific issue, but if you have any input, we would be happy to take that input. Mr. Mcsweeny directed a comment to Mr. Dizonis. Sir, the public subsidy I referred to is not money from the government given to the builders. Mr. Dizonis said public subsidy by definition is from government. Mr. Mcsweeny said let me call it something else. It is an exaction placed on the builders. HOUSING COMMISSION MINUTES September 22, 2016 PAGE·S of 8 (More discussion from the audience, not recorded) Ms. Fountain said Mr. Donnell may have additional comments. Mr. Donnell said there were a number of sites considered in our industrial areas when the City Council adopted the General Plan last year. They are not only in industrial areas, they are in other areas of the city as well. The city did approve rezoning for some of them with higher densities. The City Council chose not to approve some of them. I think that is the reason why our housing sites inventory does not need to be updated. First of all, it reflects recent action the council just took within the past year. Secondly, it shows that we meet our RHNA and there is no need to go back. Chairperson Igoe asked if anyone else has a comment or question. I just have one comment. The picture I got in my head of the housing in the industrial parts of the city as opposed to downtown, is the services that are readily available to low income folks; beach front or not, I hear what you are saying. I get the idea of the projects. I wouldn't wanMo see all of the affordable housing put into one single place where it is labeled unsavory or whatever. Mr. Mcsweeny said I agree with you. I don't think our position is that it should be tucked away in some corner somewhere. The purpose of inclusionary housing, which I will say the industry disagrees with, because the intent is to put everybody together; it is not an efficient way to deliver it. When you talk to affordable housing developers, their tenants require different services than market rate people. Doing it on a smaller scale is not efficient because you cannot deliver the services that are needed. What we have tried to do is meet with cities and explain to them, from a developer housing point of view, let's do this in the most efficient way possible so we can give you the best project. There is one thing that Debbie has branded into my brain, I don't want your money, I want your units. If we are going to do this, let's do it the smartest way possible. If you are going to require us to do this, then you have a moral obligation to do it the most efficient way possible. It doesn't make sense to do a project where the subsidy is $250,000 or more to where if we can find a better way to build a 100 units somewhere instead of 12 there, 7 here. That is not efficient. You get that subsidy down because what happens is if you are going to ask us to put money in to subsidize something, you want to stretch the dollar as far as you can. Because the farther you stretch it, the more roofs over people's heads. That is what we are about. If we are going to do this, it is the law of the land in your town, we are not pushing to overturn the law, but what we are pushing for is to make this as efficient as possible. Let's go back to the Army Navy site, that is 10 acres, but we are only going to do SO houses. Quite frankly, that property should be denser. What you can do is put some more market rate development on it, on the beach, you want to sell those units for two to five million dollars because those houses are going to help subsidize your affordable component which you can do with that 10 acres. But to do just 50 houses there is not efficient. Since they are not making any more land, and they are not making any more beach front property, you want to maximize it. The city has to think like a developer would think. What is the best way to use this land? So if you have an industrial land that nobody is using for 30 or 35 years, could we do something with this. What are the employment opportunities around that site? Maybe some of those people could work there. We will put together a small group of people who have an interest in Carlsbad and we will sit down and look at your list and we will huddle up and we will offer some comments. Commissioner Williams asked what organization Mr. Mcsweeny is with. HOUSING COMMISSION MINUTES September 22, 2016 PAGE 6 of 8 Mr. Mcsweeny answered the BIA, the Building Industry Association, it is a trade association of people in the building and development industry. It is everybody from carpet layers, developers, drywallers, title people. Ms. Fountain commented that the BIA and the city don't always agree on how we should be going about doing our business, but the BIA has been good partners with us and has helped us to build the units we have currently in Carlsbad. It doesn't mean that they always like that they have to build and subsidize, but I can say we have had a long history since 1993 when we adopted the ordinance. And we would not have been able to get those units built if we didn't have cooperation from the private builders. Even though we may publicly disagree at times, when it all comes down to getting it done, the private developers always get it done. So it is just a question how we go about doing that; what kinds of things can we offer; what kind of standards modifications can we give; what can we do to lower that overall cost of the land. We have to understand in Carlsbad, the land is expensive. It is always going to be expensive, it is a coastal city. The reality is, where is the best place to put the housing? The best place to put the housing is where there is vacant property. There may be some cases where acquisition and rehab is going to be the most affordable model. We look at all of those opportunities in the housing element to how we come about how we do our affordable housing. There is a number of programs that are in the Housing Element, it is not just the inclusionary program, so we are always looking for those opportunities and when we get very creative and innovative developers that are willing to look at those with us, we come up with some ideas. The goal always is we want the units to provide the housing. The money just coming to the city and then staff trying to figure out how to spend it is really not the best way to do it. We can't buy land cheap. We need the private sector. Chairperson Igoe asked if there are any other comments. Rob Merits -as a tax payer and resident of Carlsbad, I am sure the gentleman here from BIA has some good input. The BIA is driven by profits so they want to add 100 units in a high dense area and don't care about traffic and all the negative that goes along with it. They are developers and they are coming from outside and the City of Carlsbad is a gold mind for developers. As you do the Housing Element the tax payers are the ones paying your salaries not BIA. Richard Foster representing the Community of Christ denomination. We rent the chapel and we feed about 50 to 100 homeless people every Sunday morning, no shelter. Even though we have Father Benno's, we need more. The subsidy with the new builders can they go to purchase land, there is an empty property on Chestnut and Harding, great spot for a homeless shelter. We have Escondido doing a lot of work for homeless, we have different places around, but we don't seem to have anything that meets the needs of the homeless right here. There are other organizations that feed the homeless. They get harassed on the streets and the parks. It seems like such a big need for all of us working in that area. Commissioner Carrillo -the project for the homeless veterans the city has been thinking. The city has thought of homeless. They are building a project for veterans that are homeless. Mr. Foster asked where? HOUSING COMMISSION MINUTES September 22, 2016 PAGE 7 of 8 Ms. Fountain -we are still in the application process for two sites in the village barrio area; one on Harding and one on Oak that we are looking at right now for homeless veterans and also veterans' families. Chairperson Igoe said there are notices on the properties. Ms. Fountain said it is in the application process. We are very aware of the homeless issue in Carlsbad it is growing California wide. We understand there is a big need and we are addressing it. We do have it on our radar. It will take coordination with all the other social service agencies and others out there doing the work. Secora Anderson -thank you for the housing. I have been a housing advocate for 25 years. I am on the Board of La Posada Guadalupe, which is a homeless shelter here in Carlsbad. We do have a lot of homelessness in the downtown area. The city is very much aware of that. We are hoping to be a solution to the problem. The Carlsbad Police Department many times pick up homeless and takes them to La Posada. The main problem of homeless in Carlsbad is the substance abuse and mental problems. La Posada gives them shelter. More often than not, they are there for a night and they don't want structure or they don't want to give up their abuse behavior, substance abuse. That is the issue in dealing with the homeless that you see in our streets now. I am hoping to be part of the solution with Debbie and a lot of other community advocates in dealing with the homeless issue. The city has made big strides since I became a housing advocate 20, 25 years ago. I would really like to thank all of you and your diligence and being concerned about it. We do have a lot of seniors as well that are being helped with the housing situation. Scott, you mentioned the price of land has increased from 2011 to now. Do we have a percentage of that increase? I can tell by what houses were selling for years ago and what they are selling now. I live in a manufactured home and it has increased. I own the land that is the big difference. Mr. Donnell - I do not have specific figures for you. Martin Dizonis -again the Army Navy Academy model seems ridiculous since they just spent fifty million dollars on the stadium. Second point is the generalization about homeless people is not entirely accurate. A lot of people when they become homeless, the young people are afraid to go to sleep because they may lose something or get attacked so they do meth so they can stay up. It is scary for them. There are other situations, people drink because they have to deal with everything. You are at the bottom end of everything so you want to take your mind out of it for a little bit. Most of the people who are out there are not out there because they have substance abuse issues, though there are some that are, or mental issues. I am a marine veteran and a displaced worker. I drink now because I have to deal with sleeping under a bridge and spending all day in the park wondering if a cop is going to come up and give me a ticket for sitting somewhere. Carlsbad PD hasn't been kind to the homeless until recently. You talk of La Posada, La Posada is a great facility, but they are not close to food facilities. They don't give bus passes so how do you get back into town. Secora Anderson -La Posada, our men get 3 meals a day. If they are working, they get a sack lunch to take with them. We have 8% of our intake are veterans and we are working with them to find them permanent shelter. A lot of them don't realize that they do have benefits coming to them. We have been able to help them find the benefits and permanent housing. I have eight brothers and five have served in the military, and I know what they came back like. They do get shelter, they do get meals three times a day. We have bus passes for anyone who needs them. We do an annual Thanksgiving HOUSING COMMISSION MINUTES September 22, 2016 PAGE 8 of 8 dinner for them, we give them backpacks with shoes and socks. La Posada is for anyone who wants to go there and be part of a community and transition into a community. Not just to be there, but it is shelter for people who want to help themselves transition into a community. If you need a bus pass, a meal, there is a cook 24-hours. Ms. Fountain -we all know the homeless issue obviously is a very serious one and there is a lot of passion around the issue. One of the issues we will be looking at as we move forward in developing a strategy is part of that process, learning more about what the needs are of the homeless, and making sure they have the resources they need specifically. We appreciate the feedback, but tonight is not intended to be a debate over this issue. Chairperson Igoe asked if anyone else would like to speak. Mr. Dizonis asked if the transcripts will be available to the public. Ms. Fountain said they should be available to you. Chairperson Igoe I appreciate everyone who came out tonight. It was a very learning experience Commissioner Carrillo said thank you for your insight. Chairperson Igoe said we appreciate everything. The Housing Commission for September 22, 2016, was adjourned at 7:12 p.m. Respectfully submitted, Deborah Fountain Housing & Neighborhood Services Director PATRICIA CRESCENTI, Minutes Clerk MINUTES ARE ALSO TAPED AND KEPT ON FILE UNTIL THE WRITTEN MINUTES ARE APPROVED.