HomeMy WebLinkAboutCC Resolution 11942 (Affordable Housing In-Lieu Fee)RESOLUTION NO. 11942
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SAN RAFAEL RESCINDING
RESOLUTION NO. 7883 AND ESTABLISHING AN AFFORDABLE HOUSING IN -LIEU FEE FOR
DEVELOPMENTS WITHIN THE CITY OF SAN RAFAEL EQUAL TO $236,000 FOR EACH
AFFORDABLE HOUSING UNIT AND PROVIDING FOR ANNUAL ADJUSTMENT OF FEE
WHEREAS, the San Rafael General Plan 2020 sets forth the relationship between future
development and the need for new housing affordable to very -low, low and moderate -income households;
and
WHEREAS, the San Rafael General Plan 2020 in Housing Element Policies H-19 and H-24
requires the contribution of affordable housing units by developers of new residential and non-residential
development projects; and
WHEREAS, the San Rafael General Plan 2020 in Housing Element Program H -9c calls for the
option to accept fees in -lieu of the creation of new affordable housing units, with such in -lieu fees being
dedicated and used by the City for the creation, rehabilitation and acquisition of off-site affordable housing
units; and
WHEREAS, Section 14.16.030 of the San Rafael Municipal Code establishes requirements for the
provision of affordable housing units by new residential and non-residential development projects and
Subsections F, 1(3) and 1(4) state that an in -lieu fee will be established by resolution of the City Council;
and
WHEREAS, the City Council finds as follows:
A. State Housing Law (Government Code Section 65580) states that local governments have a
responsibility "to facilitate the improvement and development of housing ... [for] all economic segments
of the community"; and
B. The recently adopted General Plan 2020 identifies a shortage of housing affordable to very -low or low-
income households, finding that:
• Almost one-third of the households currently residing in San Rafael are either very -low or
extremely -low income, and about one-half of the households currently residing in San Rafael are
low-income households.
• Market -rate housing is not affordable to low and very -low income households, which must rely on
multi -family housing with some public subsidy to afford to reside in San Rafael.
• Single-family homes are only affordable to above moderate income households, with the median
priced single-family home in San Rafael selling for over $640,000 in 2000, requiring an annual
income of above $125,000 to purchase such a dwelling.
• The vacancy rate for market -rate rental housing was 1.2 percent in December, 2000, indicating a
very tight rental market which allows for higher rental rates due to limited supply and high demand.
• San Rafael lacks additional vacant land, requiring the reuse and redevelopment of underutilized
properties to achieve increases in housing, which increases the costs of development and thereby
purchase prices and rental rates.
• The lack of local, affordable housing contributes to traffic congestion within and through San Rafael
due to the need for lower -wage workers to commute from outside Marin County to jobs in San
Rafael.
• The State -imposed Housing Needs Determination for the period from 1999 to 2007 mandates the
planning for 2,090 additional housing units in San Rafael, 1,214 of which are to be affordable units.
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Through 2003, half of the eight-year planning period, 638 new units had been constructed (30% of
required) and only 353 (29%) of the required affordable units had been constructed.
The State Department of Housing and Community Development conditionally approved General
Plan 2020 on December 29, 2004, stating that "Aggressive and effective implementation of
strategies to promote housing development, particularly in commercial zones, is necessary to
ensure San Rafael can meets its projected housing needs."
The purpose of the in -lieu housing fee is to help provide affordable housing units which require
public assistance in situations where it is infeasible or impractical to construct such units onsite;
and
WHEREAS, Resolution No. 7883, previously adopted by the Council to provide for the calculation
of an in -lieu fee for residential development projects which did not provide the required number of
affordable housing units, has not proven to be a satisfactory methodology for the calculation of affordable
housing in -lieu fees; and
WHEREAS, the City Council determines that the affordable housing in -lieu fee shall be based on
the difference between the cost to construct a residential unit, including the costs of site improvements,
off-site improvements and land, and the affordable price at which it could be sold or rented. This
affordability gap was analyzed for a range of rental and ownership housing developments constructed in
Marin County in the "Commercial Development Linkage Fee for Affordable Housing" by David Paul Rosen
and Associates (2002) and the "County of Marin Inclusionary Housing Study' by David Paul Rosen and
Associates (2003), summarized in Exhibit A. The City Council wishes to adopt an in -lieu fee based on
these assumptions and annually adjusted for inflation in construction costs and land values.
NOW THEREFORE, BE IT RESOLVED that the City Council of the City of San Rafael hereby
adopts this Resolution, rescinding Resolution No. 7883, establishing a new affordable housing in -lieu fee
equal to $236,000 for each affordable housing unit required to be provided by Section 14.16.030 of the
San Rafael Municipal Code, and providing for annual adjustment of the fee based on the changes in the
McGraw Hill Engineering News Record Construction Cost Index for the San Francisco area, or
comparable index as selected by the Community Development Director, and the annual change in median
home sales prices in San Rafael. The annual adjustment shall be weighted using 25% of the median
sales price change and 75% of the construction cost index change to approximate the affect of changes in
land value and construction cost in the cost to produce residential units.
I, JEANNE M. LEONCINI, Clerk of the City of San Rafael, hereby certify that the foregoing
Resolution was duly and regularly introduced and adopted at a regular meeting of the Council of said City
on Monday, the seventeenth day of April, 2006, by the following vote, to wit:
AYES: COUNCILMEMBERS: Cohen, Heller, Phillips and Mayor Boro
NOES: COUNCILMEMBERS: None
ABSENT: COUNCILMEMBERS: Miller
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JEA E M. LEONCINI, City Clerk