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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. \\ 6N 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 2 JEA E M. LEONCINI, City Clerk