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HomeMy WebLinkAboutCD Measures to Facilitate Housing Development & Streamline Approvals PPTInformational Report on Potential Amendments to the San Rafael Municipal Code to Encourage Development and Streamline Approvals San Rafael City Council September 8, 2020 Roadmap 1)Report Background 2)Inclusionary Housing 3)Density Bonus 4)Design Review Board 5)Amendments to SRMC 6)Discussion & Feedback San Rafael City Council September 8, 2020 1) Report Background Background Comprehensive Report to City Council on Housing-August 20, 2018 Staff Directed to follow-up on four topics: •Renter Protection •Short-term Rentals •Housing for an aging population •Challenges to approving and developing housing Report on Challenges to Approving/Developing Housing –September 4, 2019 Purpose: Informational report identifying challenges, which included: •Stakeholder interviews, research, gathering best practices, data collection •Identified 11 challenges •Identified 13 recommended measures and actions to consider San Rafael City Council September 8, 2020 Housing Work Plan January 21, 2020-City Council approved Housing Work Plan outlining 15 Policies to incentivize and streamline housing development: •6 policies implemented to date (Policies 1-6); •5 policies proposed in this informational report (Policies 7, 8, 11, 12, & 15) •2 policies under development (Policies 9 & 10) San Rafael City Council September 8, 2020 Community Engagement Housing Work Plan Development •3 City Council meetings •2 Housing Community Workshops “Strawman” Draft Proposal •One-on-One meetings with interested community stakeholders; •Presentations to Marin Environmental Housing Collaborative and San Rafael Chamber of Commerce Governmental Affairs Committee (including representative of the Marin Builders Association) Planning Commission-August 11th, 2020 •Present an earlier version of this informational report •Feedback included after each policy discussion San Rafael City Council September 8, 2020 Community Survey Partnered with ZenCity to conduct simple 10-question survey Conducted between July 31st to August 19 Survey in English and Spanish, released through Snapshot, Nextdoor, Facebook, and Twitter 162 resident responses San Rafael City Council September 8, 2020 Community Survey-Key Findings 1.Near consensus from respondents on need for more affordable housing •80% of San Rafael residents responding to survey believe there is a need for more affordable housing 2.Mixed response on allowing an in-lieu fee •43%-No •36%-Yes •19%-Unsure 3.Respondents supported denser development citywide Where should the more housing & mixed-use be allowed? (multiple choice) •42%-Citywide •34%-Downtown •23%-Canal How do you envision these developments? (multiple choice) •52%-2-4 story mixed use •39%-Duplex/Triplex/Fourplex •31%-5-8 story Town Center San Rafael City Council September 8, 2020 2) Inclusionary Housing Policy Background Current Inclusionary Housing Requirement 2-10 Units 11-20 Units 21+ Units 10% BMR Minimum 50% of BMR units affordable to Very Low Income households; remainder affordable to Low Income households 15% BMR Minimum 50% of BMR units affordable to Very Low Income households; remainder affordable to Low Income households 20% BMR Minimum 50% of BMR units affordable to Very Low Income households; remainder affordable to Low Income households 2-10 Units 11-20 Units 21+ Units 10% BMR Minimum 50% of BMR units affordable to Low Income households; remainder affordable to Moderate Income households. 15% BMR Minimum 50% of BMR units affordable to Low Income households; remainder affordable to Moderate Income households. 20% BMR Minimum 50% of BMR units affordable to Low Income households; remainder affordable to Moderate Income households. Rental For Sale San Rafael City Council September 8, 2020 Current Affordable Housing In-Lieu Fee San Rafael City Council September 8, 2020 Current Inclusionary Fee: $343,969 per unit •Set in 2006 at $236,000 per unit •Adjusted annually to account for inflation in housing and construction costs. •Paid at same time as Building permits fees Fee amount reflects the “Affordability Gap”: the difference in price between market rate and affordable units. Currently allow only for “fractional” units or if applicant can establish financial need or project infeasibility. •Example: 22-unit project * 20% inclusionary requirement= 4.4 BMR units 4-units provided onsite (2-low income, 2-very -low income) $137,587 in-lieu fee (0.4 units * $343,969 fee) Inclusionary Housing Impacts PROS Affordable units are built quickly Can provide some economic and racial integration No subsidy needed from City CONS Produces fewer affordable units compared to 100% affordable housing developments Doesn’t produce units for the extremely low- income Reduces project revenues: can potentially restrict production and raise housing prices if poorly designedSan Rafael City Council September 8, 2020 Affordable Housing In-Lieu Fee Effectiveness prices if poorly designed San Rafael City Council September 8, 2020 Are fees effective at producing more housing units? •$6:$1 nationwide average leverage ratio of trust fund dollars for affordable housing. •3 units built for every 1 units worth of fees (Seattle) •~$45,500 average local/county funding to make a LIHTC project feasible in Marin ($125,000 in Oakland) Does affordable housing need to be provided onsite to be effective at creating inclusive communities •Nearly all available studies looking at this relationship indicate that access to higher opportunity neighborhoods is the most important factor. Access to specific market rate buildings is not the influencing factor. What are the equity impacts of changing the inclusionary housing requirements? •Ensuring high-housing quality and robust resident services are as important to resident success housing stability. •In neighborhoods with higher rates of poverty, LIHTC developments are providing better housing quality and stronger property management than what is available in the private market. Inclusionary Housing White Paper Recommendations Provide a by-right in- lieu fee option to fulfill the inclusionary housing requirement. Ensure that by-right in-lieu fees are set sufficiently high. Alter the inclusionary requirement depending on development type and location; conduct further study. Consider reducing it for ownership units specifically. 3. City Council should take a strong, unified pro-housing stance to manage community opposition to new housing. Allow developers to fulfill the inclusionary requirement more creatively and efficiently E.g. provide more smaller- sized affordable units rather fewer large-sized affordable units, Set a schedule to review and revise the Inclusionary Housing Ordinance on a regular basis. Make sure requirements reflect market conditions. Update cycle of 3-5 years. San Rafael City Council September 8, 2020 Inclusionary Housing-Best Practices 3. City Council should take a strong, unified pro-housing stance to manage community opposition to new housing. Two Main Elements: Baseline Requirement-A percentage of BMR units required to be provided on-site as part of all projects. Additional Requirement-Options provided to the developer to meet the remaining inclusionary housing requirement San Rafael City Council September 8, 2020 Inclusionary Housing-Additional Requirements 3. City Council should take a strong, unified pro-housing stance to manage community opposition to new housing. Four main types of additional requirements: 1)Additional Onsite Units-Onsite BMR units provided in addition to the baseline requirement. Often the developer has several options at varied depth (the percentage of units) and breadth (the affordability level) of affordability restrictions. 2)In-Lieu Fee-A per unit fee paid to City by the developer instead of onsite units. Fee is placed in a Trust Fund to dedicated to creating more affordable housing. 3)Offsite Units-BMR units are provided offsite at a nearby site. Must provide similar economic benefit and requires Director Approval. 4)Land Conveyance-Developable land is provided to the City of future affordable housing development. Must provide similar economic benefit and requires Director Approval. San Rafael City Council September 8, 2020 Policy Proposal Inclusionary Housing-Scenarios Goal was to design requirements that are simple and transparent Three Scenarios: •20% Onsite BMR Equivalent, •15% Onsite BMR Equivalent, •10% Onsite BMR Equivalent. All scenarios include the below elements: •Condense project size categories from three (2- 10 units, 11-20 units, 21+ units) to two (2-15 units, 16+ units) •Baseline Requirement •Additional Requirement Feasibility: •Low-Rise (36 unit) & Mid-Rise Prototype (72 unit) •Analyzed for Additional Onsite BMR units •Feasible if profit is greater than 15% of cost. San Rafael City Council September 8, 2020 Scenario 1-20% Equivalent 2-15 Units 16+ Units 2-15 Units 16+ Units Baseline Requirement (All Projects)10% Low-Income 5%- Low Income 5%- Very Low Income 10% Low-Income 5%- Moderate Income 5%- Low Income Additional Requirement (Must choose one option below in addition to the Baseline Requirement) Option 1) Onsite No Requirememt 5%- Very Low Income or 10%- Low Income or 15%- Moderate Income No Requirememt 5%- Very Low Income or 10%- Low Income or 15%- Moderate Income Option 2) In-Lieu Payment Allowed for Fractional Units Payment equal to 10% of Total units Allowed for Fractional Units Payment equal to 10% of Total units Option 3) Offsite No Requirememt * Within 1/2 mile of project * Similiar economic benefit * Requires Director approval No Requirememt * Within 1/2 mile of project * Similiar economic benefit * Requires Director approval Option 4) Land Conveyance No Requirememt * Must be developable * Similar economic benefit * Requires Director approval No Requirememt * Must be developable * Similar economic benefit * Requires Director approval Rental For Sale * In-lieu fees allowed for fractional unit up to 0.5 Units, after 0.5 units they must provide one on-site unit **Very Low Income- 50% AMI or lower, Low Income- 80% AMI or lower, Moderate Income- 120% AMI or Lower Low-Rise Mid-Rise Estimated Cost $19.71M $39.71M Estimated Profit $2.82M $4.98M Feasibility Not Feasible (14.3%)Not Feasible (12.6%) *A project is considered feasible if profit is greater than 15% of cost Low-Rise Mid-Rise Estimated Cost $19.71M $39.71M Estimated Profit $3.22M $6.16M Feasibility Feasible (16.4%)Feasible (15.5%) *A project is considered feasible if profit is greater than 15% of cost Feasibility-Low/Very -Low Feasibility-Moderate San Rafael City Council September 8, 2020 Scenario 2-15% Equivalent Feasibility-Low Feasibility-Moderate 2-15 Units 16+ Units 2-15 Units 16+ Units Baseline Requirement (All Projects)10% Low-Income 5%- Low Income 5%- Very Low Income 10% Low-Income 5%- Moderate Income 5%- Low Income Additional Requirement (Must choose one option below in addition to the Baseline Requirement) Option 1) Onsite No Requirememt 5%- Low Income or 10%- Moderate Income No Requirememt 5%- Low Income or 10%- Moderate Income Option 2) In-Lieu Payment Allowed for Fractional Units Payment equal to 5% of Total units Allowed for Fractional Units Payment equal to 5% of Total units Option 3) Offsite No Requirememt * Within 1/2 mile of project * Similiar economic benefit * Requires Director approval No Requirememt * Within 1/2 mile of project * Similiar economic benefit * Requires Director approval Option 4) Land Conveyance No Requirememt * Must be developable * Similar economic benefit * Requires Director approval No Requirememt * Must be developable * Similar economic benefit * Requires Director approval Rental For Sale * In-lieu fees allowed for fractional unit up to 0.5 Units, after 0.5 units they must provide one on-site unit **Very Low Income- 50% AMI or lower, Low Income- 80% AMI or lower, Moderate Income- 120% AMI or Lower Low-Rise Mid-Rise Estimated Cost $19.71M $39.71M Estimated Profit $2.98M $5.48M Feasibility Feasible (15.1%)Not Feasible (13.8%) *A project is considered feasible if profit is greater than 15% of cost Low-Rise Mid-Rise Estimated Cost $19.71M $39.71M Estimated Profit $3.48M $6.40M Feasibility Feasible (17.6%)Feasible (16.1%) *A project is considered feasible if profit is greater than 15% of cost San Rafael City Council September 8, 2020 Scenario 3-10% Equivalent Feasibility-Overall2-15 Units 16+ Units 2-15 Units 16+ Units Baseline Requirement (All Projects)10% Low-Income 5%- Low Income 10% Low-Income 5%-Low Income Additional Requirement (Must choose one option below in addition to the Baseline Requirement) Option 1) Onsite No Requirememt 5%- Low Income or 10%- Moderate Income No Requirememt 5%- Low Income or 10%- Moderate Income Option 2) In-Lieu Payment Allowed for Fractional Units Payment equal to 5% of Total units Allowed for Fractional Units Payment equal to 5% of Total units Option 3) Offsite No Requirememt * Within 1/2 mile of project * Similiar economic benefit * Requires Director approval No Requirememt * Within 1/2 mile of project * Similiar economic benefit * Requires Director approval Option 4) Land Conveyance No Requirememt * Must be developable * Similar economic benefit * Requires Director approval No Requirememt * Must be developable * Similar economic benefit * Requires Director approval Rental For Sale * In-lieu fees allowed for fractional unit up to 0.5 Units, after 0.5 units they must provide one on-site unit **Very Low Income- 50% AMI or lower, Low Income- 80% AMI or lower, Moderate Income- 120% AMI or Lower Low-Rise Mid-Rise Estimated Cost $19.71M $39.71M Estimated Profit $3.92M $6.72M Feasibility Feasible (19.8%)Feasible (16.9%) *A project is considered feasible if profit is greater than 15% of cost San Rafael City Council September 8, 2020 Buyouts for Entitled Projects San Rafael City Council September 8, 2020 Approached by several developers with entitled projects about potential for paying in-lieu for a portion of their onsite below market rate units. If pursued by City Council, staff recommends: •Allow only for entitled projects who have not pulled building permits; •Setting buyout amount at $609,000 per unit for up to half of approved onsite units; •Building permits within one (1) year of agreement; Entitled Projects (pre-construction) •Lower opportunity cost •Mutual incentives- o City: expedite construction, funding for affordable housing o Developer: reduced onsite requirement Entitled Projects (construction) •High opportunity cost •Lack of incentive- o City:high in-lieu fee to account for opportunity cost; project already under construction o Developer: Fee too high, likely already financed Planning Commission Feedback San Rafael City Council September 8, 2020 Overall supportive of allowing in-lieu fee and any policy changes necessary to encourage housing development. Highly supportive of the proposed policy design (i.e. baseline requirement and additional requirement) but not clear recommendation for a specific scenario. 3) Density Bonus Policy Background AB2501 3. City Council should take a strong, unified pro-housing stance to manage community opposition to new housing. AB2501 became effective in 2017 1)Clear submittal requirements 2)Fractional number are to be rounded-up to the next whole number. Applies to: •Base density-base density is the density that is allowed by the Zoning District •Number of affordable units required to be eligible for the density bonus •Number of density bonus units •Number of replacement units (if applicable) •Number of required parking space San Rafael City Council September 8, 2020 AB2501 3. City Council should take a strong, unified pro-housing stance to manage community opposition to new housing. 3)Limitations on the studies/reports that the City can require of the applicant. 4)Granting of concession or incentive is mandatory unless the City makes a written finding : •"does not result identifiable and actual cost reductions” •impact on the environment or to historic resources. San Rafael City Council September 8, 2020 AB1934 3. City Council should take a strong, unified pro-housing stance to manage community opposition to new housing. AB1934 became effective 2017 Provides non-residential commercial development projects that enter into an agreement to contribute affordable housing development bonuses that includes: • Up to 20% increase in height, floor area and/or intensity • Up to a 20% reduction in parking • Allows for an exception to zoning regulations San Rafael City Council September 8, 2020 AB2442 3. City Council should take a strong, unified pro-housing stance to manage community opposition to new housing. AB2442 became effective in 2017 Expands the categories of specialized/supportive housing that could qualify for a 20% density bonus to include: •transitional foster youth •disabled veterans •homeless persons San Rafael City Council September 8, 2020 AB1227 3. City Council should take a strong, unified pro-housing stance to manage community opposition to new housing. SB1227 became effective in 2019 Allows a 35% density bonus for housing developments that will include at least 20% of the units for low income college students. San Rafael City Council September 8, 2020 AB1763 3. City Council should take a strong, unified pro-housing stance to manage community opposition to new housing. AB1763 became effective in 2020 Density bonus provisions for 100% affordable housing projects: •Allows an 80% density bonus; •No density limits for projects located within ½ mile of a major transit stop; •Height bonus of 33 feet [by right if near major transit stop]; •Up to 4 concessions; •No parking requirements for special needs/supportive housing if the project provides paratransit service or is located within ½ mile from an accessible bus route. San Rafael City Council September 8, 2020 Policy Proposal Changes to SRMC Chapter 14.16 3. City Council should take a strong, unified pro-housing stance to manage community opposition to new housing. Section 14.16.030 would be amended to include: 1)Establish submittal and procedural requirements 2)Tables will be modified to align with SDBL 3)Expands definition of specialized housing and expands concessions/incentives for this type of housing 4)Incorporate special incentives for 100% affordable housing projects •33-foot height bonus •one additional incentive San Rafael City Council September 8, 2020 Changes to SRMC Chapter 14.16 3. City Council should take a strong, unified pro-housing stance to manage community opposition to new housing. 6)Allows additional parking incentives for: •100% affordable housing •Specialize/supportive housing •Senior housing •Housing with ½ mile of transit 7)Include special provisions for non-residential projects that partner with affordable housing developers San Rafael City Council September 8, 2020 Planning Commission Feedback San Rafael City Council September 8, 2020 Support for the proposed changes Solution should be adaptable to everchanging state regulations 4) Design Review Board Policy Background History of Design Review Board 3. City Council should take a strong, unified pro-housing stance to manage community opposition to new housing. Created in the 1970 with to provide input on major development in the downtown district as an informal advisory board •Expanded to citywide Transformed to a more formal format in 1990s Current Full DRB format: •Meets in City Council chambers •Public notification is provided •Intended to be design focuses but public comments are often policy-focused San Rafael City Council September 8, 2020 Background 3. City Council should take a strong, unified pro-housing stance to manage community opposition to new housing. DRB Purpose-reviewing and formulating recommendations on all major physical improvements requiring Environmental and Design Review permits.The DRB may also advise on other design matters, including minor physical improvements or administrative-level design review permits, referred to the Board by the Community Development Director, Planning Commission or City Council. Housing Work Plan-Three options identified to change the DRB process 1.Eliminate the DRB 2.Shifting the role of the DRB 3.Appoint a DRB Liaison to review smaller housing projects DRB Subcommittee •Established to respond to Shelter-in-Place restrictions •Has been highly successful San Rafael City Council September 8, 2020 Policy Proposal Design Review Advisory Committee 3. City Council should take a strong, unified pro-housing stance to manage community opposition to new housing. Replaces the full DRB Includes one (1) licensed architect, one (1) licensed landscape architect, one (1) alternate Provide professional advice on design to applicant Meetings are not a public meeting; no noticing is required. Public continues to be afforded public participation when the project moves forward for formal permit noticing and action (Zoning Administrator, PC, or CD Director). San Rafael City Council September 8, 2020 Planning Commission Discussion 3. City Council should take a strong, unified pro-housing stance to manage community opposition to new housing. Concerns about eliminating or reducing public participation. Option of creating a Hybrid •Smaller project would be reviewed by the DRAC and •Larger projects could be referred to the full DRB Option of reducing the review process for certain projects small projects to staff level San Rafael City Council September 8, 2020 Staff Response-Public Participation: 3. City Council should take a strong, unified pro-housing stance to manage community opposition to new housing. San Rafael City Council September 8, 2020 Staff Response-Public Participation: 3. City Council should take a strong, unified pro-housing stance to manage community opposition to new housing. San Rafael City Council September 8, 2020 Staff Response-Hybrid DRAC/DRB: 3. City Council should take a strong, unified pro-housing stance to manage community opposition to new housing. Will the Hybrid concept go far enough / accomplish the goal of streamlining housing production? San Rafael City Council September 8, 2020 Staff Response-Reducing the level of review for minor projects:3. City Council should take a strong, unified pro-housing stance to manage community opposition to new housing. Additional research is needed to determine where streamlining can occur. Proposed Amendments to the Zoning Code could be ready for City Council consideration in 2021 San Rafael City Council September 8, 2020 5) Amendments to SRMC Policy Background Background 3. City Council should take a strong, unified pro-housing stance to manage community opposition to new housing. As part of Housing Work Plan, City Council encouraged staff to continue to look for amendments that could be made to encourage development and streamline approvals. Proposed amendments reflect an initial review of amendments that could be made to meet these goals. Additional amendments may be identified and would be brought later for future consideration. San Rafael City Council September 8, 2020 Policy Proposal Proposed Amendments to SRMC 3. City Council should take a strong, unified pro-housing stance to manage community opposition to new housing. SRMC Section Amendments SRMC Section 14.12.040 Hillside Exception •Downgrades review and action to Planning Commission rather than City Council. Decision can still be appealed to City Council. SRMC Section 14.16.190 Height Bonus •Per state law, allows up to 33 ft. height bonus for Residential Development projects that make 100% of the total units available to lower income households, and such development project is located within one-half mile of a major transit stop. SRMC Section 14.16.300 Small Lots •Removes references to development limitations on lots under 5,000 SF, •Allows these lots to be developed at currently established density. SRMC Section 14.28 Appeals •Establishes scheduling procedures; •Clarifies public noticing requirements. San Rafael City Council September 8, 2020 Other possible Future Amendments to SRMC 3. City Council should take a strong, unified pro-housing stance to manage community opposition to new housing. San Rafael City Council September 8, 2020 Ways to provide opportunities for smaller housing developments to incorporate affordable units within their development. Changes to Accessory Dwelling Unit Ordinance Establishing Objective Standards for by-right projects Planning Commission Discussion 3. City Council should take a strong, unified pro-housing stance to manage community opposition to new housing. San Rafael City Council September 8, 2020 Support for the proposed changes 6) Discussion & Feedback Framing Questions 3. City Council should take a strong, unified pro-housing stance to manage community opposition to new housing. Policy Key Staff Questions Inclusionary Housing •Should the City allow developers expanded options to pay an affordable housing in- lieu fee instead of onsite units? •Should the City move forward with an inclusionary housing policy design with baseline and additional requirements, as proposed by staff? If yes, at which levels should these requirements be set? If no, how would the City Council like the policy designed? •Should the City allow buyouts for entitled projects? Density Bonus •Comments or Concerns? Formalize Design Review Subcommittee •Should the City formalize the DRB subcommittee process replacing the DRB with the DRAC? SRMC Amendments to Encourage Development and Streamline Approvals •Comments or Concerns? San Rafael City Council September 8, 2020 City Council Options 3. City Council should take a strong, unified pro-housing stance to manage community opposition to new housing. The City Council has the following options to consider on this matter : 1.Accept report and provide staff direction regarding proposed changes. 2.Direct staff to return with more information. 3.Take no action. San Rafael City Council September 8, 2020 Thank You!