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HomeMy WebLinkAboutMinutes 2001-08-30 MINUTES CITY COUNCIL CITY OF SOUTH SAN FRANCISCO SPECIAL MEETING AUGUST 30, 2001 MUNICIPAL SERVICES BUILDING COMMUNITY ROOM 33 ARROYO DRIVE 1. Call to Order: 2. Roll Call: o 6:08 p.m. Present: (Cassette Tape No. 1) Councilmembers Gonzalez, Matsumoto and Penna, Mayor Pro Tern Mullin and Mayor Fernekes Commissioners D'Angelo, Honan*, Ochsenhirt, Sim, Teglia, Vice-Chairman Romero and Chairman Meloni Absent: None Staff Present: City Manager Wilson, Assistant City Attorney Johnson, Assistant City Manager Moss, Economic and Community Development Director Van Duyn, Chief Planner Sparks, Housing and Community Development Manager Fragoso, Senior Planner Lappen, and Community Development Consultant Sanchez *Commissioner Honan left meeting at 8:25 p.m. Public Comments: None Study Session: Joint meeting with the Planning Commission - Inclusionary Housing Ordinance and Density Bonus Ordinance Director Van Duyn presented opening comments and provided background information on ABAG's fair share housing allocation plan and proposed inclusionary housing ordinance. He stated that the objective of the joint study session is an attempt to outline direction that will allow staff to prepare a housing element that meets the objectives of ABAG's fair share housing allocation, albeit, consistency with state law in order to have verifiable and a completely sustainable general plan document. He further explained that legislation, SB 262, is the next step that mandates cities to meet the target and objectives of the fair share housing allocation plan, and that there are a series of penalties if cities do not meet their allocation by having a consistent housing element. Housing and Community Development Manager Fragoso gave a detailed staff report and visual presentation that included housing trends and conditions, regional housing needs, ! q! history of the inclusionary housing ordinance in other communities, and elements of the proposed ordinance. Staff's recommendation is that the City take on the responsibility of providing the 110 very-low income housing units due to developers inability to do so. She further discussed build-out projections and staffs recommendation that the inclusionary housing requirement for affordable units be set at 25%. Speakers: Ms. Carol Ann Painter, DUC Development, stated her support for the ordinance and the 25% affordability requirement. She suggested that the City take on the very-low income requirement. She asked that the City assist DUC by providing a expeditious permit process, and that staff assist with the administrative process in order to meet the requirements of the ordinance. Mr. George Mazingo, Governmental Affairs Director for the San Mateo County Association of Realtors, stated that he supports the City's goals, but the developers should not be solely responsible for providing affordable housing, and suggested the community's involvement. Phil Serna, Home Builders Association of Northern California, urged Council and staff to look at other alternatives of building affordable housing rather than just through market rate builders. Ms. Fran Wagstaff, Mid-Peninsula Housing Coalition, stated her support for the below market rate housing ordinance that will solve part of the problem. She discussed what drives the housing market and reasons for it to escalate. She suggested the range of incomes in the ordinance be specific. Ms. Vicky Barberia, stated the four unit requirement is low, people will build duplexes which will push affordable housing out. She suggested Council look at alternatives such as first time homebuyer programs. Councilman Penna stated his skepticism for setting the inclusionary requirement at 25% and questioned the assumption that there is a shortage of housing. He asked why the houses that are currently on the market are not included, and mentioned that the State may change its figures again in five years. He questioned whether developers, other than DUC, will be willing to build in South San Francisco, and further questioned the formulas presented by staff. He felt the ordinance needs flexibility to encourage building, and to create densities to meet the demand. He stated that his concern is that the City will discourage any further development in the community and that he could not support the direction of the program as it exists today. At the request of Mayor Pro Tem Mullin, Mr. Serna read two correspondences (attached) regarding governmental constraints that negatively impact the development of housing. Mayor Pro Tem Mullin asked that the correspondence be submitted and copies provided to Council. SPECIAL CITY COUNCIL MEETING AUGUST 30, 2001 MINUTES PAGE 2 Ms. Wagstaff further discussed the cost of housing, and the factors a developer considers to determine it. She stated the benefits of the below market rate ordinance, that a city must be firm in its implementation and that developers need to be told to create units for the working people. Mr. Serna stated his disagreement with Ms. Wagstaff's comments. He stated the 25% is not a reasonable approach and it is one of the highest in the Bay Area. Councilman Gonzalez stated his support for the program and the 25% requirement, but suggested developers be given some leverage, because small developers may find it difficult to provide an affordable housing unit. He questioned what the quality of the affordable units will be and if they will have the amenities like market rate units. Councilwoman Matsumoto discussed with staff the recommendation that the City provide the very-low housing units by maximizing opportunities from existing housing stock. Director Van Duyn stated that Redevelopment Agency and CDBG funds will be used or partnering with non-profit agencies. He further discussed the City's obligation to provide affordable units and to meet specified income levels. He reminded Council that the Department of Housing and Community Development (HCD) has to find the City's Housing Element consistent with the legislation that is mandating cities meet ABAG's fair share allocations. He further reminded Council that ABAG based the fair share housing allocations on the number of jobs provided in a community. In response to Councilman Penna, Director Van Duyn clarified that the affordable units can be either rental or for-sale housing, and that the City receives credit for existing housing units, but it has to be income-restricted. Councilman Penna reiterated his concern that today the housing market is booming, but tomorrow it may not, and then the City will be stuck with the allocation requirements. Mayor Pro Tem Fernekes confirmed with staff that the Chestnut Senior Housing project was included in the housing production numbers. (Recess: 8:10 pm - 8:25 pm) Chairman Meloni advised Council that Commissioner Honan left the meeting due to personal business. Chairman Meloni asked for the Commission's comments. Commissioner Teglia commented that setting the requirement at 25% is not appropriate for all areas of the City. He questioned the ability of other cities to meet their quotas, the possibility of the ordinance discouraging developers to build here, government constraints being a loop hole, adequate parking requirements on smaller lots, and open space. He felt the City needed to do more research about how inclusionary ordinances are working in other towns, exploring alternatives, such as, grant funding techniques, public-private partnerships, etc. He suggested a 15-20% requirement in transit corridors, and 10-15% in other parts of town. Commissioner Ochsenhirt gave his perspective on the two sides of the housing issue. He questioned the incentive to waive in-lieu fees and the rate at which in-lieu fees are to be set. SPECIAL CITY COUNCIL MEETING AUGUST 30, 2001 MINUTES PAGE 3 He questioned whether developers will want to develop in South San Francisco. He stated that people are losing jobs and at some point will not be able to obtain reasonable loan rates. He believed the ordinance is necessary and will be finalized after careful consideration. Commissioner Ochsenhirt felt the numbers given by staff on the affordability factor were unrealistic, based on his real estate knowledge. He stated support for rehabilitating existing housing stock. Vice Chairman Romero commented that the inclusionary ordinance is necessary and stated his concern regarding the inclusionary requirement being set at 25%. He suggested density be controlled so that properties are not over-developed. He questioned ABAG's allocation, the City's obligation to meet it, and whether litigation has been filed. Assistant City Attorney Johnson responded that there has not been any litigation, although Council did forward a letter to HCD (correction - letter sent to ABAG) challenging the City's allocation. The response was unfavorable and afforded the allocation as presented tonight. Vice Chairman Romero asked if there were any alternatives and Assistant City Attorney Johnson stated that if the City did not meet the allocation in the Housing Element then HCD will refuse to certify it. Vice Chairman Romero questioned if the 25% can be reduced, and Director Van Duyn discussed the different percentages, but the major emphasis being that the 25% allows the City to achieve its goal. Director Van Duyn further explained the theory behind the mandate, the status of the mandate if the housing market collapses, the housing element being updated every five years, and controlling the affordability units by deed restrictions and limitations on re-sale. Commissioner Sim reviewed the considerations he gave to the issue, being mindful of all the factors involved, and the reacting approach that is being taken. Noting a scarcity of land in South San Francisco, he suggested that creative options be considered, including transference of funds to another locality within the County. Director Van Duyn discussed the merits of the suggestion and its ramifications. He stated that HCD suggested industrial/ commercial property be rezoned residential, but revenue producing uses will then be replaced. Commissioner Sim asked how successful inclusionary ordinances have been in other cities and staff responded that the information can be gathered. Commissioner D'Angela stated his apprehension for the flat 25% housing requirement and felt other approaches seem more reasonable. He stated the goal of providing 87% of the housing allocation in the 5 years of a 20 year period is unreasonable. Chairman Meloni commented that setting the requirement at 25% is not appropriate for all areas of the South San Francisco, and questioned if quality will be sacrificed to meet the numbers. In reference to the 25% requirement, he commented that comparisons are being made to other communities that are only requiring 10-15%, but they may not have as great of an allocation as South San Francisco. He stated that the mandate will not go away, and solutions may include commercial areas' involvement, and the option of developing housing El01. Councilman Penna felt it was reasonable to set the requirement at 15% in the transit district, and that the figures not be city-wide. He reiterated that the 25% requirement for SPECIAL CITY COUNCIL MEETING AUGUST 30, 2001 MINUTES PAGE 4 developments of four or more units will result in developments of only three units. He suggested adjustments be made. Mayor Pro Tem Mullin stated his support for the 25% requirement for the entire city, rationalizing that the City will be providing the very-low income units and developers will provide units for those who live or work here. He explained the principals of smart growth and background on ABAG's allocations. He suggested goals be set for developers to provide housing for the workforce. He agreed that the four unit proviso needed further study, as mentioned by Councilman Penna. Councilman Gonzalez stated his support for affordable housing, and asked if it is possible to assign different percentages according to the size of a development. Staff stated it is an option if that is the Council's direction, which may also address the four unit issue. Councilman Gonzalez suggested the 25% be reviewed in one year for modification, if needed. Councilwoman Matsumoto concurred with Mayor Pro Tem Mullin and stated her support for the 25% requirement. She stated that the workforce deserves to live in the city they work. Mayor Fernekes concurred with the 25% requirement and the efforts being made to retain employees in the city they work. He stated that South San Francisco is respected by other cities on the Peninsula and that the City sets high standards. He concluded the discussion of the item and asked the Planning Commission to adjourn. Adjournment of Planning Commission Meeting Motion-Teglia/Second-D'Angela: To adjourn the Planning Commission meeting at 9:21 p.m. Approved by voice vote. Absent: Commissioner Honan. (Cassette tape No. 2) (Recess 9:23 pm - 9:27 pm) 5. Study Session: El01 Transportation Improvement Plan, Traffic Impact Fee, and City-Wide Transportation Demand Management Plan Chief Planner Sparks informed Council that the staff report will be an overview and status report of the plan. He stated that the plan has already been presented to the Planning Commission and that there was a split vote. Ms. Luna Salavair, public information officer from Bay Area Air Quality Management District, stated her support for the proposed ordinance and discussed the related health issues involved. She stated the plan is essential for smart growth and sustainability. She informed Council that a report on air management is due in October and if the District is unsuccessful in convincing the State of improved reduction measures there may be a conformity freeze and this area will lose millions of dollars in highway and public transit funding in January, 2002. She stated this ordinance will help meet the District's goal. (Information packets submitted to Council.) SPECIAL CITY COUNCIL MEETING AUGUST 30, 2001 MINUTES PAGE 5 Chief Planner Sparks continued the presentation. Councilwoman Matsumoto asked why the two TDM measures, to encourage a developer to reduce the parking ratio and to provide paid parking, were removed by the Planning Commission. Chief Planner Sparks responded that he was not clear on the intention, but there was a majority vote. Mayor Pro Tem Mullin commented that the measures are to reduce single occupant vehicle use. He asked for more information on the vote and Chief Planner Sparks and Assistant City Attorney Johnson responded that the motion was contingent upon omitting the reduced parking measures. Mayor Pro Tem Mullin asked that clarification on the vote be provided, if available. He stated his support for the two TDM measures. Upon conclusion of the staff report, Councilwoman Matsumoto asked for clarification on the shuttle program subsidies and companies not paying their share. In response Mr. Mike Stevenson, Shuttle Program Manager for Alliance discussed the program's expansion, and stated the employer rates have been increased, that a few employers have bailed out, and the City's portion is increasing to some degree. He stated that with a plan in place there will be leverage to encourage employers to participate. He stated that he manages five towns and he finds that towns with the least amount of parking have high shuttle usage. In response to Councilman Gonzalez, staff stated that the physical improvements and fee structure is for E 101 and the TDM program is for the entire City. Chief Planner Sparks stated the transportation support network will be expanded to include BART once it opens. 6. Closed Session: Pursuant to Government Code Section 54956.9a, existing litigation: Aetna v. City of South San Francisco Entered into Closed Session: Reconvened into Open Session: Report from Closed Session: 9:50 p.m. 10:10 p.m., all Councilmembers present. Mayor Fernekes reported direction given/no action taken. 7. Adjournment Motion-Penna/Second-Gonzalez: To adjourn the meeting at 10:10 p.m. Unanimously approved by voice vote. Submitted by: /.~.~ City of South San Francisco SPECIAL CITY COUNCIL MEETING AUGUST 30, 2001 MINUTES PAGE 6 , RE: Housing Element l. nclusionary Housing Policies From: Robert Maus [[email protected]] Sent: Thursday, April 26, 2001 2:02 PM To: 'MILLER, BRIAN K' Subject: RE: Housing Element Inclusionary Housing Policies I've worked for this Department since February 1990 and I don't believe our approach has changed at all during that trine. We neither ,~tBpnrt or ~pose local inclusionary programs in the abstract. We have consistently (to my Imowledge~ asked local jurisdictions to analyze an inclusionary program as a potential governmental constraint. The reasonin~ for this is t~aat most prograu~ ot tins sort inmose a fee or dedication requirement upon developers which~s passed on to consume'rs Qfnew market rate housing, raisin~ the price of the market rate hou~rl$. The government code requires that fee~md exactions placed upon homing be analyzed as potential constraints. The amount of fee and/or dertication requirement would be a concern to this Department. That is, would the inclusiona~3~ requirement be so high as to price a number of consumers of market rate housing out of the market. In some cases we have observed fees or dedication requkements that are so high that virtually no housing of any sort is constructed locally. We would also expect that the locality provide a description of any incentives offered to developers to make the inclusionary requirements f'mancially viable. For example, if the locality requires developers to consmact below market rate housing, are developers offered higher density zoning, reduced development standards, expedited processing, etc. to make the inclusionary housing financially viable? In other words, market rate residential developers and their consumers should not be required to bear the entire responsibility of developing lower income housing. Local government and the community's residents also need to provide sufficient incentives to make such development a reality. So inclusionary programs aren't inherently good or bad. They can be a useful tool, or a steep barrier to housing development. The devil is in the details. Hope this helps. ..... Original Message--- Frorm MILLER, BRIAN K [mailto:BMILLER~ci.fairfield.ca. us] Sent: Thursday, April 26, 2001 9:13 AM To: Robert Maus Subject: Housing Element Inclusionary Housing Policies Mr. Mans: We are £malizing our Draft Housing Element Update and hope to subm/t it to HCD for your review in May. One issue that has come out of our public wor~hop process and our discussions with Housing Agencies is Inclusionary Housing. In our last Housing Element (1992), we included an Inclusionary Housing Policy. After two years of working with a task force, HCD staff informed us that HCD now (1994/95) considered DiPs to be a constraint on housing-and that we could lose our certification. From workshops and conversations with other cities and public housing advocates, it appears that HCD is now supporting Inclusionary housing .~olicies as a key component of a Housing Element. Does HCD staff now recommend [HPs, and would you recommend incorporating such a program/policy ~to our Housing Element? 0000S,S 4/27/01 o~ c.~.l~'o~. 8u:s,~E~, 'r~,....t~,,,oR'r&lqon DEPA~ENT OF HOUSING AND COMMI D~SION OF HOUSING POU~ DEVELO.ME~ , Ms. Eve Somje~ A~si~arrt City Plm. City of Faiffi~-ld 1000 W~bster Str¢~ Fairfield, CaliXomia 9453. ,996 [~.a'? .., . -~ . '.; ..',~.- -...~ . .I ~"~ ~' ~' /k./ -'~ " ,J~, I '.ac Dear Ms. $omjen: As requested, w~ are pleased to provide the City' of 'Fairfield with comm~,ts on its proposed inclusionary ordinance (receiwd Ap~l'29, 1'996 t'or our review). F,,cgretfully, we were unable to prcpar~ our ru'sponse in time for the City's May 8, 1996 Planning Cornm_Lssion study session. None the less, we hope that you will find our feedback valuable. Housing elem~t law requires local governments to analyze policies which have thc potential to constrain or negatively impact the development of housing (Government Code Section 65583(a)(5)). White your lett~ indicates that Fairfield's motivation ['or considering. an inclusionary ordinance is to facilitate and not kinder the development of' housingS[we arc concerned about how the ordirtanc~ will effect market rate co~'truction. Under most' inclusionary programs, which typically include an in-lieu fee option, the cost of subsidizing low-income housing units is underwritten by the purchasers of mark¢:-rate units in the form of higher prices. This practice of co~. shifting is particularly detrimental to a home buyer who marg'inally qualifies for a mortgage, yu-t ~arra too much to receive governmental assistance. Even a nominal price increase can provera such a person from entering the housing markun. In addition, inclusionary orctinanc~s cam have a chilling effect on housing construction in general, ultimately undermining the provision of th~ low-income units which they are intended to foster. In order to compensate for the disadvantages of inclusionary ordinances, it is essential that local governments offer incentives to sufficientty facilitate both market-rate housing and the below-market rate housing that is tied by mark~t-mte approvals. In the case of Faixficld, incentives are especially important sinc~ the development climate is already complicated by multifamily design standards which include burdensome open space, landscaping, and lot coverage requirements, among others and a proposed growth management ordinance. The list of conce~siorts described in Section VII of FainSeld's draft ordirtanc: is a beginning, however, additional description and commitment from the City is r~quir~d. For example: 000083 Eve $omjen Sec~on V ~pecifies the length of time r~ntal units must remain a.ffordabte, yet there are no stated time-lines for owners~p units. Resale restrictions and other ~Tord~bility controls h~vc an important impact on housing dcvelopmerrt and should be described to the fullest extent possible. At the very least, the ordinance should include the minimum and maximum period of time an ownership unit could be subje¢'c to affordability controls. Fin~lly, the rclatiomhip bet~'een the dral~ iaclusionary ordinance, the proposed growth management plan, and Fairfield's design standard~ for multifamily projects should bc clarified. For example, the ~rowth man~gem..~at ordinance exempts certain affordable housing clevelopmcnt, would this exemption ~pply to ~-fordab[e inclusiomry units? In your letter and ~ subsequent telephone conversations, you expressed coaccm about the impact of the proposed iactusionary ordinance on Falrfield's housing element compliance stat-~. The ordinance will not affect Falrfield's housing element unless it b adopted. l:urthe~morc, the element will remain ia compliance if the adopted ordinauce addresses the potential governmental com-tralnts ou market rate housing. The Cit~' wilt also uecd to amend the housing elam:at to analyze the ordinance ~s · potential governmental constraint. We note your letter' indicstes ~mt the ordinance is implementing an. existing housing ~[¢ment progarn. However the proems, in que~ou, HO 2.1 A, states that "the C~ty will adopt an ordinance which will encour~e home builders ro include ..." a percenter of affordable units in housing projects. The dr~ff ordinance scut to us for comment requires builders to include a.fford~b[¢ units in h~using projects. If the ordinance was dra~¢d to encourage, not mm~datc affordable developmen~ the housing element would not require amcndracnt ~s described above. We hope om' comments are helpful and we sppreciate the opportunity to work proactively with the City. If you have any questions about our commcnU or i~ we may resist you in revising your' ordinance, ple.~sc contact Michell¢ Woods, of our staff, at (916) 327-8881. Sincerely, Manager TOTAL P, 03 000085