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HomeMy WebLinkAbout2022-03-21 e-packet@5:00Monday, March 21, 2022 5:00 PM City of South San Francisco P.O. Box 711 (City Hall, 400 Grand Avenue) South San Francisco, CA TELECONFERENCE MEETING Zoom Link: https://ssf-net.zoom.us/j/83511058315 Housing Standing Committee of the City Council and Planning Commission Regular Meeting Agenda March 21, 2022Housing Standing Committee of the City Council and Planning Commission Regular Meeting Agenda TELECONFERENCE MEETING NOTICE The Housing Standing Committee may meet by teleconference, consistent with the Brown Act as amended by AB 361 (2021). Under the amended rules, the City will not provide a physical location for members of the public to participate in the teleconference meeting. The purpose of conducting the meeting as described in this notice is to provide the safest environment for staff and the public while allowing for public participation. Mayor Nagales, Councilmember Addiego and essential City staff will participate via Teleconference. PURSUANT TO RALPH M. BROWN ACT, GOVERNMENT CODE SECTION 54953, ALL VOTES SHALL BE BY ROLL CALL DUE TO COUNCIL MEMBERS PARTICIPATING BY TELECONFERENCE. MEMBERS OF THE PUBLIC MAY VIEW A VIDEO BROADCAST OF THE MEETING BY: Via Zoom: Join Zoom meeting https://ssf-net.zoom.us/j/83511058315 (Enter your email and name) Join by One Tap Mobile : US: +16699006833,,83511058315# or +13462487799,,83511058315# Join by Telephone: Dial (for higher quality, dial a number based on your current location): US: +1 346 248 7799 or +1 669 900 6833 or 833 548 0276 (Toll Free) Webinar ID: 835 1105 8315 Page 2 City of South San Francisco Printed on 4/18/2022 March 21, 2022Housing Standing Committee of the City Council and Planning Commission Regular Meeting Agenda American Disability Act: The City Clerk will provide materials in appropriate alternative formats to comply with the Americans with Disabilities Act. Please send a written request to City Clerk Rosa Govea Acosta at 400 Grand Avenue, South San Francisco, CA 94080, or email at [email protected]. Include your name, address, phone number, a brief description of the requested materials, and preferred alternative format service at least 24-hours before the meeting. Accommodations: Individuals who require special assistance of a disability-related modification or accommodation to participate in the meeting, including Interpretation Services, should contact the Office of the City Clerk by email at [email protected], 24-hours before the meeting. Notification in advance of the meeting will enable the City of South San Francisco to make reasonable arrangements to ensure accessibility to the meeting. Call To Order. Roll Call. Agenda Review. Remote Public Comments Speakers are allowed to speak on items on the agenda for up to three minutes. If there appears to be a large number of speakers, speaking time may be reduced subject to the Mayor ’s discretion to limit the total amount of time for public comments (Gov. Code sec. 54954.3.(b)(1).). Comments that are not in compliance with the City Council's rules of decorum may be summarized for the record if they are in writing or muted if they are made live. HOW TO SUBMIT WRITTEN PUBLIC COMMENT BEFORE THE MEETING Members of the public are encouraged to submit public comments in writing in advance of the meeting via the eComment tab by 3:00 p.m. on the meeting date. Use the eComment portal by clicking on the following link: https://ci-ssf-ca.granicusideas.com/meetings or by visiting the City Council meeting's agenda page. eComments are also directly sent to the iLegislate application used by Committee Members and staff. Comments received by the deadline will be included as part of the meeting record but will not be read aloud during the meeting. Page 3 City of South San Francisco Printed on 4/18/2022 March 21, 2022Housing Standing Committee of the City Council and Planning Commission Regular Meeting Agenda HOW TO PROVIDE PUBLIC COMMENT DURING THE MEETING Members of the public who wish to provide comment during the meeting may do so by using the “Raise Hand” feature: • To raise your hand on a PC or Mac desktop/laptop, click the button labeled "Raise Hand” at the bottom of the window on the right side of the screen. Lower your hand by clicking the same button, now labeled “Lower Hand.” • To raise your hand on a mobile device, tap “Raise Hand” at the bottom left corner of the screen. The hand icon will turn blue, and the text below it will switch to say "Lower Hand" while your hand is raised. To lower your hand, click on “Lower Hand.” • To raise your hand when participating by telephone, press *9. • To toggle mute/unmute, press *6. Once your hand is raised, please wait to be acknowledged by the City Clerk, or designee, who will call on speakers. When called upon, speakers will be unmuted. After the allotted time, speakers will be placed on mute. MATTERS FOR CONSIDERATION Motion to approve the Minutes for the meetings of August 16, 2021, November 15, 2021 and January 24, 2022. 1. Study session regarding a proposed ballot measure authorizing the City of South San Francisco to develop, construct, or acquire affordable, low-rent housing units pursuant to Article XXXIV of the California Constitution and to provide direction to staff. 2. Adjournment. Page 4 City of South San Francisco Printed on 4/18/2022 City of South San Francisco Legislation Text P.O. Box 711 (City Hall, 400 Grand Avenue) South San Francisco, CA File #:22-207 Agenda Date:3/21/2022 Version:1 Item #:1. Motion to approve the Minutes for the meetings of August 16, 2021, November 15, 2021 and January 24, 2022. City of South San Francisco Printed on 4/18/2022Page 1 of 1 powered by Legistar™ CALL TO ORDER 5:00 p.m. ROLL CALL Present: Mayor Addiego, Vice Mayor Nagales, Planning Commission Chair Evans, Vice Chair Shihadeh and Commissioner Faria. AGENDA REVIEW None. PUBLIC COMMENTS The following provided public comment: • Leslie Fong MATTERS FOR CONSIDERATION 1. Motion to approve the Minutes for the meeting of December 21, 2020. Motion – Planning Commission Vice Chair Shihadeh / Second – Vice Mayor Nagales to approve the Minutes from the meeting of December 21, 2020. Yes: Mayor Addiego, Vice Chair Shihadeh, Commissioner Faria, Vice Mayor Nagales. Chair Evans was having audio issues and did not vote on this item. 2. Report regarding the third amendment to the Purchase and Sale Agreement for the property located at 432 Baden Avenue. (Julie Barnard, Economic Development Coordinator) Coordinator Barnard recommended that the Housing Standing Committee (HSC) provide a City Council recommendation to adopt a resolution approving the third amendment to the Purchase and Sale Agreement which included 1.) Changing the developer from Baden Developments LLC to For MINUTES REGULAR MEETING OF THE HOUSING STANDING COMMITTEE OF THE CITY COUNCIL AND PLANNING COMMISSION CITY OF SOUTH SAN FRANCISCO P.O. Box 711 (City Hall, 400 Grand Avenue) South San Francisco, California 94083 MONDAY, AUGUST 16, 2021 5:00 p.m. Teleconference via Zoom Housing Standing Committee conducted this meeting in accordance with California Governor Newsom’s Executive Orders N-25-20, N-29-20, N-08-21 and COVID-19 pandemic protocols. JOINT HOUSING STANDING COMMITTEE MEETING AUGUST 16, 2021 MINUTES PAGE 2 the Future Housing, 2.) Modification of the project scope from market rate to a fully-affordable housing product with 36 Below Market Rate (BMR) units, 3.) Amend the timing for Close of Escrow, and 4.) The reduction in purchase price from $1,100,000 to a land donation. Victor Lo and Galen Ma, Baden Developments LLC thanked the HSC for the opportunity to speak. They provided a brief overview of the project and how they partnered with For the Future Housing to build the 36 units of affordable housing in South San Francisco. Jim Rendler, Vice President of For the Future Housing introduced himself and was excited about the potential opportunity to work on the project. He stated that For the Future Housing was a for profit developer based out of San Jose that primarily focused on affordable housing projects. Vice Mayor Nagales inquired how many of the 36 units were 30% Area Median Income (AMI). Mr. Rendler stated they were targeting about 10 units. Vice Mayor Nagales appreciated that the project was 100% affordable units. Mr. Rendler noted they would do income certifications on all the tenants and would be capped to where the tenants would not pay any more than 30% of their income. Planning Commissioner Faria asked staff whether the land transfer would occur until financing was secured. Coordinator Barnard stated typically staff would wait for developers to get all project financing, but because this project was a slightly different structure, once they secured acquisition financing that is when staff would expect to convey the property. Planning Commission Vice Chair Shihadeh queried whether someone low income and utilizing Section 8 would qualify for a unit. Mr. Rendler advised they would generally qualify depending on what their income level was. Vice Chair Shihadeh stated there was a great need of affordable housing for teachers and retirees and inquired where those types of residents fit on the equation. Deputy Director Selander stated that in past projects teachers in the South San Francisco Unified School District had been notified early to ensure they submit their application and enter the lottery. Mayor Addiego inquired about the status on affordable housing funds. Deputy Director Selander stated the latest funds were about $3 million that were uncommitted. Planning Commission Chair Evans inquired on the resources or services, if any, would be available on site for physically disabled tenants. Mr. Rendler advised that they generally would do resin services that were not targeted to one specific population type. He stated that they partner with organizations that specialize in those services with good success. The following provided public comment: • Leslie Fong 3. Study session for a Use Permit, Design Review, and Zoning Map Amendment to construct a Mixed-Use Development, consisting of 99 residential units, ground-floor parking and a 1,500 square foot restaurant at 421 Cypress Avenue, 209 & 213 Lux Avenue. (Stephanie Skangos, Associate Planner) JOINT HOUSING STANDING COMMITTEE MEETING AUGUST 16, 2021 MINUTES PAGE 3 Associate Planner Skangos and Check F. Tang from Studio T-SQ, provided a brief overview of the project and staff report and let the applicants provide a more in-depth description of the proposed project, including preliminary community benefits proposed and affordable housing. The project site consisted of three parcels with a corner parcel with frontages on Lux and Cypress Avenues and Tamarack Lane. The three parcels were developed with an existing restaurant (Bertolucci’s), six residential units, and a surface parking lot, which would be demolished. The proposed building would contain six stories of residential units over a ground-floor parking garage and project amenities, including leasing offices. The parking garage would provide a total of 99 parking spaces, which would consist of 90 parking stalls in stackers and nine at-grade parking stalls, five of which would be ADA-compliant. A 1,500 square foot restaurant and plaza would also be located on the ground floor at the corner of Cypress and Lux Avenues. The upper levels would provide a total of 99 for-rent residential units, consisting of a mix of studio, one, and two-bedroom units, ranging in size from 560 square feet to 1,610 square feet. The entitlements request for the project included: • A zoning map amendment (rezone) for a portion of the site to a higher-density district; • Conditional Use Permit (for multi-family residential, use of the Downtown Station Area Specific Plan (DSASP) Increased Density Incentive Program, and a parking reduction); • Design Review; • Transportation Demand Management Plan; and • CEQA consistency with the DSASP Environmental Impact Report. The project’s total required parking spaces was 112. The proposed parking spaces for the garage consisted of 99 spaces, so the parking reduction request was for a total of 13 parking spaces and the applicant would be required to submit a preliminary transportation demand management plan and parking demand study to City staff to analyze and review and make a determination for a recommendation on the parking reduction. Planning Commission Chair Evans requested confirmation that tenants would not be charged additional rent for their parking spaces. Mr. Tang stated that with one-to-one parking, they could unbundle the parking so tenants did not have to rent the parking spot if they did not need it. Chair Evans discouraged the unbundled parking stating units would no longer be below market rate after paying for the parking space. Planning Commissioner Faria liked the appearance of the building itself, and stated he looked forward to seeing how the project progressed through the process. Vice Mayor Nagales appreciated there were family friendly units with more than one bedroom especially in the downtown area. He suggested individuals living that lived in below market rate units should not be charged for parking. Mayor Addiego inquired how the project would look like if the zoning map amendment did not occur. Associate Planner Skangos stated that if they were to keep split zoning, one parcel would remain in the Downtown Residential Core (DRC) which would be subject to DRC standards. DRC development standards were slightly lower than the Downtown Transit Core (DTC). JOINT HOUSING STANDING COMMITTEE MEETING AUGUST 16, 2021 MINUTES PAGE 4 Mayor Addiego queried the number of units for the property at 213 Lux Avenue with current zoning designation. Associate Planner Skangos stated the property would contain 55 units with the current zoning designation. She advised that rezoning the parcel to DTC would increase the property by three to 58 units. Mr. Tang calculated approximately a 10-unit reduction with the current zoning designation. Mayor Addiego stated zoning amendments created more value to the project and inquired what the city received as far as community benefits. Jennifer Renk, Sheppard Mullin stated that with the split zoning the building would have sort of a “Frankenstein-ish” look due to the difference in height and development standards. The rezone created the uniformity in terms of the design and the building footprint which then allowed them to have a better project for the city and provide additional affordable housing. PUBLIC COMMENTS: • Leslie Fong ADJOURNMENT Being no further business, the meeting was adjourned at 6:27 p.m. Submitted by: Approved by: _______________________________ ______________________________ Gabriel Rodriguez, Deputy City Clerk Mark Nagales, Mayor City of South San Francisco City of South San Francisco Approved by the Housing Standing Committee: / / CALL TO ORDER 4:00 p.m. ROLL CALL Present: Mayor Addiego, Vice Mayor Nagales, Planning Commission Vice Chair Shihadeh, and Commissioner Faria. Absent: Planning Commission Chair Evans. AGENDA REVIEW None. PUBLIC COMMENTS None. MATTERS FOR CONSIDERATION 1. Report regarding Housing Standing Committee study session on the proposed residential development at 1477 Huntington Avenue. (Adena Friedman, Principal Planner) Principal Planner Friedman and Will McPhee, Overton Moore Properties presented a study session on the proposed residential development at 1477 Huntington Avenue. The project proposed a seven- story apartment building, including 262 for-rent units. Thirty-nine units would be provided at rates affordable to low and very low-income households, consistent with the requirements of the City’s Inclusionary Housing Ordinance. Planning Commissioner Faria inquired whether there was access into the building to retrieve the trash bins in and out of the unit. Mr. McPhee stated the trash bins would be rolled out to a certain point and was working with Scavengers to provide a truck group plan to service the project. MINUTES SPECIAL MEETING OF THE HOUSING STANDING COMMITTEE OF THE CITY COUNCIL AND PLANNING COMMISSION CITY OF SOUTH SAN FRANCISCO P.O. Box 711 (City Hall, 400 Grand Avenue) South San Francisco, California 94083 MONDAY, NOVEMBER 15, 2021 4:00 p.m. Teleconference via Zoom Housing Standing Committee conducted this meeting in accordance with California Governor Newsom’s Executive Orders N-25-20, N-29-20, N-08-21 and COVID-19 pandemic protocols. SPECIAL JOINT HOUSING STANDING COMMITTEE MEETING NOVEMBER 15, 2021 MINUTES PAGE 2 Planning Commission Vice Chair Shihadeh was concerned with all the recently approved buildings that were going up were all flat and inquired if they can get some setbacks with different units to give it a different look. He suggested putting a number for affordable units to help explain to residents that could potentially move in. Principal Planner Friedman advised that two thirds of the 15% that the city was required to provide affordable housing would be at the low-income level, and then another one third would be at the very low-income level. She confirmed that staff could correspond to those numbers and would have those numbers in the next staff report for the project. Planning Commission Vice Chair Shihadeh inquired whether parking would be bundled. Mr. McPhee believed currently parking would be bundled. Vice Mayor Nagales queried how many Below Market Rate (BMR) units were going to studios, one- bedroom, and two-bedroom units. Principal Planner Friedman advised that they had not had that discussion yet with the applicants but would certainly have that discussion prior to moving forward with the project. Vice Mayor Nagales inquired whether the BMR units would have a local live/work preference. Deputy Director Selandar stated the City’s standard affordable housing agreement included a live/work preference for South San Francisco residents and/or people that work in South San Francisco to the extent that was allowed by fair housing law. City Manager Futrell advised that the City recently adopted reach codes preventing gas appliances and new residential construction and would have to look and see how that applied to this project. He inquired whether the developer was planning to use gas in any form, in construction of the residential units and, if so, how might the developer intend to use natural gas. Lily Trinh Ciammaichella, KTGY stated they were all about making their buildings more sustainable and trying to grow net zero as a company and advised that going fully electric would not be an issue. PUBLIC COMMENTS: • Leslie Fong ADJOURNMENT Being no further business, the meeting was adjourned at 4:42 p.m. Submitted by: Approved by: _______________________________ ______________________________ Gabriel Rodriguez, Deputy City Clerk Mark Nagales, Mayor City of South San Francisco City of South San Francisco Approved by the Housing Standing Committee: / / CALL TO ORDER 5:00 p.m. ROLL CALL Present: Mayor Nagales, Councilmember Addiego, Planning Commission Chair Evans, Planning Commission Vice Chair Shihadeh, and Planning Commissioner Faria. AGENDA REVIEW None. PUBLIC COMMENTS None. MATTERS FOR CONSIDERATION 1. Report regarding a proposed spending plan for the City’s affordable housing funds. (Julie Barnard, Acting Deputy Director of Economic and Community Development, and Deanna Talavera, Management Analyst II) Management Analyst Talavera and Economic and Community Development Director Selandar presented the proposed spending plan for the City’s affordable housing funds. Councilmember Addiego inquired about the Rental Assistance Program and how many of the 210 families that used the program were still in the community. Management Analyst Talavera stated she would ask the YMCA for specifics and stated most of the people helped were one month of back rent due to COVID-19 related loss of income. Planning Commission Chair Evans inquired where the philosophy of leasing land to developers rather than selling it came from. She stated that from a developer standpoint, that construct was not very enticing. Management Analyst Talavera advised that the City had a history of long-term leases MINUTES SPECIAL MEETING OF THE HOUSING STANDING COMMITTEE OF THE CITY COUNCIL AND PLANNING COMMISSION CITY OF SOUTH SAN FRANCISCO P.O. Box 711 (City Hall, 400 Grand Avenue) South San Francisco, California 94083 MONDAY, JANUARY 24, 2022 5:00 p.m. Teleconference via Zoom Housing Standing Committee may meet by teleconference, consistent with the Brown Act as amended by AB 361 (2021. Under the amended rules, the City will not provide a physical location for members of the public to participate in the teleconference meeting. SPECIAL JOINT HOUSING STANDING COMMITTEE MEETING JANUARY 24, 2022 MINUTES PAGE 2 that allowed the City to have some site control. Leasing gave the City an opportunity to ensure that the City’s vision continues to be met. Planning Commission Vice Chair Shihadeh inquired about the commercial linkage fee and asked for clarification. Director Selandar stated that the commercial linkage fee could only be spent on affordable housing development and could not be spent on a transportation infrastructure project. Mayor Nagales agreed with other members that leasing the land to developers gave the City more control of the land to maximize the amount of affordable housing. Councilmember Addiego inquired whether housing ground lease agreements were generally 55 years. Director Selandar advised that housing ground lease agreements could be from up to 99 years. Management Analyst Talavera thanked the Housing Standing Committee members for their feedback and advised she would incorporate the information and bring back to the City Council for approval. 2. Report regarding an analysis of the City of South San Francisco’s Inclusionary Housing Ordinance and incentives to provide additional affordable housing units. (Julie Barnard, Acting Deputy Director of Economic and Community Development, and Deanna Talavera, Management Analyst II) Acting Deputy Director Barnard presented the preliminary findings in the review of the inclusion rehousing ordinance and some potential incentives. Mayor Nagales queried about reduced parking and encouraged residents to take alternative modes of transportation. He inquired about the alternative inclusionary requirements and asked for clarification from staff. Acting Deputy Director Barnard stated the developer could produce fewer units with a much lower level of affordability and or, alternatively, more units at higher level of affordability. Planning Commission Chair Evans recommended staff expanded on how they arrived at the loss of revenue for infrastructure and what incentives does the City offer for developers who increase their inclusionary units. Acting Deputy Director Barnard advised that aside from the City bonus and developers utilizing the State density bonus, the City did not offer any other incentives. Planning Commission Vice Chair Shihadeh stated that the City had made a lot of progress, the last couple of years by adding the inclusionary units, and giving developers additional options. He believed the City was heading in the right direction. Acting Deputy Director Barnard thanked the Housing Standing Committee members for their feedback and advised she would incorporate the information and bring back to the City Council for approval. ADJOURNMENT SPECIAL JOINT HOUSING STANDING COMMITTEE MEETING JANUARY 24, 2022 MINUTES PAGE 3 Being no further business, the meeting was adjourned at 6:20 p.m. Submitted by: Approved by: _______________________________ ______________________________ Gabriel Rodriguez, Deputy City Clerk Mark Nagales, Mayor City of South San Francisco City of South San Francisco Approved by the Housing Standing Committee: / / City of South San Francisco Legislation Text P.O. Box 711 (City Hall, 400 Grand Avenue) South San Francisco, CA File #:22-199 Agenda Date:3/21/2022 Version:1 Item #:2. Study session regarding a proposed ballot measure authorizing the City of South San Francisco to develop, construct, or acquire affordable, low-rent housing units pursuant to Article XXXIV of the California Constitution and to provide direction to staff. RECOMMENDATION It is recommended that the Housing Standing Committee receive the following report and provide direction to staff regarding a potential Article 34 ballot measure authorizing the City of South San Francisco to develop, construct, or acquire affordable, low-rent housing units and the proposed percentage of housing units that would be so authorized if the measure were to be adopted by the voters. (Sky Woodruff, City Attorney and Julie Barnard, Acting Deputy Director, Economic & Community Development Department) BACKGROUND At the City Council study session on February 16, 2022, ECD and City Attorney staff presented a draft ballot measure regarding Article 34 authorization which, if approved by the voters, would authorize the City to develop, construct, or acquire low-rent housing for a period of thirty (30) years. The specific ballot measure question is as follows: Without increasing local taxes, shall the City of South San Francisco be authorized to develop, construct, and/or acquire affordable, decent, and safe rental housing for low-income persons, including families, seniors, people with disabilities, and veterans, in an amount up to 1% of the total number of existing housing units in the City of South San Francisco annually for a thirty (30) year period, with any year’s unused units being carried over each year? The City Council provided direction to move forward with placing the proposed measure on the November 2022 election ballot. The proposed ballot measure will return to the City Council by August 2022 for formal approval and adoption of a resolution placing it on the November 2022 ballot. The City Council also desired to further understand the methodology used to determine the 1% allocation proposed by the draft ballot measure. The Council ultimately directed the proposed percentage be referred to the Housing Standing Committee for further review and comments. The Housing Standing Committee is holding this study session to consider the issue. DISCUSSION Overview of Article 34 Requirements Article XXXIV of the California Constitution (“Article 34”) requires that a city’s voters grant prior approval before any federal, state, or local public entity can develop, construct, or acquire certain types of low rent housing projects in that city. The requirements of Article 34 are implemented by Health & Safety Code section 37000 et seq. This statute specifically define certain terms, including: City of South San Francisco Printed on 4/12/2022Page 1 of 5 powered by Legistar™ File #:22-199 Agenda Date:3/21/2022 Version:1 Item #:2. ·“Low Rent Housing Project” means any urban or rural dwellings, apartments, or other living accommodations for low income residents, financed in whole or in part by a federal, state, or local government. ·“Low income” means households earning 80% or less of area median income. In San Mateo County, this includes a single individual earning less than $102,450 a year, or a household of four earning less than $146,350. ·“Financed in whole or in part by a federal, state, or local government” includes supplying labor, guaranteeing payment of liens, or other forms of financing. Consequently, a public entity may not develop, construct, or acquire low rent housing projects until the voters have authorized the public entity to do so. While the scope of Article 34 is broad, statutory exemptions exist that exclude certain types of projects from Article 34’s voter approval requirements, and that specify that certain public entity actions are not considered as developing, constructing, or acquiring a low rent housing project. The staff report prepared for the February 16, 2022 City Council study session, included as Attachment A, contains a detailed summary further describing the requirements of Article 34 and the types of projects exempted. Proposed Ballot Measure and the Number of Units Authorized The proposed draft ballot measure, if approved by the voters, would authorize the City to do the following: ·Develop, construct, and/or acquire affordable rental housing for low-income persons; ·The number of units authorized would be in an amount “up to 1% the total number of existing housing units in the City” for a thirty (30) year period; and ·Any unused portion of each year’s authorized units will be carried over to subsequent years. Consequently, the total number of units authorized will grow each year. The 1% annual authorization does not expire at the end of a year. At the February 16, 2022 study session, the City Council desired to further explore the 1% allocation proposed above. This report discusses the methodology and rationale for proposing the 1% allocation, and also presents an alternative where a higher percentage of units is used. (1)1% Housing Units Allocation The Department of Finance (“DOF”) publishes annual data determining the number of existing housing units in local jurisdictions. DOF currently lists the total number of housing units in the City as 22,495. The proposed ballot measure, as written and if approved, would authorize the City to develop and/or acquire units in the amount of 1% of this figure annually. Any units unused in the prior year would be carried over to the next. Assuming that each year’s allotment of units is used, and that the number of units from the prior year(s) are added to the total number of housing units existing in the City that is used to calculate next year’s 1% allotment, the number of units authorized under the proposed draft ballot measure above would be as follows for a five year period (assuming no other growth in the number of units in the City): City of South San Francisco Printed on 4/12/2022Page 2 of 5 powered by Legistar™ File #:22-199 Agenda Date:3/21/2022 Version:1 Item #:2. Table A:assuming each year’s 1% allotment is used 2022 2023 2024 2025 2026 Est. Total Units Authorized Per Year* 225 227 229 232 234 *Numbers have been rounded to their next whole unit for all tables. As previously mentioned, there is no requirement that each year’s allotment be used - in that case, the units authorized in the previous year would roll over to the next year. For example, if 225 units are authorized in 2022 but no units are developed, constructed, or acquired, then the number of units in 2023 that could be developed, constructed, or acquired would be 450 units. This is illustrated for a five-year period in the following table, which assumes no growth in the number of units in the City: Table B:assuming that each year’s 1% allotment of units are not used and rolled over 2022 2023 2024 2025 2026 Est. Total Units Authorized Per Year 225 450 (225+225)675 (450+225)900 (675+225)1125 (900+225) To select an initial percentage of allotment, ECD and City Attorney staff surveyed data from other California jurisdictions that have placed Article 34 measures on the ballot in the last 10 years. These cities and counties include the City and County of San Francisco, the Counties of Humboldt and Tuolumne, and the Cities of Berkeley, Moorpark, Stockton and San Diego. These jurisdictions have either selected a specific number of units or selected percentage of housing units for authorization. The percentage ranges vary from as low as 3% to as high as 7.5%. However, some jurisdictions utilizing a higher percentage did not appear to allow roll-over units from the prior years. Given the number of existing units in South San Francisco and the time it takes for the City to prepare to construct or acquire affordable units, staff believes 1% is a reasonable and practical starting point for the proposed draft ballot measure. It is important to note that it is unlikely for the City to use up the annual allotment in the first few years, if the proposed ballot measure authorizing 1% of existing units were to be approved. This is because the City would likely have to engage in certain pre-construction or pre-acquisition work, such as locating suitable housing projects or site locations, secure financing, and procuring contractors or consultants. To complete these tasks, the City will probably not commence the acquisition or construction process until a substantial amount of time has passed after the proposed measure is approved by the voter should it occur. Thus, it is more likely that the City will have accumulated several years of authorized housing unit allotments and would be able to acquire or construct that allotment when it is sufficiently prepared to do so. Staff also assumed that, even over a potential 30-year period, there would be a limited number of sites or buildings that the City would be able to acquire to construct new affordable units or to convert existing market- rate units to affordable. City of South San Francisco Printed on 4/12/2022Page 3 of 5 powered by Legistar™ File #:22-199 Agenda Date:3/21/2022 Version:1 Item #:2. (2)Other Scenario: 2% Housing Units Allocation Alternatively, the proposed ballot measure could be revised to authorize 2% (or a higher percentage) of the total number of existing housing units in the City (which, as mentioned above, is 22,495 units based on DOF data). To illustrate, the following table assumes 2% allotment with each year’s allotment used and that the number of units from the prior year(s) are added to the total number of housing units existing in the City that is used to calculate next year’s 2% allotment (assuming no other growth in units) for a five-year period: Table C: assuming each year’s 2% allotment is used 2022 2023 2024 2025 2026 Est. Total Units Authorized Per Year 450 459 468 477 487 The table below illustrates the number of units authorized, if the 2% annual allotment is not used and rolled over. In this illustration, the City would be authorized to construct or acquire units equal to 2% of existing housing stock, and because the allotment is not used, it is rolled over and added to the previous year’s allotment (after the first year). Again, as with previous tables, the calculation assumes no growth in the total number of units in the City over the five-year period. Table D: assuming each year’s 2% allotment is not used and rolled over 2022 2023 2024 2025 2026 Est. Total Units Authorized Per Year 450 900 (450+450)1,350 (950+450) 1,800 (1,350+450) 2,250 (1,800+450) It is worth reiterating that, because the foregoing tables under both scenarios assumed no growth in the total number of units in the City over the five-year illustration period (other than the authorized units built in the hypothetical illustrated in Tables A and C), the actual number of units allotted for each year (whether or not any portion of the allotment is used or carried over to the following year) are likely to be higher. General Plan The first goal set out in the Housing Plan of the City’s Housing Element is to promote the provision of housing by both the private and public sectors for all income groups in the community. This goal includes promoting the development of housing for extremely low-, very low-, and lower-income households. Submission of an Article 34 ballot measure question to the voters has the potential to contribute to this goal and would be consistent with the City’s General Plan, including its Housing Element. FISCAL IMPACT This report is submitted for discussion purposes only and does not impact the City financially. City of South San Francisco Printed on 4/12/2022Page 4 of 5 powered by Legistar™ File #:22-199 Agenda Date:3/21/2022 Version:1 Item #:2. CONCLUSION It is recommended that the Housing Standing Committee receive the foregoing report and provide direction to staff. Attachment:February 16, 2022 City Council Study Session Staff Report City of South San Francisco Printed on 4/12/2022Page 5 of 5 powered by Legistar™ P.O. Box 711 (City Hall, 400 Grand Avenue) South San Francisco, CA City of South San Francisco Legislation Details (With Text) File #:22-110 Name: Status:Type:Study Session Agenda Ready - Administrative Business File created:In control:2/8/2022 Special City Council On agenda:Final action:2/16/2022 Title:City Council study session to consider a potential ballot measure authorizing the City of South San Francisco to develop, construct, or acquire affordable, low-rent housing units pursuant to Article XXXIV of the California Constitution and to provide direction to staff. (Sky Woodruff, City Attorney and Nell Selander, Director, Economic & Community Development Department) Sponsors: Indexes: Code sections: Attachments:1. eComments - Item 3.pdf Action ByDate Action ResultVer. City Council study session to consider a potential ballot measure authorizing the City of South San Francisco to develop, construct, or acquire affordable, low-rent housing units pursuant to Article XXXIV of the California Constitution and to provide direction to staff.(Sky Woodruff, City Attorney and Nell Selander, Director, Economic & Community Development Department) RECOMMENDATION It is recommended that the City Council receive the following report regarding a potential ballot measure authorizing the City of South San Francisco to develop, construct, or acquire affordable, low- rent housing units pursuant to Article XXXIV of the California Constitution and provide direction to staff. BACKGROUND Historical Context and Scope Article XXXIV of the California Constitution (“Article 34”) was approved in 1950 as Proposition 10, and was implemented by statute in 1976 under Health & Safety Code section 37000 et seq. It requires that a city’s voters grant prior approval before any federal, state, or local public entity can develop, construct, or acquire certain types of low rent housing projects in that city. Under the statute, “low rent housing project” means any urban or rural dwellings, apartments, or other living accommodations for low income residents, financed in whole or in part by a federal, state, or local government. “Low income” is defined as households earning 80% or less of area median income. In San Mateo County that is a single individual earning less than $102,450 a year, or a household of four earning less than $146,350. “Financed in whole or in part by a federal, state, or local government” includes supplying labor, guaranteeing payment of liens, or other forms of financing. A public entity may not develop, construct, or acquire low rent housing projects until the voters have authorized the public entity to do so. While the scope of Article 34 is broad, statutory exemptions exist that exclude certain types of projects from City of South San Francisco Printed on 3/15/2022Page 1 of 5 powered by Legistar™ File #:22-110,Version:1 Article 34’s voter approval requirements, and that specify that certain public entity actions are not considered as developing, constructing, or acquiring a low rent housing project. Projects Exempt from Article 34 In 1976, the Legislature enacted the Public Housing Election Implementation Law (the “Public Housing Law”), California Health & Safety Code §§ 37000 et seq., to clarify ambiguities relating to the scope of the applicability of Article 34. The statute exempts eight (8) types of development from the voter approval requirement. These exemptions were most recently amended on July 19, 2021 in response to the COVID-19 pandemic, and include: 1)Privately owned housing that is (1) subject to property tax or exempt from property tax under a limited set of exemptions, and (2) not required by a public entity to reserve more than 49% of units for low- income households. 2)Privately owned housing not exempt from property taxes by reason of any public ownership, and not financed with direct long-term financing from a public entity; 3)Units intended for owner-occupancy, which may include a limited equity housing cooperative, cooperative or condominiums; 4)Privately owned, newly constructed one-to-four family dwellings not located on adjoining sites; 5)Existing dwelling units leased by the public entity from a private owner; 6)Rehabilitation, reconstruction, improvement or addition to, or replacement of an existing low-rent housing project or a project previously or currently occupied by lower income households; 7)Acquisition, rehabilitation, reconstruction or improvement of a rental housing development which was subject to a federal or state public entity contract for assistance to provide affordable housing for low- income households and maintains, or enters into, a contract for federal or state public entity assistance for the same purpose; and 8)Acquisition, rehabilitation, reconstruction, alterations work or new construction of lodging facilities or dwelling units using any of the following sources of funds: a.the Coronavirus Aid, Relief, and Economic Security (“CARES Act”) b.the American Rescue Plan Act of 2021 (“ARPA”) c.Funds appropriated pursuant to various provisions of the Health and Safety Code relating to affordable housing preservation, loans and grants to qualified rental housing developments, and multifamily housing programs. Public Entity Actions Exempt from Article 34 The California Supreme Court has held that if a public entity is sufficiently involved in a privately owned project (i.e. provides funds conditioned upon review and approval of plans, financing, operation and maintenance and occupancy), this project may be treated as a “co-development” and Article 34 likely will be triggered under that concept. (California Housing Finance Agency v. Elliot, 17 Cal.3rd 575 (1976).) However, the public entity is still able to take certain actions with respect to housing projects that would not be considered as the public entity developing, constructing, or acquiring the project. The Public Housing Law exempts the following activities from the meaning of “develop, construct or acquire” by a public entity: City of South San Francisco Printed on 3/15/2022Page 2 of 5 powered by Legistar™ File #:22-110,Version:1 1.Providing financing, secured by a deed of trust or other security instrument to a private owner of existing housing; or acquiring a development, for which financing previously has been provided, as a temporary measure to protect its security and with an intention to change the ownership so that it will not continue to be the owner of a low-rent housing project; 2.Acquiring or making improvements to land which is anticipated to be sold, ground leased, or otherwise transferred to a private owner prior to its development as a low-rent housing project, provided (1) the land and improvements thereon are not subject to an exemption from property taxation by reason of public ownership for more than five years following acquisition or improvement by the state public body, or (2) such an exemption from property taxation persists beyond the five-year period and no alternative use is designated for the land or improvements, but any property tax revenues lost by affected taxing agencies on account of the exemption of land or improvements from property taxes by reason of public ownership of the property, or any interest in the property after the five-year period, are fully reimbursed by payments in lieu of taxes following the expiration of the five-year period; 3.Leasing existing dwelling units from the private owner of such units, provided the lease or a subtenancy thereunder does not result in a decrease of property tax revenues with respect to the dwelling units leased; 4.Providing assistance to the private owner or occupant of existing housing which enables an occupant to live in decent, safe, and sanitary housing at a rent he or she can afford to pay; 5.Providing assistance to a low-rent housing project and monitoring construction or rehabilitation of that project and compliance with conditions of that assistance to the extent of: a.Carrying out routine governmental functions. b.Performing conventional activities of a lender. c.Imposing constitutionally mandated or statutorily authorized conditions accepted by a grantee of assistance. 6.Providing assistance to a development prior to its becoming a low-rent housing project without intending or expecting that the development will become a low-rent housing project, as defined. 7.Providing financing for a low-rent housing project pursuant to Chapter 6.7 (commencing with Section 51325) of Part 3 of Division 31. 8.Providing financing for a low-rent housing project pursuant to Article 3.2 (commencing with Section 987.001) and Article 5y (commencing with Section 998.540) of Chapter 6 of Division 4 of the Military and Veterans Code. Article 34 Voter Approval Process The City Council may submit a ballot measure for voters to approve the City developing, constructing or acquiring low rent housing. The California Supreme Court has held that a local entity does not have to seek approval for a specific development or project, but may instead seek approval from its voters to develop, construct, or acquire a certain amount of low income housing units. (Davis v. City of Berkeley, 51 Cal.3d 227 (1990).) Additionally, the California Supreme Court held in Davis that “article XXXIV does not prescribe a single form of ballot measure.” Therefore, an Article 34 ballot measure may be submitted for voter approval without a City of South San Francisco Printed on 3/15/2022Page 3 of 5 powered by Legistar™ File #:22-110,Version:1 petition under Election Code Section 9222 and may be approved by a majority vote of voters pursuant to Election Code section 9217. DISCUSSION Text of Proposed Ballot Question Based on feedback from the City Council at previous study sessions, staff has developed an approach to a potential Article 34 measure and prepared a draft ballot measure question which, if approved by the voters, would authorize the City to develop, construct, or acquire low-rent housing for a period of thirty (30) years. Instead of providing authorization for a set number of units which could be developed each year, the draft ballot measure would authorize the City to develop, construct, or acquire an amount of units equal to 1% of the total number of units existing in the City from year to year over the course of a thirty (30) year period. The measure would include an ordinance addressing the details of the approach. The ballot question is limited by state law to 75 words. The draft ballot measure question reads as follows: Without increasing local taxes, shall the City of South San Francisco be authorized to develop, construct, and/or acquire affordable, decent, and safe rental housing for low-income persons, including families, seniors, people with disabilities, and veterans, in an amount up to 1% of the total number of existing housing units in the City of South San Francisco annually for a thirty (30) year period, with any year’s unused units being carried over each year? If approved by the voters, the draft ballot measure would only provide authorization for the City to develop, construct, or acquire the designated number of units - the authorization is purely permissive. If approved by the voters, the City would be under no obligation to take any action pursuant to the granted authorization. Potential Volume of Authorized Units The approach that staff is suggesting for the potential ballot measure would authorize the City to develop, construct, or acquire up to 1% of the total number of existing housing units in the City annually for a thirty (30) year period. The total number of existing housing units in the City would be the number of existing housing units per year as determined by annual data from the State of California Department of Finance (“Department of Finance”). The Department of Finance currently lists the total number of housing units in the City as 22,495. Using this number as a starting point, Table 1 below provides an example of the number of units that the City would be authorized to develop, construct, or acquire over a five year period if the ballot measure as written were to be submitted to and approved by the voters. The figures in Table 1 assume that each year’s allotment of units is used and that the prior years’ number of units is capitalized into the total number of housing units which exist in the City for the purposes of calculating 1% of existing housing units in the City. Table 1 2022 2023 2024 2025 2026 Est. Total Units Authorized Per Year 225 227 229 232 234 *Numbers have been rounded to their next whole unit. City of South San Francisco Printed on 3/15/2022Page 4 of 5 powered by Legistar™ File #:22-110,Version:1 2022 2023 2024 2025 2026Est. Total Units Authorized Per Year 225 227 229 232 234 *Numbers have been rounded to their next whole unit. As previously mentioned, there is no requirement that each year’s allotment be used - in that case, the units authorized in the previous year would roll over to the next year. For example, if 225 units are authorized in 2022 but no units are developed, constructed, or acquired, then the number of units in 2023 that could be developed, constructed, or acquired would be 450 units. General Plan The first goal set out in the Housing Plan of the City’s Housing Element is to promote the provision of housing by both the private and public sectors for all income groups in the community. This goal includes promoting the development of housing for extremely low-, very low-, and lower-income households. Submission of an Article 34 ballot measure question to the voters has the potential to contribute to this goal and would be consistent with the City’s General Plan, including its Housing Element. FISCAL IMPACT This report is submitted for discussion purposes only and does not impact the City financially. Ballot Measure Costs San Mateo County Elections Office has provided a high/low estimate of the costs of placing the proposed measure on the ballot for the June 2022 Statewide Election. These estimates appear in Table 2 below. Table 2 Total Cost Low $/Register Voters Low Total Cost High $/Registered Voters High $172,200 $4.53 $206,600 $5.44 Based on these estimates, if the City Council decides to submit an Article 34 ballot measure to the people for consideration at the upcoming June 2022 election, the City Council will need to approve a budget amendment to the City Clerk’s Fiscal Year 2022-23 Operating Budget. CONCLUSION It is recommended that the City Council receive the foregoing report regarding a potential ballot measure authorizing the City of South San Francisco to develop, construct, or acquire affordable, low-rent housing units pursuant to Article XXXIV of the California Constitution and provide direction to staff. City of South San Francisco Printed on 3/15/2022Page 5 of 5 powered by Legistar™ Agenda Item 2. 22-199 Study session regarding a proposed ballot measure authorizing the City of South San Francisco to develop, construct, or acquire affordable, low-rent housing units pursuant to Article XXXIV of the California Constitution and to provide direction to staff. Legislation Text Attachment 1- 021622 CC Staff Report 1 Public Comment Sylvia Warnes at March 19, 2022 at 10:19am PDT Oppose Please do not approve this measure. We do not need these low rent units! You have already overloaded our little town with huge monstrosities of apartments, etc! You think we are San Francisco or Los Angeles! We are a suburb community and want to remain as such. Already you have caused huge traffic problems all over our small community. Please stop this uncontrolled over reach. Please think of your constituents for a change. Already you are asking for money to support your new civic center, did you overspend, underbidget? This new proposal would end up with more reaching into the residents pockets. Please stop and think!