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HomeMy WebLinkAboutReso 123-2018 (18-717)File Number: 18 -717 City of South San Francisco P.O. Box 711 (City Hall, 400 Grand Avenue) South San Francisco, CA City Council Resolution: RES 123 -2018 Enactment Number: RES 123 -2018 RESOLUTION AUTHORIZING THE CITY COUNCIL OF THE CITY OF SOUTH SAN FRANCISCO TO ESTABLISH AND SET AN EFFECTIVE DATE FOR AN AFFORDABLE HOUSING COMMERCIAL LINKAGE FEE FOR NEW COMMERCIAL DEVELOPMENT IN THE CITY PURSUANT TO SOUTH SAN FRANCISCO MUNICIPAL CODE CHAPTER 8.69. WHEREAS, the City of South San Francisco ( "City ") aims to provide sufficient levels of affordable housing for its residents; and WHEREAS, on April 8, 2015 the City Council of the City of South San Francisco adopted its 2015 -2023 Housing Element; and WHEREAS, Housing Element Chapter 6.1 "Promote New Housing Development" includes Goal I to "promote the provision of housing by both the private and public sectors for all income groups in the community;" and WHEREAS, Implementing Policy I -3 of the Housing Element provides that "[a]s feasible, the City will investigate new sources of funding for the City's affordable housing programs;" and WHEREAS, Program I -3A of the Housing Element provides that "[t]hrough participation in the 21 Elements group, the City will investigate the feasibility of commercial and housing linkage fees to support affordable housing;" and WHEREAS, the City may adopt and impose commercial linkage fees to mitigate the impact of commercial development projects on the need for affordable housing in the City under the authority of Sections 6600 et seq. of the California Government Code ( "Mitigation Fee Act "); and WHEREAS, there is a reasonable relationship between the need for affordable housing and the impacts of commercial development within the City, and there is also a reasonable relationship between the fee's use and the impacts of commercial development; and WHEREAS, development of new commercial projects encourages new residents to move to the City, and some of the employees needed to meet the needs of new commercial development earn incomes only adequate to pay for affordable housing; and WHEREAS, because affordable housing is in short supply within the City, these employees might otherwise City of South San Francisco Page 1 File Number. 18 -717 Enactment Number. RES 123 -2018 be forced to live in less- than - adequate housing within the City, pay a disproportionate share of their incomes to live in adequate housing within the City, or commute ever - increasing distances to their jobs from housing located outside the City, thereby harming the City's ability to attain goals articulated in the City's General Plan; and WHEREAS, to ensure that future development projects mitigate their impact on the need for affordable housing in South San Francisco, and to ensure that any adopted commercial linkage fees do not exceed the actual affordable housing impacts attributable to the development projects to which the fees relate, the City agreed to participate in the preparation of a nexus study through the countywide 21 Elements collaboration project; and WHEREAS, the City had prepared an impact study entitled "Commercial Linkage Nexus Study" completed by Strategic Economics and Vernazza Wolfe Associates, Inc. dated July 2015, ( "Nexus Study "), copies of which are on file in the Office of the City Clerk and Economic Development and Housing Division and are hereby made a part of this Resolution by reference; and WHEREAS, the Nexus Study employs widely used, appropriate methodology to determine the maximum amount needed to fully mitigate the burdens created by commercial development on the need for affordable housing; and WHEREAS, the Nexus Study establishes that there is a reasonable relationship between the commercial linkage fees and the commercial development on which it is imposed and between the need for affordable housing and the commercial development projects against which the fee is charged, pursuant to Government Code Section 66001; and WHEREAS, the Nexus Study has found that there is a nexus between new commercial floor area, the creation of jobs, and the demand for very low, low, and moderate - income housing for new employees; and WHEREAS, the fee will be used solely to increase the supply of housing affordable to very low, low, and moderate - income employees; and WHEREAS, the fees will be placed in a separate fund and used exclusively for the development of affordable housing within the City; and WHEREAS, to ensure that development projects remain economically feasible, the City prepared a commercial linkage fees analysis, dated July 2018 to reflect financial feasibility given current market conditions and existing development fees in the City; and WHEREAS, based on the July 2018 analysis, the recommended commercial linkage fees as shown in Exhibit A are lower than the maximum amount needed to fully mitigate the burdens created by new development on the need for affordable housing as determined by the Nexus Study; and WHEREAS, to implement the affordable housing goals, policies, and programs of the City's 2015 -2023 Housing Element, the City Council has considered and adopted on this same date an ordinance amending City of South San Francisco Page 2 File Number: 18 -717 Enactment Number. RES 123 -2018 Municipal Code Chapter 8.69 to establish an affordable housing commercial linkage fees for new commercial development in the City to mitigate the impact of commercial development projects on the need for affordable housing in the City (the "Ordinance "); and WHEREAS, upon adoption, the Ordinance authorizes the City Council to adopt and establish by resolution commercial linkage fees for commercial development; and WHEREAS, the City Council now desires to set the commercial linkage fees for certain commercial development projects, which fees shall not exceed the estimated reasonable cost of mitigating the actual affordable housing impacts attributable to the commercial development projects for which the fee is imposed, pursuant to Government Code Section 66005, as determined by the Nexus Study; and; WHEREAS, at least fourteen (14) days prior to the public hearing at which the Ordinance and this Resolution was considered, notice of the time and place of the hearing was mailed to eligible interested parties who filed written requests with the City for mailed notice of meetings on new or increased fees or service charges, in accordance with Government Code Section 66019; and WHEREAS, at least ten (10) days prior to the public hearing at which the Council considered the Ordinance and this Resolution, the Nexus Study was available for public inspection, review and comment in accordance with Government Code Section 66019; and WHEREAS, ten (10) days advance notice of the public hearing at which the Ordinance and this Resolution on the proposed fee was published twice in the manner set forth in Government Code Section 6062a as required by Government Code Section 66004 and Section 66018; and WHEREAS, the action taken by the Ordinance and this Resolution has no potential for physical effects on the environment because it involves an adoption of certain Fees and/or charges imposed by the City, does not commit the City to any specific project, and said Fees and/or charges are applicable to future development projects and/or activities, each of which future projects and/or activities will be fully evaluated in full compliance with the California Environmental Quality Act ( "CEQA ") when sufficient physical details regarding said projects and/or activities are available to permit meaningful CEQA review (See CEQA Guidelines, Section 15004(b)(1)). Therefore, approval of the fees and/or charges is not a "project" for purposes of CEQA, pursuant to CEQA Guidelines, Section 15378(b)(4); and, even if considered a "project" under CEQA, is exempt from CEQA review pursuant to CEQA Guidelines Section 15061(b)(3) because it can be seen with certainty that there is no possibility that approval of the Fees and /or charges may have a significant effect on the environment; and WHEREAS, pursuant to the Mitigation Fee Act, the City seeks to adopt this Resolution to set the commercial linkage fees as authorized under the Ordinance in order to mitigate the impacts caused by new commercial development by providing for the payment of development impact fees necessary for the City to maintain desirable levels of affordable housing for new and existing residents; and NOW, THEREFORE, BE IT RESOLVED, by the City Council of the City of South San Francisco: City of South San Francisco Page 3 File Number: 18 -717 Enactment Number: RES 123 -2018 The foregoing recitals are true and correct and incorporated into this Resolution herein by reference. The findings of the Nexus Study have been considered and are hereby incorporated into this Resolution by reference. The facts and substantial evidence in the record establish that there is a reasonable relationship between the need for affordable housing and the impacts of the commercial development described in the Nexus Study for which the corresponding fee is charged, and that there is also a reasonable relationship between the commercial linkage fee's use and the type of commercial development for which the fee is charged, as is described in more detail in the Nexus Study. The Nexus Study sets forth cost estimates that are reasonable for constructing affordable housing, and the fees expected to be generated by new commercial development will not exceed these costs. The City Council hereby adopts these commercial linkage fees for commercial development projects shown on Exhibit "A ", attached hereto and incorporated by reference herein. All commercial linkage fees collected shall be deposited into the Affordable Housing Trust Fund ( "Fund 205 ") to be used to increase and preserve the supply of affordable housing for very low, low, and moderate - incomes, including necessary administrative costs. The City Council may review the commercial linkage fees from time to time. For any annual period during which the City Council does not review the commercial linkage fee, fee amounts may be adjusted by the Administrator as defined in the Ordinance, or his or her designee, according to the change in the Consumer Price Index for all Urban Consumers (CPI -U). The City Council finds that all of the commercial linkage fees adopted pursuant to this Resolution do not exceed the actual affordable housing impacts of the development projects to which those commercial linkage fees relate, as set forth in the Nexus Study. Adoption of this Resolution does not require environmental review pursuant to California Environmental Quality Act (CEQA) Guidelines Section 15378(b)(4), which provides that a "project' within the meaning of CEQA does not include the creation of government funding mechanisms or other government fiscal activities that do not involve any commitment to any specific project that may result in a potentially significant physical impact on the environment. Further, the action taken by the Ordinance and this Resolution has no potential for physical effects on the environment because it involves an adoption of certain Fees and /or charges imposed by the City, does not commit the City to any specific project, and said Fees and/or charges are applicable to future development projects and/or activities, each of which future projects and/or activities will be fully evaluated in full compliance with CEQA when sufficient physical details regarding said projects and/or activities are available to permit meaningful CEQA review (See CEQA Guidelines, Section 15004(b)(1)). City of South San Francisco Page 4 File Number: 18 -717 Enactment Number: RES 123 -2018 This Resolution shall become effective on the date of adoption of this Resolution. In accordance with Government Code Section 66017, the Fees set by this Resolution call be effective 60 days from the effective date of this Resolution, but only if the Ordinance is adopted and effective prior to that date. All project applications deemed complete prior to January 1, 2019 date shall not be subject to this Resolution. At a meeting of the City Council on 8/8/2018, a motion was made by Richard Garbarino, seconded by Liza Normandy, that this Resolution be adopted. The motion passed. Yes: 5 Mayor Normandy, Mayor Pro Tem Matsumoto, Councilmember Garbarino, Councilmember Gupta, and Councilmember Addiego Attest by Ki-i sta City of South San Francisco Page 5 EXHIBIT "A" Commercial Linkage Fees for Commercial Development Projects Commercial linkage fees for commercial development projects shall be calculated using the gross floor area of net new commercial space subject to the commercial linkage fee pursuant to South San Francisco Municipal Code Chapter 8.69. Projects with existing commercial space are entitled to a credit for the original use square footage. Commercial Development Type Fee per Square Foot of Net New Gross Floor Area Hotel $5 Retail, Restaurants and Services $2.50 Office, Medical Office and $15 Research and Development Uses