HomeMy WebLinkAboutOrd. 1560-2018 (18-764)City of South San Francisco RO. Box 711 (City Hall,
400 Grand Avenue)
South San Francisco, CA
City Council
Ordinance: ORD 1560 -2018
File Number: 18 -764 Enactment Number: ORD 1560 -2018
ORDINANCE AMENDING SOUTH SAN FRANCISCO MUNICIPAL
CODE ADDING CHAPTER 8.69 TO ESTABLISH AN AFFORDABLE
HOUSING COMMERCIAL LINKAGE FEE FOR NEW
COMMERCIAL DEVELOPMENT IN THE CITY.
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 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
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File Number. 18 -764
Enactment Number., ORD 1560 -2018
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
demonstrated in the corresponding resolution, 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 proposes to adopt this ordinance adding Municipal Code Chapter
8.69 (the "Ordinance ") to establish an affordable housing commercial linkage fees ( "the Fees ") for new
commercial development in the City to mitigate the impact of commercial development projects on the
need
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File Number. 18 -764 Enactment Number: ORD 1560 -2018
for affordable housing in the City, after a duly noticed public hearing; and
WHEREAS, pursuant to Section 66001 of Mitigation Fee Act, the Ordinance identifies the purpose of
the Fees; the use to which the Fees will be put; determines that there is a reasonable relationship between
the use and the type of development projects on which the Fees will be imposed; determines that there is
a reasonable relationship between the need for the public facilities and the type of development projects
on which the Fees are imposed; and establishes the relationship between the amount of the Fees and the
cost of the public facilities or portion of the public facilities attributable to the development projects
upon which the Fees are imposed; and
WHEREAS, at least fourteen (14) days prior to the public hearing at which the Ordinance 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, 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 was considered
was published in accordance Government Code Section 6062a; and
WHEREAS, the action taken by the Ordinance 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
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF SOUTH SAN FRANCISCO DOES
HEREBY ORDAIN AS FOLLOWS:
SECTION 1. Incorporation of Recitals
The City Council of South San Francisco finds that all Recitals are true and correct and are incorporated
herein by reference.
SECTION 2. Amendments
The City Council hereby adds Chapter 8.69 to Title 8 of the South San Francisco Municipal Code to read
as follows (with text in st-r-ikeeu indicating deletion and double - underlined text indicating addition):
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File Number. 18 -764
Chanter 8.69
AFFORDABLE HOUSING COMMERCIAL LINKAGE FEES
8.69.010 Purpose
8.69.020 Commercial Linkage Fee Findings
8.69.030 Definitions
8.69.040 Commercial Linkage Fees
8.69.050 Fee Payment
8.69.060 Exemptions
8.69.070 Alternatives
8.69.080 Deductions and Credits
8.69.090 Affordable Housing und
8.69. 100 Enforcement
8.69.010 Purpose.
Enactment Number. ORD 1560 -2018
The city council finds and determines that in order to provide sufficient affordable housing to achieve
the city's goal of providing a full range of affordable housing options to residents of the city, in
accordance with the standards established in the general plan housing element and other ap lip 'cable
plans and regulations, development projects identified in Section 8 69 040 below shall pay a commercial
linkage fee in order to mitigate the impacts of these develo_pmentprojects on affordable housing in the
c9 .
(a) Encourage the development and availability of housing affordable to a broad range of households
with varying income levels within the City as mandated by California Government Code Section 65580
et sea
(b) Offset the demand for affordable housing that is created by new commercial development and
mitigate impacts that accompany new commercial development by protecting the economic diversity of
the City's housing stock, traffic transit and related air quality impacts, jobs /housing
balance; and reducing the demands placed on transportation infrastructure in the region
(c) Promote the City's policy to promote the provision of housing by both the private and public sectors
for
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File Number: 18 -764
Enactment Number. ORD 1560 -2018
all income groups in the community, as identified by the Housing Element of the General Plan
(d) Support the Housing Element goal of encouraging high- quality residential development as well as
ensure a full range of affordable housing and the policies and actions that support this goal
(e) Support the Housing Element goal of providing suitable decent and affordable housing for its
residents.
(f) Support the guiding principle of the Housing Element that housing in South San Francisco support s
increasing the range and diversity of housing options that will be an integral aspect of the City's growth
and development.
(g) Support the guiding principle of the Housing Element that South San Francisco values diversity
strives to ensure that all households have equal access to the City's housing resources
(h) Meet the housing needs identified by the Housing Element of the General Plan
(i) Encourage the production of the very low, low, and moderate - income units planned for by
Housing Element of the General Plan.
8.69.020 Commercial Linkage Fee Findings
Commercial Linkage Fee. The city council finds and determines that there is a reasonable relationship
between the commercial linkage fee and the type of development projects to which the fee is imposed
because the development proiects that are subject to the fee outlined in this chapter will place additional
demands on housing, specifically affordable housing in the City. The collected as a result of
this fee will address and mitigate the additional impacts created by these development projects
8.69.030 Definitions.
As used in this chapter, the following terms shall have the following meaning
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File Number: 18 -764 Enactment Number. ORD 1560 -2018
(a) "Administrator" means the Director of Economic and Community Develqpment of the City or other
person designated y the City Manager.
(b) "Affordable housing agreement" means a written agreement between a developer and the City.
(c) "Affordable housing plan" means a plan for a residential development project submitted by a
developer.
(d) `Building permit" includes full structural building permits as well as partial permits such as
foundation -only permits.
(e) "Commercial" use includes hotels; retail uses, restaurants, services, offices medical offices and
research and development uses.
(f) "Commercial development project" means an application fora planning _permit or building permit
that includes the new construction of gross square feet of commercial space or the conversion of a
residential use to a commercial use.
(g) "Commercial linkage fee" means the fee paid by developers of commercial development projects to
mitigate the impacts that such projects have on the demand for affordable housing in the City.
(h) "Developer" means any person property owner, firm partnership association joint venture
corporation, or any entity or combination of entities which seeks City tapprovals for all or part of a
commercial development proiect.
(i) "First approval" means the first discretionary approval to occur with respect to a commercial
development project or, for commercial development projects not requiring a discretiongy gapproval the
issuance of a building permit.
0) "Planning permit" means any discretionary approval of a residential project including but not
limited to
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File Number: 18 -764
Enactment Number: ORD 1560 -2018
a comprehensive or specific plan adoption or amendment rezoning tentative map parcel map,
conditional use permit, variances, or architectural review.
8.69.040 Commercial linkage fees.
The City Council may from time to time adopt by resolution a commercial linkage fee to be imposed on
developers of commercial development projects. Commercial linkage fees shall not exceed the cost of
mitigating the he impact of the commercial development projects on the need for affordable housing in
City
8.69.050 Fee payment
(a) AU commercial linkage fee shall be paid in full at the time of issuance of the first building permit
for the commercial development project subject to the fee or at a time otherwise specified by Council
resolution. If no building permit is required, the fee shall be paid before a conversion of use may take
place. The fee shall be calculated based on the fee schedule in effect at the time the building_ permit is
issued.
(b) Calculation of the Commercial Linkage Fee.
(1) The commercial linkage fee for commercial development projects sbal l be charged on a
per - square -foot basis for all net new gross floor area, including all projects where the floor area is
increased, with a specific per- square -foot amount set for each commercial land use category identified in
Table 8.69.050(b)(5) below. The amount of the fee shall be computed as follows: (Gross Square Feet
Commercial Floor Area Minus Existing Floor Area) X (Current Fee Amount for Applicable Land use
Cate ga) = Commercial Linkage Fee Payment.
(2) The amount of each fee for applicable land use category as identified by Table 8.69.050(b)(5) shall
be established by resolution of the city council, and maybe adjusted annually by tthepercenta percentage change
in the Consumer Price Index for all Urban Consumers (CPI -U).
(3) In calculating the fee under this section, the chief building official or other city official shall use
those fees in effect at the time of the issuance of the building_ permit or, if no building permit is required
at the time
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File Number. 18 -764
of issuance of a use or other discretionary permit.
Enactment Number. ORD 1560 -2018
(4) The City's Chief Planner shall determine the appropriate land use category as set forth in Table
8.69.040(5) below for each new commercial development project.
(5) Commercial Linkage Fee Requirements
Table 8.69.040 (5)
�ommerclal Development Type
lotel
retail, Restaurants and Services
)ffice, Medical Office and Research and Development Uses
8.69.060 Exemptions.
(a) The following commercial development projects are exempt from the provisions of this chqpter•
(1) Retail uses within the City may be exempted at the discretion of the City Council
(2) Public projects or projects undertaken on City propert.
(3) Any structure proposed to repair or replace a building that was damaged or destroyed by fire or other
disaster, so long as the square footage and use of the building remains the same and construction of the
replacement building begins within one year of the damage or destruction
(4) Desirable public uses, such as community facilities and quasi - public uses like childcare centers
churches, and schools may also be exempted at the discretion of City Council
(5) Commercial development projects for which applications have been deemed complete prior to
January 1, 2019.
(b) The City Council ma,by resolution, elect to waive payment of the commercial linkage fee if it fmds
that: (i) the commercial development project is dedicated to a public use owned and operated by other
public agencies or a nonprofit public benefit corporation: and (ii) the benefits to the community provided
by such public use exceed those that would be provided by the payment of the commercial linkage fee If
the City Council elects to waive commercial linkage fees pursuant to this provision the public use of the
site shall be guaranteed by a recorded document in a form acceptable to the City Attorney
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File Number: 18 -764
Enactment Number: ORD 1560 -2018
(c) The City Council by resolution may adopt additional exemptions from time to time
8.69.070 Alternatives.
(a) A developer may propose the construction of affordable residential units as an alternative to the
payment of the commercial linkage fee by submitting an affordable housing plan which shall be
approved by the City Council, it its discretion.
(b) If the alternative is approved, the developer shall enter into an affordable housing agreement with the
Cim.
8.69.080 Deductions and Credits
(a) Chance of Use. When a development project changes from a lower impact use to a higher impact
use, the fee to be paid shall be calculated on the net change based on the pre - existing use and
corres ondin fee equirements of the new use.
(b) Land Dedication. Upon approval by City Council in its discretion a developer may dedicate land
within the City of South San Francisco for the purpose of building affordable housing If land dedication
is approved by the City Council, the developer may deduct the fair market land value from the project's
total commercial linkage fee obligation.
(c) Contribution to an Affordable Housing Project. Upon approval by the first approval body or City
Council, a developer would be able to contribute an amount equal to fee due under this Chapter to an
entitled affordable housing project in South San Francisco.
(d) Prevailing Wage. Upon approval by the first approval body or City Council a developer would be
able to receive a fee credit up to twenty -five percent of the total commercial linkage fee for voluntarily
electing to construct the project utilizing prevailing wage. If granted, the credit would be provided upon
issuance of Certificate of Occupancy_
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File Number. 18 -764
8.69.090 Affordable Housing Trust Fund.
Enactment Number., ORD 1560 -2018
(a) Affordable Housing Trust Fund. A fund for the deposit of fees established under this exists as Fund
205 (the "Fund "). The Fund shall receive all fees contributed under this Chapter and may also receive
monies from other sources.
(b) Purpose and Limitations. Monies deposited in the Fund shall be used to increase and improve the
supply of housing affordable to moderate, low, very low, and extremely low- income households Monies
may also be used to cover reasonable administrative or related expenses associated with the
administration of this chapter.
(c) Administration. The Fund shall be administered by the Administrator, who may develop Procedures
to implement the Purposes of the Fund consistent with the requirements of this chanter and subject to
any adopted budget of the City.
(d) Expenditures. Fund monies shall be used in accordance with the City's Housing Element or
subsequent plans adopted by the City Council to maintain or increase the quantity, quality and variery of
affordable housing units or assist other governmental entities private organizations or individuals to do
so. Permissible uses include but are not limited to land acquisition, debt service parcel assemblage gap
financing, housing rehabilitation, grants, unit acquisition new construction and other pursuits associated
with providing affordable housing. The Fund may be used for the benefit of both rental and
owner - occupied housing_
8.69.100 Enforcement.
(a) Payment of the commercial linkage fee is the obligation of the developer of a commercial
development project The Ci1y may institute M gppropriate legal actions or proceedings necessaryo
ensure compliance herewith including but not limited to actions to revoke deny, or suspend any permit
or development approval.
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File Number: 18 -764
Enactment Number. ORD 1560 -2018
(b) The City Attorney shall be authorized to enforce the provisions of this chapter and all affordable
housing agreements, regulatory agreements, and all other covenants or restrictions placed on affordable
units, by civil action and an oar proceeding or method permitted by law.
(c) Failure of any official or agency to fulfill the requirements of this chapter shall not excuse a
developer or property owner from the requirements of this chanter. No permit, license, map or other
approval or entitlement for a commercial development project shall be issued, including without
limitation a final inspection or certificate of occupancy, until all applicable requirements of this chapter
have been satisfied.
(d) The remedies provided for in this chapter shall be cumulative and not exclusive and shall not
preclude the City from any other remedy or relief to which it otherwise would be entitled under law or
equi1y.
SECTION 3. Severabilitv
If any provision of this Ordinance or the application thereof to any person or circumstance is held invalid
or unconstitutional, the remainder of this Ordinance, including the application of such part or provision
to other persons or circumstances shall not be affected thereby and shall continue in full force and effect.
To this end, provisions of this Ordinance are severable. The City Council of the City of South San
Francisco hereby declares that it would have passed each section, subsection, subdivision, paragraph,
sentence, clause, or phrase hereof irrespective of the fact that any one or more sections, subsections,
subdivisions, paragraphs, sentences, clauses, or phrases be held unconstitutional, invalid, or
unenforceable.
SECTION 4. Compliance with the California Environmental Ouality Act
The approval of this ordinance is exempt from the California Environmental Quality Act (Public
Resources Code §§ 21000 et seq., "CEQA," and 14 Cal. Code Reg. §§ 15000 et seq., "CEQA
Guidelines "). This action is not a project within the meaning of the California Environmental Quality
Act (CEQA) Guidelines Section 15378 and 15061(b)(3) as it is 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)). 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.
SECTION 5. Effective Date of Fee Imposed
A fee imposed by Section 2 of this Ordinance shall take effect sixty (60) days from and after its adoption
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File Number. 18 -764
by resolution pursuant to Government Code Section 66017.
Enactment Number: ORD 1560 -2018
SECTION 6. Publication and Effective Date of Ordinance
Pursuant to the provisions of Government Code Section 36933, a summary of this Ordinance shall be
prepared by the City Attorney. At least five (5) days prior to the Council meeting at which this Ordinance
is scheduled to be adopted, the City Clerk shall (1) publish the Summary, and (2) post in the City Clerk's
Office a certified copy of this Ordinance. Within fifteen (15) days after the adoption of this Ordinance,
the City Clerk shall (1) publish the summary, and (2) post in the City Clerk's Office a certified copy of
the full text of this Ordinance along with the names of those City Council members voting for and
against this Ordinance or otherwise voting. This Ordinance shall become effective thirty (30) days from
and after its adoption.
Introduced at a regular meeting of the City Council of the City of South San Francisco held the 8th day of August,
2018.
At a meeting of the City Council on 8/22/2018, a motion was made by Richard Garbarino, seconded by
Pradeep Gupta, that this Ordinance be adopted. The motion passed.
Yes: 5 Mayor Normandy, Mayor Pro Tem Matsumoto, Councilmember Garbarino,
Councilmember Gupta, and Councilmember Addiego
Attest by -
.-Krista Martinelli
C
Li a N andy, Mayor
City of South San Francisco Page 12