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Agenda Packet - CC - 2017.04.15
City of Burlingame Meeting Agenda City Council BURLINGAME CITY HALL 501 PRIMROSE ROAD BURLINGAME, CA 94010 Saturday, April 15, 2017 9:00 AM Burlingame Public Library Lane Community Room 480 Primrose Road ANNUAL JOINT MEETING OF THE CITY COUNCIL AND PLANNING COMMISSION 1. CALL TO ORDER - 9:00 A.M. Burlingame Public Library- Lane Community Room 2. ROLL CALL a. City Council b. Planning Commission 3. MEETING OVERVIEW William Meeker, Community Development Director and Kevin Gardiner, Planning Manager 4. PUBLIC COMMENTS, NON -AGENDA Members of the public may speak about any item not on the agenda. Members of the public wishing to suggest an item for a future Council agenda may do so during this public comment period. The Ralph M. Brown Act (the State local agency open meeting law) prohibits the City Council from acting on any matter that is not on the agenda. 5. DISCUSSION TOPICS a. Update - Envision Burlingame (General Planning/Zoning Ordinance Update) - MIG - 30 Minutes Attachments: Staff Report Envision Burlingame Status Update Memorandum b. Local Housing Policy and Programs (Housing Policy Impact/Linkage Fees Affordable Housing) Planning Manager Kevin Gardiner/Community Development Director William Meeker - 1 Hour, 45 Minutes Attachments: Staff Report Attachments City of Burlingame Page 1 Printed on 4/1212017 City Council Meeting Agenda April 15, 2017 C. Residential Design Guidelines — Architectural Character (Follow-Up/Update) - Planning Manager Kevin Gardiner/Community Development Director William Meeker) - 30 Minutes Attachments: Staff Report 6. ADJOURNMENT Notice: Any attendees wishing accommodations for disabilities please contact the City Clerk at (650)558-7203 at least 24 hours before the meeting. A copy of the Agenda Packet is available for public review at the City Clerk's office, City Hall, 501 Primrose Road, from 8:00 a.m. to 5:00 p.m. before the meeting and at the meeting. Visit the City's website at www.burlingame.org. Agendas and minutes are available at this site. Any writings or documents provided to a majority of the City Council regarding any item on this agenda will be made available for public inspection at the Water Office counter at City Hall at 501 Primrose Road during normal business hours. THE NEXT REGULAR MEETING OF THE BURLINGAME CITY COUNCIL WILL BE HELD ON MONDAY, APRIL 17, 2017. To view the City Council Meeting on-line go to: www.burfingame.org and click on the "Council Meetings" tab at the bottom of the home -page and access the video of your choosing from the "City Council Meeting Videos & Documents" page. THE NEXT REGULAR MEETING OF THE BURLINGAME PLANNING COMMISSION WILL BE HELD ON MONDAY, APRIL 24, 2017. To view the Planning Commission Meeting on-line, go to: www.burtingame.org and click on the 'Planning Commission" tab at the bottom of the home -page and access the video of your choosing from the 'Planning Commission Meeting Videos & Documents" page. City oraurtingame Page 2 Printed on 4112/2017 CITY OF BURLINGAME a Community Development Department MEMORANDUM DATE: April 15, 2017 TO: City Council Members and Planning Commission Members FROM: William Meeker, Community Development Director Kevin Gardiner, Planning Manager SUBJECT: Envision Burlingame Project Update and Discussion In March 2015, the City of Burlingame initiated a three-year process focused on a community - led effort to update the City's General Plan and Zoning Ordinance, called "Envision Burlingame." The General Plan and Zoning Ordinance are the City's two documents that regulate all land use, environmental and transportation decisions made by City leaders. The attached memo prepared by the consultant team provides an overview of the project and a status update. The next community workshop for Envision Burlingame is planned to be held in early summer. Staff and the consultant team will invite input from the City Council and Planning Commission on suggestions for engaging the community for this event. Attachment: • Envision Burlingame Project Update memorandum general plan and EnVISIOn zoning ordinance update BURMORME CITY COUNCIL AND PLANNING COMMISSION ANNUAL RETREAT ENVISION BURLINGAME PROJECT UPDATE April 15, 2017 1 9:00am - 12pm Burlingame Library, 480 Primrose Road PROJECT OVERVIEW AND UPDATE In March 2015, the City of Burlingame initiated a three-year process focused on a community -led effort to update the City's General Plan and Zoning Ordinance, called "Envision Burlingame." The General Plan and Zoning Ordinance are the City's two documents that regulate all land use, environmental and transportation decisions made by City leaders. The Envision Burlingame process will result in goals and strategies for desired change in the City by answering the question: "How do we want Burlingame to look, function and feel 25 years from now?" To answer this question, residents, business owners and other community members have been engaged in a comprehensive discussion regarding mobility, urban design, recreation and parks, health, natural resources, and economic development opportunities. Envision Burlingame has three broad objectives: 1. Develop a vision for Burlingame, with particular attention paid to the topics of stability and opportunities for desired change. 2. Update policies and regulations to ensure they address current regional, state and federal requirements. 3. Create an updated and fully digital General Plan and Zoning Ordinance that are easily accessed, understood and applied by the community, property and business owners, and decision makers. general plan and zoning ordinance update envision ®uecroseme Below is a summary of the overall project schedule based on major project phases, each of which includes a variety of community outreach and public engagement activities and events. Phase Current Status 1. Existing Conditions and Opportunities ..................................... Completed Fall 2015 2. Vision and Transformative Strategies Framework ..... Completed in Summer 2016 3. Concept Alternatives.............................................................Completed in Fall 2016 4. Draft General Plan......................................................................................... In Process 5. Environmental Review.................................................................................. In Process 6. General Plan Hearings and Adoption...........................................................Fall 2017 7. Zoning Ordinance Update........................................................... Summer- Fall 2017 8. Specific Plan Technical Updates ................................................. Summer - Fall 2017 What is the General Plan? The General Plan is a policy document that is often described as the constitution or blueprint for development decisions. It establishes the "ground rules" for conserving resources, designing new projects, expanding public services and improving community amenities. The General Plan covers issues ranging from urban design and mobility to public health and safety. Most importantly, it articulates the community's vision and will guide growth, change and development in Burlingame for the next 25 years. The City has not comprehensively updated its General Plan in over 30 years, and the Envision Burlingame process is an opportunity to define what Burlingame will look like, how it will function and how people experience the City in the future. The General Plan can address almost any issue the community defines as important. At a minimum, however, the Plan must establish policy direction relating to the following: • The use and development of properties citywide • Accommodation of all modes of transportation • The provision of parks and other open spaces to meet community needs • The types of housing available in the community • Use and protection of natural resources • The provision of public safety services and protection against natural and human -caused hazards (including noise) in the City The current City of Burlingame General Plan is available online at: www.burlinaame.org/generalolan 2 ;® general plan and Invision zoning ordinance update ®unUmeeme What is the Zoning Ordinance? The Zoning Ordinance is the primary regulatory document for the use of property; it defines specific standards and requirements. It is different from the General Plan in the sense that the General Plan establishes the policy framework that guides decisions, whereas the Zoning Ordinance identifies the regulations that implement those policies. The current City of Burlingame Zoning Ordinance is included as Chapter 25 of the Municipal Code, and is available online at: www.burlingame.ora/zoning What are Specific Plans? A Specific Plan is another tool used to implement the General Plan. Specific Plans provide detailed guidance for defined neighborhoods or districts, and typically include specific policies, regulations, design guidelines, implementation actions and funding sources. Currently the City has three adopted specific plans: • Burlingame Downtown Specific Plan (adopted in 2010) • Bayfront Specific Plan (adopted in 2004 with amendments in 2006 and 2012) • Burlingame/Rollins Road Specific Plan (adopted in 2004 with amendments in 2007) Each of these plans may require minor updates as a result of changes to both the General Plan and Zoning Ordinance. These updates would occur at the end of the Envision Burlingame process. Each of the current specific plans are available online at: www.burlinaame.org/specificplans general plan and Envision zoning ordinance update ■nnllnERME COMMUNITY ENGAGEMENT AND INPUT PROCESS Envision Burlingame includes a robust community outreach and engagement process. The following is a summary of meetings, interviews, workshops, surveys, and other events that have taken place during the first year of the project (March 2015 — March 2016). Stakeholder Interviews and Meetings At the outset of the Envision Burlingame planning process, the consultant team conducted stakeholder interviews with members of the City Council, Planning Commissioners, business owners, residents and others interested in Burlingame's plans for the future. This important step in the General Plan process provided an opportunity to understand the Burlingame community, identify desired project outcomes and gain insight into current issues, assets and opportunities. Community Advisory Committee Meetings The Community Advisory Committee (CAC) was established by the City Council early in the process to advise the project team throughout the development of the updated General Plan. Members include representatives from a variety of organizations and perspectives, including neighborhood groups, business groups, transportation and housing advocacy groups, and environmental organizations, as well as residents representing a range of perspectives, including youth, renters and seniors. The role of this committee is to connect with the various communities and stakeholders of Burlingame for the purpose of advising and making recommendations to the Planning Commission and City Council. The CAC has been very active, having held 16 meetings between July 22, 2015, and April 5, 2017. Information on their meetings including presentations and summaries is available on the project website at: www.envisionburlingame.org/app pages/view/45. Neighborhood Intercept Surveys The City held a series of neighborhood intercept surveys in June 2015 at Burlingame's most popular commercial areas to gather information for the Envision Burlingame project. Members of the project team invited people to participate in an interactive exercise that asked them questions about Burlingame using printed poster boards and "voting" stickers. This approach engaged all age groups—especially families with young children—and allowed for informal and educational discussions. A summary of this input is available on the project website at: http://www.envisionburlingame.ora/app pages/view/15. El �—� general plan and Envision zoning ordinance update RURUnsnme Community Workshop #1 On October 24, 2015, the City hosted the first community workshop on Envision Burlingame. The workshop was held at the Burlingame Recreation Center as an open house so members of the community were free to drop in anytime between 10 A.M. and 2 P.M. The workshop provided an opportunity to learn about the community -driven planning process that will update the City's General Plan and Zoning Ordinance. Over 70 members of the community shared their ideas and vision for Burlingame's future. A summary of this input is available on the project website at: httr)://www.envisionburlinaame.org/app pages/view/15. Community Workshop #2 and Online Survey In May 2016, the City hosted the second community workshop for Envision Burlingame. It was an open house event in which community members could drop in at any time between 10 a.m. and 2 p.m. to review and comment on potential land use and circulation alternatives for key study areas within the city. Participants were given a workbook with specific questions to provide feedback. Burlingame High School students also had an opportunity to showcase their ideas for the Bayfront see below). For community members who were unable to attend the workshop, an online survey was available through the last week in June which corresponded directly to the workshop materials and workbook. In total, over 240 people participated in the workshop and survey. A summary of this input is available on the project website at: http://www.envisionburlinaame.org/oon pages/view/15. Planning Commission Study Session The Planning Commission held a study session on July 13, 2016, to discuss the emerging land use concept, population and employment projections, and community engagement input. Input and direction from the Planning Commission was used to refine these materials. City Council Study Sessions The City Council held study sessions on September 7, 2016, and December 7, 2016, to discuss land use alternatives, population and employment projections, housing, and community engagement input. The outcomes of these study sessions were direction to City staff and the consultant team on the preferred land use alternative, particularly as it pertains to establishing the boundaries of the environmental review. These materials are available on the project website at: http://www.envisionburlingame.org/app pages/view/17. 5 general plan and zoning ordinance update envision euwsin®eme MILESTONE REPORTS Existing Conditions Report In November 2015, the City published a comprehensive Existing Conditions Report that takes a "snapshot" of Burlingame's current characteristics, trends and conditions. The report provides a detailed description of a wide range of topics within the city. It provides decision -makers, local agencies and the community with context for making land use and policy decisions, and is intended to be objective and policy -neutral. The report, which is a key early milestone report, will also be used as the existing settings portion of the eventual Environmental Impact Report prepared for the updated General Plan. The report is available on the project website at: www.envisionburlingame.org/app 12ages/view/17 and includes the following topical chapters: • Chapter l: Introduction • Chapter 2: Land Use and Urban Form • Chapter 3: Economics and Market Demand • Chapter 4: Transportation and Mobility • Chapter 5: Infrastructure • Chapter b: Natural Resources and Hazards • Chapter 7: Open Space, Parks and Recreation NEXT STEPS City staff and the consultant team have been working with the CAC over the past several months to develop and refine draft General Plan Elements. Concurrently, the consultant team is preparing a Draft Environmental Impact Report that will evaluate the potential environmental impacts of the policies and programs included in the draft General Plan Elements. The City is tentatively scheduled to hold a Community Open House in early summer to solicit input on the draft General Plan Elements. This will include a State -required EIR scoping meeting, which may be combined with the Community Open House. In early Fall 2017, the City anticipates releasing the Draft General Plan and Draft EIR for public review. This will initiate the more formal public hearing process, which will include formal hearings before the Planning Commission and City Council. The goal is to hold a City Council adoption hearing towards the end of 2017. ri CITY OF BURLINGAME Community Development Department a t MEMORANDUM DATE: April 15, 2017 TO: City Council Members and Planning Commission Members FROM: William Meeker, Community Development Director Kevin Gardiner, Planning Manager SUBJECT: Housing Policy, Resources and Programs The City Council has identified Housing as one of its five key priorities to focus on in the coming year (the other four priorities are Sustainability, Transportation, Quality of Life, and Infrastructure). Housing has been a topic of discussion in Burlingame and the rest of the Peninsula in recent years as job creation has vastly outpaced housing production. Between 2010 and 2014, 54,600 new jobs were created in San Mateo County, while only 2,100 new housing units were built, a 26:1 ratio. Both ownership and rental housing have become increasingly less affordable to all except those in the highest income categories. Meanwhile, a significant number of new jobs pay lower income wages, including jobs generated by new development. The region's driving economic sectors are increasingly split between high -skill, high wage jobs in industries such as professional and technical services and low -skill, low-wage jobs in hospitality, childcare, retail and others. In establishing Housing as one of its key priorities, the Council indicated interest in updating the City's housing policies (as contained in its General Plan and Specific Plans) and the zoning regulations to promote development of housing that is more affordable to lower income individuals and families, and the local workforce. Methods of doing so could include offering financial assistance to first time homebuyers, and providing resources for rehabilitating exiting rental units in exchange for maintaining rents at affordable levels. The information in this memorandum provides the City Council and Planning Commission the opportunity to discuss housing issues in a very broad sense. The discussion should lead towards providing direction to staff to pursue developing funding proposals, policies and programs, and/or regulations to respond to Burlingame housing issues. COMMMERCIAL LINKAGE FEES AND RESIDENTIAL IMPACT FEES On January 3, 2017 the City Council held a discussion to consider commercial linkage fees and residential impact fees as possible means for funding housing programs (January 3. 2016 staff report attached). "Commercial linkage fees' are imposed on new commercial and office development and are intended to offset the demand for additional housing created by the San Mateo County "Closing the Jobs/Housing Gap Task Force' Joint City Council/Planning Commission Meeting April 15, 2017 Agenda Item 2: Housing Policy, Resources and Programs addition of new jobs and employees needing to find housing. `Residential impact fees' imposed on new housing development and are intended to offset the additional jobs needed to serve increased demand created by residents of newly constructed housing. A Commercial Linkage Fee Nexus Study and a Residential Impact Fee Study have each been prepared for Burlingame. Councilmembers had a number of follow-up questions to the material presented in the fee studies and staff report. Responses to questions provided in this memorandum may serve to initiate and inform the discussion between the City Council and Planning Commission on the wider issue of housing, and may provide data to support any direction to staff. What are the average commercial linkage and residential impact fees across cities on the Peninsula? Tables 1 and 2 present summaries of adopted commercial linkage fees and residential impact fees in San Mateo County. Each table includes a calculation of the average and median fees for each category. TABLE 1: SUMMARY OF ADOPTED COMMERCIAL LINKAGE FEES IN SAN MATEO COUNTY JURISDICTIONS .urisdictio` Belmont { -0elF` _.:Retail BOLA $5.00 - Restaura_n.-: ' Seniices $4.00 $20.00 January 2017 Colma $5.00 $5.00 $5.00 September 2016 East Palo Alto $10.00 September 2016 Foster Cit $12.50 $6.25 $27.50 December 2016 Menlo Park $8.76 $16.15 2015 Redwood Ci $5.00 $5.00 $20.00 2015 San Bruno $12.50 $6.25 $12.50 November 2016 San Carlos $10.00 $5.00 $20.00 October 2016 San Mateo Ci $10.00 $5.00 $25.00 September 2016 San Mateo Count $10.00 $5.00 $25.00 June 2016 AVERAGE $8.75 $5.58 1 $18.12 MEDIAN $10.00 1 $5.00 1 $20.00 Provides reduction for using Area Standard Wages. _ This Space Intentionally Blank 2 Joint City Council/Planning Commission Meeting April 15, 2017 Agenda Item 2: Housing Policy, Resources and Programs TABLE 2: SUMMARY OF HOUSING IMPACT FEES IN SAN MATEO COUNTY JURISDICTIONS -Juris i -' o_ - s' ' Co o �-..: _-..., ' parEmI :. Da Ef." e- Colima $15.00 $15.00 $15.00 September 2016 Daly Ci $18.00 $22.00 1 $25.00 2014 Foster Cit None East Palo Alto $23.00 $23.00 1 $33.71 2014 Menlo Park None Redwood Cit $25.00 $20.00 $20.00 2015 San Bruno $25.00 $25.00 $25.00 November 2016 San Carlos $20.59 $20.59 $21.00 2010 San Mateo City None San Mateo County4$12.50 $12.50 $10.00 June 2016 AVERAGE $19.87 $19.73 $21.39 MEDIAN $20.59 $20.59 $21.00 No Housing Impact Fee adopted, but Inclusionary Housing requires Below Market Rate units in new developments. Some municipalities allow on-site Below Market Rate units to be satisfied with in -lieu fees. 2 Fee increases to $44.00/sf for projects with structured parking. 3 Fees vary based on number of units, up to $42.00/sf for largest projects. Also assesses fee on single family additions. 4$5.00/sf for first 2,500 sf, $12.50 per each square foot over 2,500 sf. Only applies to projects with 4 or fewer units; projects with 5 units or more are sub'ect to the Inclusionary Housing Ordinance. What is the potential amount of fees that couldpossibly be collected in Burlinuame with new development? Estimating potential fee revenue involves identifying potential fees that would be appropriate for Burlingame, and projecting how much growth in residential, commercial, and office development the City may experience in the coming years. The linkage/impact fee nexus studies prepared for Burlingame identified a series of maximum potential fees that account for the gap between the wages of newly created jobs and the market cost of housing. However in practice, no municipality adopts the fully -loaded maximum fee, as other considerations need to be balanced such as financial feasibility (i.e. the fee amount will still allow the developer the typical rate of return on investment for that type of development), comparison to existing City fees, and comparison to neighboring jurisdictions so as to not put a city at a disadvantage relative to neighboring cities. For purposes of initiating discussion, the median fees of San Mateo County jurisdictions identified in Tables 1 and 2 can be used for preliminary projections. Estimating the amount of future development, and hence the potential revenues, involves a combination of land use policy and market analysis. The ongoing General Plan Update ("Envision Burlingame") provides some resources for reference, both in terms of potential development scenarios and market analysis. The General Plan Update Existing Conditions Report included a market analysis, which can be cross-referenced with assumptions or policies towards the amount future development. 3 Joint City Council/Planning Commission Meeting April 15, 2017 Agenda Item 2: Housing Policy, Resources and Programs There is a wide array of potential variables and outcomes, so any projection will be inherently speculative. However for purposes of estimating potential orders of magnitude, staff has prepared two methodologies: • Moderate: A moderate estimate could assume 10 percent growth in population and job growth over the next two decades (to the year 2040 approximately). This scenario approximates historical trends. Table 3 below illustrates a scenario with a 10 percent increase in housing units and hotel rooms, and a conservative estimate of additional commercial and office development based on the market analysis prepared for the General Plan Update. • Agressive: An agressive scenario would incorporate an increase in development over historical trends, in response to regional influences and changes in local land use policy. On December 6, 2016 the City Council reviewed a potential maximum build -out to be studied for the General Plan. The purpose of identifying the maximum build -out was to set an upper ceiling for environmental review; the build -out that will ultimately be adopted may indeed be lower, but cannot be any higher than this identified upper limit. For purposes of estimating fee revenue, this upper limit would also represent the maximum in revenues that could be generated, with the understanding that the final amounts may be lower depending on the outcome of the General Plan Update. In cross- referencing the market analysis, where a range of market potential was identified (for example offices and hotels), the upper range of market potential was incorporated. Table 4 illustrates a top-level estimate based on the maximum growth being studied for the General Plan cross-referenced with market analyses. In both scenarios illustrated, proposed development currently submitted for review or recently approved is subtracted from the totals. This Space Intentionally Blank E, Joint City Council/Planning Commission Meeting April 15, 2017 Agenda Item 2: Housing Policy, Resources and Programs TABLE 3: FEE REVENUE PROJECTION, MODERATE SCENARIO Assum tions.- _ $20,000 Assumes average 1,000 sf/unit at $20.00/sf r SF 7Hotel Residential Fee Per Unit $20,000 Assumes average 1,000 sf/unit at $20.00/sf Retail Per SF $5.00 SF $10.00 Office Per SF $20.00 Hotel Per SF $10.00 Retail SF Office SF Hotel SF1 f 2,951 Residential Units Retail SF Office SF Hotel SF Projected 1,307 -687 82,163 1,319,551 327,716 Approved/ -687 Under Review -82,163 -1,104,251 0 Under Review TOTAL 2,264 TOTAL 620 335,800 0 215,300 327,716 Projected Revenue"" £ ,.t $950,000 Projected $26,144,000 $410,815 $26,391,020 $31,277,155 Approved/ $13,740,000 Under Review -$410,815 -$22,085,020 0 Under Review TOTAL $45,280,000 $539,185 $6,716,000 $7,965,000 TOTAL $12,404,000 0 $4,306,000 $3,277,155 Assumes no additional net increase in retail space beyond space already approved. 2 Assumes 10 percent increase in hotel rooms 370 rooms); assumes one room per 885 sf, per nexus studies. TABLE 4: FEE REVENUE PROJECTION, AGRESSIVE SCENARIO ial Fee Per Unit $20,000 Assumes average 1,000 sf/unit at $20.00/sf r SF 7Hotel $5.00 r SF $20.00 SF $10.00 Projected Development z.''`tgt , - - Residential Units Retail SF Office SF Hotel SF1 Projected 2,951 190,000 1,440,051 502,319 Approved/ -687 -82,163 -1,104,251 0 Under Review TOTAL 2,264 107,837 335,800 502,319 Projected -Revenue-` Projected $59,020,000 $950,000 $28,801,020 $7,965,000 Approved/ -$13,740,000 -$410,815 -$22,085,020 $0 Under Review TOTAL $45,280,000 $539,185 $6,716,000 $7,965,000 Assumes maximum 190,000 sf projected demand for new retail, per General Plan Update Economics and Market Demand. s Assumes maximum projected demand 900 hotel rooms, per General Plan Update Economics and Market Demand. assumes one room per 885 sf, per nexus studies. These projections are presented with the understanding that there is a range of variables and assumptions that would impact outcomes. The intent is to provide a sense of potential 'orders of magnitude" to provide perspective to the larger discussion of housing policies and programs. 5 Joint City Council/Planning Commission Meeting April 15, 2017 Agenda Item 2: Housing Policy, Resources and Programs How could fees be used in Burlingame? Home for All San Mateo County is an initiative of the County's Jobs Housing Gap Task Force, providing information and resources to address housing in San Mateo County. The Home for All website includes a "toolkit" (http://homeforallsmc.or.q/toolkit/) identifying a range of potential programs and initiatives cities can consider to address housing issues, including: • Development Incentives • Housing Trust Funds • Employer -Employee Housing • Public Land for Affordable Housing • Shared Housing • Housing Preservation • Residential Tenant Protections HEART of San Mateo County (The Housing Endowment and Regional Trust) is a public/private partnership among the cities, the county, and the business, nonprofit, education, and labor communities to create more affordable housing opportunities in San Mateo CountyH( EART FAQ attached). It is a housing trust fund that is leveraged for a range of purposes including pre - development loans for affordable housing, first-time homebuyer programs, land acquisition, and acquiring buildings. In the near term it can also manage a municipality's funds while it builds up a balance, which it keeps earmarked but in the meantime can leverage towards other initiatives. There are also organizations with services that address the needs of existing residents, such as Rebuilding Together Peninsula (RTP) which provides renovation and repair services for vulnerable homeowners such as seniors, veterans, persons with disabilities, and families with children who wish to remain in the community but cannot afford needed repairs, and Samaritan House which provides access to shelter, healthcare, and a broad range of supportive services. Municipalities can issue a Notice of Funding Availability (NOFA) to receive proposals for housing services, then choose those that address local needs. The Housing Leadership Council of San Mateo County has prepared informational documents providing an overview of impact and linkage fees, and outlines policy considerations ("Commercial Linkage Fees: A Guide for San Mateo County' and "Housing Impact Fees: A Guide for San Mateo County' attached). Among policy considerations are setting appropriate fee levels, establishing a fund, and providing alternatives to fee payments. Can fees be used for retention of existing housing stock? Yes, fees can be used for retention of existing housing stock. For example, Mid -Peninsula Housing has piloted a new Multi -Family Preservation Program to acquire and preserve existing "naturally affordable" rental housing (summary attached). M Joint City Council/Planning Commission Meeting April 15, 2017 Agenda Item 2: Housing Policy, Resources and Programs Can fees be used for rent subsidies? Yes, funds held in a housing trust fund may be used to provide rental assistance to lower- income households. Voucher programs can be established to provide assistance for either existing apartments, or to subsidize rents of newly constructed apartments. Can fees be offset by on-site below market rate units? Yes, some municipalities provide the option for on-site construction of affordable rental units as an alternative to paying a fee. Providing alternatives to fee payment can be beneficial for cities that own little to no vacant or underdeveloped property and are unable to collect a significant amount in fees. Yes. Some municipalities exempt smaller projects, such as residential projects with fewer than 5 units, or commercial projects under thresholds of either 5,000 or 10,000 square feet. Some provide discounts for projects paying prevailing construction wages. Sliding scales may be based on number of units or type of development. San Mateo County has a sliding scale for single family developments with fees varying for projects with 1 unit, 2-4 units, or 5 units or more. Cupertino has a slightly higher fee for projects with a density of 35 units/acre or larger, whereas Sunnyvale has a reduced fee for larger residential projects. San Carlos has a full sliding scale for residential projects with an adjustment for each additional unit from one unit up to 280 units. What has been the experience of municipalities that have had impact fees in effect for several years? San Carlos was one of the first San Mateo County municipalities to adopt residential impact fees, having adopted its Affordable Housing Impact Fee in 2010. Since adoption it has generated approximately $3 million in funds to be applied to a variety of programs. Each year it issues a Notice of Funding Availability (NOFA), and most recently has applied funds to seven organizations. It also has used funds to finance the construction of new affordable units. In the presentation to the Joint City Council/Planning Commission staff will provide further details on the city's experience with residential impact fees and commercial linkage fees. Palo Alto has had a commercial linkage fee in place since 1984. Through the program it has constructed 377 units over a 24 -year period (averaging 15 units per year). This Space Intentionally Blank 7 Joint City Council/Planning Commission Meeting April 15, 2017 Agenda Item 2: Housing Policy, Resources and Programs Are there possibilities for other housing types, such as micro -units? There has been interest in evaluating the feasibility of unconventional types of housing, such as "micro -units." Micro -units are small multifamily units oriented towards single -person households, sized as small as 220 square feet comprised of 150 square feet of living space, plus a bathroom and kitchen. Some variations may include common amenities shared among residents, such as kitchens, dining rooms, and lounges. Employers have expressed interest in mico-units as a workforce housing choice offering employees a practical option to reside close to their jobs. Some variations of micro -units may be accommodated under existing zoning under either Multifamily Residential or Residential Hotel classifications. However the General Plan and Zoning Ordinance Update offer the possibility to tailor standards to more specifically accommodate micro -units or other workforce housing variations. Included in the attachments to this report is a letter from a Burlingame employer suggesting consideration of zoning amendments that could further accommodate workforce housing (Putnam Automotive letter, attached). Attachments: • January 3, 2017 City Council staff report • HEART Frequently Asked Questions (FAQ) • Housing Leadership Council — Commercial Linkage Fees: A Guide for San Mateo County • Housing Leadership Council — Housing Impact Fees: A Guide for San Mateo County • MidPen Housing — Multi -Family Preservation Program summary • Putnam Automotive letter, dated April 6, 2017 H aSTAFF REPORT To: Honorable Mayor and City Council Date: January 3, 2017 AGENDA ITEM NO: MEETING DATE: January 3, 2017 From: William Meeker, Community Development Director— (650) 558-7255 Subject: Discussion of Commercial Linkage Fee and Residential Impact Fee Nexus Studies Staff recommends that the City Council provide direction on whether the City should pursue establishing a commercial housing impact fee, and/or a residential housing impact fee. BACKGROUND Affordable housing impact fees are used to support and build new homes for lower income residents. The fees can be charged to developers of new commercial or residential projects, and used for land purchase, construction costs, or site rehabilitation related to providing workforce housing. Several Peninsula cities such as Menlo Park, Redwood City, San Carlos, San Mateo, Palo Alto and Mountain View have already implemented these fees. Jurisdictions may tailor the fees so they meet local needs. The fees can be adjusted for a wide variety of reasons, so long as they are not arbitrary or capricious, and so long as the fees for all projects remain below the legal maximum. As part of the San Mateo County "21 Elements' multi -jurisdictional effort, a Commercial Linkage Fee Nexus Study and Residential Impact Fee Nexus Study have been prepared for the City of Burlingame. These studies describe and quantify how the development of homes, offices, and commercial space creates a need for housing, particularly for very low-, low- and moderate - income residents. The maximum impact fees that can be legally charged were calculated by estimating the number of new worker households associated with new development. A final analysis was then completed that considered factors like local conditions and the fees of neighboring jurisdictions to determine a potential range of impact fees. These studies enable the City Council to consider the adoption of commercial linkage and/or residential impact fees that would be used to provide affordable housing. DISCUSSION Housing Need: The need for affordable housing in Burlingame, the Peninsula, and the Bay Area far exceeds the supply. Both ownership and rental housing have become increasingly less affordable over the past several decades. Typically, new market rate housing is only affordable to people making higher income wages. 1 Commercial Linkage Fee and Residential Housing Impact Fee Nexus Studies January 3, 2017 However, a significant number of new jobs pay lower income wages, including jobs generated by new development. The region's driving economic sectors are increasingly split between high - skill, high -wage jobs in industries such as professional and technical services and low -skill, low- wage jobs in hospitality, childcare, retail, and others. In San Mateo County as a whole, as of June 2015 (according to the U.S. Department of Labor, Bureau of Labor Statistics), there were 351,959 people employed in jobs located in San Mateo County; of those, 61%, or 214,479 people, were employed in jobs earning less than $70,000 per year. Additional information on the need for affordable housing is available on the website (http://bos.smcgov.org/task-force) created by the County -wide "Closing the Jobs/Housing Gap Task Force" co-chaired by Supervisors Horsley and Slocum, which met monthly from September 2015 to June 2016 to analyze ways to address the growing gap between the number of jobs and the number of available, affordable housing units. As noted by the task force, between 2010 and 2014, 54,600 new jobs were created in San Mateo County, while only 2,100 new housing units were built, a 26:1 ratio. The findings of the task force are presented in a "Home for All" website with on-line resources and an "Action Plan" at http://homeforallsmc.org. Legal and Policy Context: Impact fees are charges imposed by jurisdictions that can be used to support and build new development. Since the 1970s, California cities have used impact fees to reduce costs paid by the public for items like roads, parks, schools, water, and sewer. The money generated by housing impact fees is placed into a fund to help pay for new affordable housing. Fees can be set per square foot, per unit, or by some other measure, and can only be applied to new development projects. Before being adopted, jurisdictions must show that there is a connection, or nexus, between the impacts of development and the fees charged. A nexus study assesses the connection between new development and the need for new affordable housing. This is accomplished by calculating the number, type, and salaries of jobs that will result from a new development. The study then establishes the maximum impact fee that can legally be charged to a developer for each type of development being studied. Residential developments include single-family homes, townhomes, condominiums, and apartments. Commercial developments include the categories of office (office, medical office, and R&D), retail (restaurant, retail, and services) and hotel (hotel, resort, and other lodging). The logic behind impact fee nexus studies is that residents of new housing spend money on goods and services like landscaping, childcare, and restaurants. New commercial developments also require new workers. Many of the workers providing these services and working at these new businesses earn lower wages, and cannot afford to buy or rent a home at market -rate. Nexus studies calculate the maximum fees that would be necessary to bridge the difference between what these new worker households can afford to pay, and the cost of developing housing units to accommodate them. While a nexus study will inform a jurisdiction about the maximum amount it can legally charge as an impact fee, the maximum fee level may not be appropriate given local housing market conditions, existing fee levels in the region, or the jurisdiction's current fee structure. A feasibility study considers these conditions and recommends a more appropriate range of fees that do not unduly burden or lessen the profitability of new development. 2 Commercial Linkage Fee and Residential Housing Impact Fee Nexus Studies January 3, 2017 Commercial Linkage Fees and Housing Impact Fees in Other Jurisdictions: A number of jurisdictions throughout the Bay Area and California have shifted toward the use of impact fees to increase affordable housing opportunities. The nexus studies include some information on impact fees in neighboring jurisdictions. Since the publication of the nexus studies in 2015, additional cities have adopted or are considering housing impact and/or commercial linkage fees. The tables below list the commercial linkage and housing impact fees for jurisdictions on the Peninsula. TABLE 1: SUMMARY OF COMMERCIAL LINKAGE FEES IN VARIOUS PENINSULA JURISDICTIONS WAJOWU r Daly City ote None , - _. None3 East Palo Alto East Palo Alto $23.00 - $44.00 $23.00 - $44.00 1 $33.71 -$44.72 $10.00 June 2016 Foster Ci $12.50 $6.25 $27.50 November 2016 Menlo Park None3 $8.45 $15.57 2015 Mountain View $1.25 - $2.50 $1.25 - $2.50 $12.25 - $25.00 2014 Palo Alto $19.31 $19.31 $19.31 2014 Redwood Ci z $5.00 $5.00 $20.00 2015 San CarloS2 $10.00 $5.00 $20.00 October 2016 San Mateo Ci 2 $10.00 $7.50 $25.00 September 2016 San Mateo Coun 2 $10.00 $5.00 $25.00 June 2016 Sunnyvale' $7.50 $7.50 $15.00 1 2015 ' Fee is $9.74 for "pipeline projects" and $7.50 for the first 25,000 SF of industrial, office and R&D developments. 2 Provides reductions for using Area Standard Wages. TABLE 2: SUMMARY OF HOUSING IMPACT FEES IN VARIOUS PENINSULA JURISDICTIONS -Jurisd'ction= a T__ownhomes Per SF -' Daly Cit $18.00 Condominiums- Apartme is ; Per SF Per: $22.00 $25.00 _> Date Fe opt 1 2014 Foster City None3 East Palo Alto $23.00 - $44.00 $23.00 - $44.00 1 $33.71 -$44.72 2014 Menlo Park None3 Mountain View 1 $17.00 2014 Palo Alto None3 Redwood Ci $25.00 $20.00 1$20.00 2015 San Carlos' $20.59 - $42.20 1 $21.00 - $42.00 2010 San Mateo City None3 San Mateo County $5.00 - $12.50 $5.00 - $12.50$10.00 June 2016 Sunn valet $17.00 2015 ' Also assesses fee on single family additions. 2 Rental only - for developments with 8 or more units. 3 No Housing Impact Fee adopted, but Inclusionary Housing requires Below Market Rate units in new developments. 3 Commercial Linkage Fee and Residential Housing Impact Fee Nexus Studies January 3, 2017 Prevailing Wage Discounts: Some cities have adopted fees with provisions for fee reductions to developers who utilize prevailing wages or area standard wages. Redwood City, City of San Mateo, San Carlos, and San Mateo County have adopted a 25% reduction for developers using a standard area wage. Use of the Impact Fees: Local funding can be used in a variety of ways to support affordable housing. Funds from housing impact fees would be required to be spent on affordable workforce housing (not housing for generally non -working populations, such as seniors). Examples of the types of programs that these funds could be used for include: • Loans or grants to subsidize construction cost of new units • Homebuyer loan programs • Extension of expiring affordability covenants • Acquisition of affordability covenants for existing housing units • Rental subsidies • Housing rehabilitation programs ANALYSIS Summary of Commercial Linkage Fee Report: The Commercial Linkage Fee Nexus Study measures the increased demand for affordable housing resulting from new commercial development. This occurs in several steps: • For each type of non-residential development, analyze the number and income levels of employees that will work there. • Calculate the number of worker households created at various income levels. • Calculate the "affordability gap' between what worker households can afford compared to what market rate housing costs. • Calculate what the "affordability gap' represents on a per square foot basis — this represents the "maximum" fee that would offset 100% of the difference between the price of the affordable housing needed and market rate housing. The Study then analyzes the "maximum" fees and lower fee scenarios relative to: • Financial feasibility — what level of fee will still allow the developer the typical rate of return on investment for that type of development. • Comparison to existing City fees. • Comparison to neighboring jurisdictions —to not put the City at a disadvantage relative to neighboring cities. n Commercial Linkage Fee and Residential Housing Impact Fee Nexus Studies January 3, 2017 TABLE 3: NON-RESIDENTIAL "MAXIMUM" AND "CONSULTANT RECOMMENDED" FEES Summary of Residential Nexus Study: The Residential Impact Fee Nexus Study measures the increased demand for affordable housing resulting from new market rate housing. This occurs in several steps: • For each type of residential development, analyze the likely spending using the income levels needed to purchase or rent a new unit. • Estimate the number, type and wage level of jobs created by the spending. • Calculate the number of worker households created at various income levels. • Calculate the "affordability gap' between what worker households can afford compared to what market rate housing costs. • Calculate what the "affordability gap" represents on a per unit and per square foot basis — this represents the "maximum" fee that would offset 100% of the difference between the price of the affordable housing needed and market rate housing. The Study then analyzes the "maximum" fees and lower fee scenarios relative to: • Financial feasibility — what level of fee will still allow the developer the typical rate of return on investment for that type of housing. • Comparison to existing City fees. • Comparison to neighboring jurisdictions — to not put the City at a disadvantage relative to neighboring cities. The results are a "maximum fee" representing 100% of the amount needed to fill the affordability gap between what the new households can afford and market prices, and a "recommended fee' representing the consultant's recommendation for a fee that would be financially feasible, i.e., provide sufficient return on investment to developers, and not put Burlingame at a significant disadvantage relative to other cities in the area. 5 Commercial Linkage Fee and Residential Housing Impact Fee Nexus Studies January 3, 2017 TABLE 4: RESIDENTIAL "MAXIMUM" AND "CONSULTANT RECOMMENDED" FEES FISCAL IMPACT None. Exhibits: • Commercial Linkage Fee Nexus Study — November 2015 • Residential Impact Fee Nexus Study — November 2015 I FAQ I HEART of SMC Page 1 of 3 f4j HEART lei ossw rureo coam IWO Home About Programs Results Events & Video Resources Donate Now Slog Contact Subscribe to RSS FIND HOUSING Find Housing Foreclosure Assistance San Mateo County Dept. of Housing FAO What is the Housing Endowment And Regional Trust? HEART is a housing trust fund, a vehicle to finance the construction and rehabilitation of homes affordable to our middle— and low—income workforce, as well as our seniors and other fumed -income residents. Click Here to Learn More Are there Housing Trust Funds in other jurisdictions? Yes, there are over 450 housing trust funds across the nation. Housing [rusts are commonly formed at the state, county, and city levels—especially in response to the federal government's decreasing support for housing in proportion to the need. The State of California has a state housing trust, and housing trusts exist in Alameda, Napa, Sacramento, and Santa Clara Counties. More than a dozen housing trusts exist at the city level. HEART is one of a very few housing trusts structured as a Joint Powers Authority QPA), a method by which local governments can cooperate. Nationwide, it is one of just a handful of collaborative ventures between cities and a county. How do cities benefit from being part of a regional approach to housing? SEARCH A regional approach will ensure those dedicated to resolving housing needs are able to reduce - - - - - - redundancies, pursue new funds, and share resources. San Mateo County has a history of success in Search... Q developing regional solutions to a variety of issues, from the Measure A sales tax to fund transportation projects to emergency response, from water treatment to mosquito abatement. Now, HEART facilitates housing production throughout the county. CONNECT WITH US! "Like an FHA loan, but mare flexible /or increases property values. An adequate supply is necessary for a balanced economy. Too few homes the condo wx wanted...... are being created in San Mateo County to meet the demand. This results in long commutes, -Jennifer & Andrew http://heartofsmc.org/resources/faq/ 4/12/2017 How broad is the support for the Joint Powers Authority among other cities? Connect with HEART and receive important housing related resources. Currently all cities and the County of San Mateo have joined the joint Powers Authority. news, and upcoming events! Benefits Why create more housing? Sign up for our Email Newsletter Despite recent changes in the housing market, there is still a housing crisis in San Mateo County, especially for low- to moderate -income employees of local businesses as well as fumed -income 0 oo seniors and disabled persons. The number of available housing units has fallen far below what is needed for our workforce, retirees and recent graduates. Over the next 10 years, only 21,000 units of housing are expected to be built, while the County estimates that 42,000 units will be needed. OUR RESULTS... - - -. - Housing is one of the essential elements of any local economy. Its construction creates jobs and "Like an FHA loan, but mare flexible /or increases property values. An adequate supply is necessary for a balanced economy. Too few homes the condo wx wanted...... are being created in San Mateo County to meet the demand. This results in long commutes, -Jennifer & Andrew http://heartofsmc.org/resources/faq/ 4/12/2017 FAQ I HEART of SMC Page 2 of 3 "With Me money saved through congested freeways, and difficulty attracting and retaining high-quality employees. Not only HEART, I have enough to ftp the house..." businesses are affected. Key personnel such as police officers, firefighters, nurses, teachers, and childcare workers must live far from their workplaces. Young people are too often forced to live with -Krystal their parents or move far from home UPCOMING EVENTS What does a housing trust fund do for San Mateo County? HEART's structure encourages a collaborative approach among the cities, the County, nonprofits, April Board of Directors the private sector, and the community at large. HEART coordinates financial resources of public and Meeting private sector entities that want to play a role in meeting the critical, regional need for affordable Apnl 26 @ 3:00 pm- 4:30 pm housing. Housing trusts have the ability to pursue multiple strategies to access new funds for housing, leverage funds over the long term, and provide a secure funding source for ongoing HEART Annual affordable housing development. Fundraising Event May II@5:30 Organization pm -7:30 pm How was HEART formed? May Board of Directors Meeting In 2002, a broad-based group of individuals from throughout the county explored the formation of a May 24 @ 3:00 pm -4:30 pm trust fund as a source of capital for additional workforce housing in the county. The group recommended the formation of a housing trust fund to raise money from public and private sources. View All Events HEART was formed as a joint Powers Authority in 2003. Who runs HEART and how is it organized? All cities and the County of San Mateo have established HEART as a collaborative, public/private venture. It is structured as a joint powers authority and is governed by a public/private board of directors with 21 members. Eleven are elected officials, including nine city council members and two County Supervisors. Private sector directors hold ten seats at large on the board. All directors have three-year terms. Is HEART a new bureaucracy or layer of government? No. HEART's purpose is to access revenue streams and make new funds available for accessible, affordable housing development. To keep administrative costs to a minimum, daily management of the joint powers authority has been contracted to the Housing Leadership Council of San Mateo County, a nonprofit community-based organization, and the County of San Mateo Department of Housing. These two entities support and implement board recommendations. Why are there 10 private -sector Board members on the joint powers authority board? A diverse, professional and collaborative decision-making body enhances and strengthens existing community support for affordable housing development. At -large representation from the private sector helps the board to draw technical assistance, donations, and resources from a wide field. The public/private nature of HEART is also attractive to funders. Who determines who sits on the joint powers authority board? The City Selection Committee of the Council of Cities determines the city membership of the joint Powers Authority Board. Representatives from the member cities of the joint Powers Authority are considered for three-year terms. At -large members are elected by the full Board. Finances What financial commitment do joint powers authority board member cities make? http://heartofsmc.org/resources/faq/ 4/12/2017 FAQ I HEART of SMC Page 3 of 3 Member cities are asked to share in the annual operational costs only. These costs are kept to a minimum through the use of contract staffing and administration and are approved by the board annually. The amount required from of each member is proportional to the population of the jurisdiction. How much has HEART raised so far? HEART has received gifts and pledges totaling over $12 million dollars. The County of San Mateo committed $3 million in seed money to kick off the endowment. That initial investment attracted a matching grant of $2 million from the State of California through Proposition 46 housing bond funds set aside for new housing trust funds. Other major donors and investors include Wells Fargo Bank, Genentech, California Housing Finance Agency (CaIHFA), the Examiner newspaper, and the San Mateo County Association of Realtors, among many others. See our Donors page for a full list. How will the capital for projects be raised? The specific mechanism for raising funds will reflect the public/private nature of HEART. HEART's initial capitalization raised $5 million from the county and the state. HEART has raisied $3 million from the private sector through our campaign, Opening Doors in Our Community. HEART is also planning for long-term sustainability, which will include efforts to secure a continued source of income for HEART annually from public and private sources. Finally, Leveraging of Public -Private Funds will ensure maximum use of HEART dollars, possibly through use of incentives to leverage available funds. Jurisdiction Will HEART dictate housing policy and planning to cities? No. HEART is designed to support and finance the projects and plans that the cities choose for their jurisdictions. HEART has no authority over the activities within the jurisdictions of any member agency. HEART is not a policy or planning entity; rather, its mission is to provide funds for housing development and construction. © 2017 IHART of SMC. All Rights Reserved. http://heartofsme.org/resources/faq/ This Site Designed & Optimized by C.Miro Consulting 4/12/2017 Commercial Linkage Fees: A Guide for San Mateo County Why Commercial Linkage Fees? • The current housing market is not producing enough housing options for all members of our communities. • Commercial Linkage Fees help cities address the problem of a ' jobs -housing fit," where the range of housing affordability choices need to fit the range of worker incomes in the community. • The largest number of future job openings in the Peninsula metro areas are expected in low and moderate wage (less than $20/hour) occupations2 2SAMCEDA (2014) 313ay Area Council Economic Institute (2012) 0 407 Occupation Median Salary 2014 Telecommunication Equipment Installers Meeting, Convention, and Event Planners Hotel, Motel, and Cl Resort Desk erks Restaurant Cooks Food Prep Workers and Servers $64,091 $61,712 $37,182 HOUSING LEADERSHIP COUNCIL S TEO C.Htt Projected job growth 2012-2022 34.1% 31.5% 30.8% $27,358 26.07. $22,340 24.2% Source: CA Employment Development Department San Mateo County: Jobs vs. Homes Added 14,400 720 14,000 319 2011 2012 2013 o Jobs Added ® Homes Added Source: HLC analysis of 2010-2014 CA Department of Finance and CA Employment Development Department data 1,055 2014 Housing Leadership Council 1 rev. 1.0 Of San Mateo Countv www.hlcsmc.org What is a Commercial Linkage Fee? A Commercial (Jobs) Linkage fee is a per -square foot fee assessed to new, non-residential construction, such as hotel, office space, and retail and restaurants, to address the affordable housing demand from new workers. Need for new affordable homes These fees are based on the idea that there will be a net gain' in employment when new commercial space is built. Approximately 60% of new jobs in San Mateo County over the next 10 years are expected to pay less than $50,000/year, such as custodial staff, shuttle bus drivers, coffee baristas, hotel service workers, and restaurant staff. These new workers will then create increased demand for new affordable homes. Key Steps to Adopting a Commercial Linkage Fee How will fees Annual fee Alternatives to be used? adjustment? paying fee? Local Cities with a Commercial Linkage Fee city Fee Amount Menlo.. Park' office%R&Dt $15.19/sq. ft. (2015) Commercial/industrial: $8.24/sq. ft. Sunnyvale (2015) High-intensity industrial: $15.00/sq. ft. Palo Alto* Large commercial and industrial: (1984) $19.31 /sq. ft. Mountain Office/High Tech/Industrial: Up to View* $25.00/sq. ft. of new gross floor area (2015) Commercial/Retail/Entertainment/Hotel: Up to $2.50/sq. ft. of new gross floor area *Adjusted annually by the percentage change in the Consumer Price Index (CPI) for San Francisco -Oakland area For a complete list of Bay Area cities that have adopted impact fees: www.nonprofithousing.org Sample ordinance language: "A commercial development project may be required to provide below market rate housing on-site [... ] or off-site. If it is not feasible to provide below market rate housing units, the developer shall pay an in lieu fee to issuance of a building permit [...I." City of Menlo Park [Ch. 16.96.030(3)] Housing Leadership Council 2 rev. 1.0 Of San Mateo Countv www.hlcsmc.org Policy Considerations A commercial nexus study will typically present maximum and recommended fee levels for various prototypes (hotel, retail/restaurant, and office/R&D/medical office) that address both the affordability gap as well as the feasibility of a development with impact fees. Fees should also be adjusted on a regular basis to compensate for inflation and changes in the housing market. When determining what fee levels to adopt, cities should take into consideration several factors: Will it help mitigate the increased demand of new housing generated by new commercial development? Will it help promote a city's housing goals, such as increasing homeownership opportunities or increasing multi- family rental stock? Will it appropriately address current and future housing needs and job growth? • is it appropriate given the size and scope of a proposed development? - - - Some cities have provided the option for a developer to propose an alternative to paying a commercial linkage fee, such as onsite or offsite construction of affordable rental units. Providing alternatives to fee payment may be beneficial for cities that own little to no vacant or underdeveloped property and are unable to collect a significant amount in fees. It is important to consider how a commercial linkage fee will interact with its existing fee structure on non-residential development. An effective commercial linkage will strike a balance between fully mitigating the affordable housing impacts of new development and encouraging new development. When development begins to happen after the adoption of a commercial linkage fee, cities will need to create an "affordable housing fund" to collect the fees. How these fees are dispersed can then be determined at the discretion of local decision makers, such as the City Council or the City Manager, or through a public process. Fees can be used to fund a variety of spending programs, such as paying for new construction costs, preservation programs, providing rental assistance to low-income households, creating a first-time homebuyer loan program, or loans for home improvements. A commercial nexus study will typically calculate the number of new workers of a commercial prototype by using the average density (square feet per worker). However, when determining an appropriate fee, cities should take into consideration other factors such as: Office workers in the technology and mobile sectors tend to occupy less square feet per worker, allowing for a higher density of workers The nexus study does not account for the portion of workers who work but do not live in a community. These workers will also sionificontly contribute to the demond for local services. As cities begin to study and consider the adoption of a commercial linkage fee, it is critical to encourage participation and gather input from all members of the community, such as residents, community groups, housing developers, and other stakeholders. Housing Leadership Council 3 rev. 1.0 Of San Mateo Countv www.hlcsmc.org • Non -Profit Housing Association of Northern California, Bay Area Impact Fees, link: non oro fithousina.ora /resources/bay-area-impact-fees/ • San Mateo County 21 Elements, Grand Nexus Study, Link: http://www.2lelements.com/Nexus-Study/View- cateaorv.html • City of Menlo Park, Below Market Rate Housing Program - Zoning Code Chapter 16.96, Link: httr),//www.codec)ublishinci.com/CA/menlopork/?MenloPork1 6 / MenloPark 1696.html • City of Sunnyvale, Housing Impact Fees for non- residential development — Zoning Code Section 19.75.030, Link: htto://acode.us/codes/sunnyvale/ • City of Mountain View, Section 36.40, Link: httos://www.municode.com/library/ca/mountain view/codes/c ode of ordinances2node1d=PTIITHC0 CH3670 ARTXIVAFHOPR D • City of Palo Alto, Approval of Projects with Impacts on Housing—Section 16.47, Link: htip://www.amleaal.com/nxt/aateway.dll/California/oaloolto c a/titlel 6buildinareaulafions*/chapterl 647a pprovalofproiectswithi moacts?f=templates$fn=default.htm$3.0$vid=amleaol:paloalto c a$onc=JD Chopterl6.47 Founded In 2001, HOUSING LEADERSHIP COUNCIL OF SAN MATEO COUNTY works with communities and their leaders to produce and preserve quality affordable homes. We work to provide fundamental solutions to some of our community's most pressing issues. Our membership includes nonprofits, employers, business associations, labor unions, real estate professionals, public agencies, environmentalists, and concerned community members. Housing Leadership Council 4 rev. 1.0 Of San Mateo Countv www.hlcsmc.org Housing Leadership Council of San Mateo County 139 Mitchell Ave, Suite 108 South San Francisco, CA 94080 (650) 872-4444 Phone (650) 872-4411 Fax HOU 5 I N G LEADERSHIP info@hlcsmc.org C 0 U N C I L www.hicsmc.org SAN MATEO COUNTY Housing Leadership Council 4 rev. 1.0 Of San Mateo Countv www.hlcsmc.org Housing Impact Fees: A Guide for San Mateo County HOUSING LEADERSHIP COUNCIL saa.noceem_ • The current housing market is not producing enough housing options for all members of our communities. • Recent court cases have limited the ability of cities to apply inclusionary requirements on new market rate rental housing development" • The loss of Redevelopment Agencies has caused local cities to find new ways to fund the construction of affordable housing. • Housing Impact Fees help cities address the problem of a "jobs -housing fit," where the range of housing affordability choices need to fit the range of worker incomes of the community. 'San Mateo County Department of Housing, June 2015 2Polmer 6th St. Properties v. City of Los Angeles (2009) 'The current shortfall in affordable homes is due in port to the 8% decline in California renters' median incomes and simultaneous 21 % increase in rents since 2000," California Housing Partnership Corporation, Update on California's Affordable Housing Crisis, Apri12015. Housing Leadership Council Of San Mateo Countv 30% - -- - - - $2,586.60 Innease In annual 25% - median rent 20% ---'0— % Change 15%....___.__.__.____� ---_ ___._ _.. _. __.. --__ _. - - ____ .. in Rent J 5% _.-....- 0% .4 1 -1---i 1 --i-- _.--i--- I 1 --r---r %x 2000 2001 A -1L009 20 OLZZ,45 2007 2W8 2010 2011 2012 2017 Change 5% CRenter Income •$3,688.59 D..a.In annual -15% - -- median income Scer CHPC anarysis of2000-2013 ofCensus and ACS data. Median inrome and rent from 2001-2004 are an eftewded Veld rev. 1.0 www.hlcsmc.orp What is a Housing Impact Fee? A Housing Impact Fee is a per -square foot or per-unit fee assessed to new market rate housing construction to offset its impact on the community. These fees are based on the idea that every person that moves into a new market rate home will generate a need for services that requires employees who will make less than median income, such as hairdressers, coffee baristas, landscapers, healthcare workers, restaurant staff, and school teachers. These new workers will then create increased demand for new affordable homes. Key Steps to Adopting a Housing Impact Fee How will fees Annual fee Alternatives to be used? adjustment? paying fee? Housing Leadership Council Of San Mateo Countv 2 New market rate homes New jobs: some pay low wages Need for new affordable homes Local Cities with a Housing Impact Fee city Fee Amount 'F Single Family Home: $14.00/sq. ft. r Daly City Townhome: $18.00/sq. ft. (2014) Condo: $22.00/sq. ft. Rental: $25.00/sq. ft. San Carlos Approximately $25.00/sq. ft. Based (2010) on #units and average sq. ft. East Palo Alto Single Family infill: $23.95/sq. ft. (2014) OwnerTownhome: $23.00/sq. ft. Rental: $22.70/sq. ft. Sunnyvale $17.00/sq, ft. (2015) San Jose (2014) $17,00/sq. ft. Mountain $17,00/sq. ft. View (2015) Berkeley $28,000/rental unit (013) (2 For a complete list of Bay Area cities that have adopted impact fee: www.nonorofiithousing.org Sample ordinance language: "All rental projects shall pay an affordable housing impact fee, upon issuance of a building permit for each dwelling unit in the rental project, unless on alternative is proposed by the developer and approved by the City Manager." Daly City Municipal Code [Ch. 17.47, Title 171 rev. 1.0 www.hlcsmc.orq Policy Consider abons A residential nexus study will typically present maximum and recommended fee levels for various prototypes that address both the affordability gap as well as the feasibility of a development with impact fees. Fees should also be adjusted on a regular basis to compensate for inflation and changes in the housing market. When determining what fee levels to adopt, cities should take into consideration several factors: Will it help mitigate the increased demand of new housing generated by new development? Will it help promote a city's housing goals, such as increasing homeownership opportunities or increasing multi- family rental stock? Will it appropriately address current and future housing needs? Is it appropriate given the size and scope of.a proposed development? Some cities have provided the option for a developer to propose an alternative to paying a housing impact fee, such as onsite construction of affordable rental units. Providing alternatives to fee payment may be beneficial for cities that own little to no vacant or underdeveloped property and are unable to collect a significant amount in fees. It is important to consider how a housing impact fee will interact with its existing fee structure on residential development. An effective housing impact fee will strike a balance between fully mitigating the affordable housing impacts of new development and encouraging new development. When development begins to happen after the adoption of a housing impact fee, cities will need to create an "affordable housing fund" to collect the fees. How these fees are dispersed can then be determined at the discretion of local decision makers, such as the City Council or the City Manager, or through a public process. Fees can be used to fund a variety of spending programs, such as paying for new construction costs, preservation programs, providing rental assistance to low-income households, creating a first-time homebuyer loan program, or loans for home improvements. Many cities continue to apply an inclusionary requirement on ownership residential development. Others have repealed their current Inclusionary Housing ordinances altogether, given that they are no longer consistent with the Palmer (2009) decision, and have replaced it with a new ordinance to adopt a new housing impact fee and affordable housing requirements. The results from a nexus study can help cities update their inclusionary policies by calculating an inclusionary rate based on the nexus, and providing developers the option of paying an impact fee or building onsite or offsite for -sale units. As cities begin to study and consider the adoption of a housing impact fee, it is critical to encourage participation and gather input from all members of the community, such as residents, community groups, housing developers, and other stakeholders. Housing Leadership Council Of San Mateo Countv rev. 1.0 www.hlcsmc.orq Resources • Non -Profit Housing Association of Northern California, Bay Area Impact Fees, link: non r)rofithousing.org/resources/bay-area-impact- fees • San Mateo County 21 Elements, Grand Nexus Study, Link: http://www.21 elements.com/Nexus- Sfudy/View-category.html • City of San Carlos Housing Impact Fee, Affordable Housing Program - Zoning Code Chapter 18.16, Link: httip://www.coder)ublishing.com/ca/sonCarlos/html /SanCorlosl 8/SonCorlosl 816.html# 18.16, • City of Daly City Housing Impact Fee, Affordable Housing Impact Fees — Zoning Code 17.47.080, Link: https://www.municode.com/library/ca/dale city/co des/code of ordinances? nodeld=TIT17ZO CH17.47 AFHO 17.47.080AFHOIMFE Founded In 2001, HOUSING LEADERSHIP COUNCIL OF SAN MATEO COUNTY works with communities and their leaders to produce and preserve quality affordable homes. We work to provide fundamental solutions to some of our community's most pressing issues. Our membership includes nonprofits, employers, business associations, labor unions, real estate professionals, public agencies, environmentalists, and concerned community members. Housing Leadership Council 4 rev. 1.0 Of San Mateo County www.hlcsmc.orq Housing Leadership Council of San Mateo County 139 Mitchell Ave, Suite 108 South San Francisco, CA 94080 (650) 872-4444 Phone (650) 872-4411 Fax H 0 U SS ING LEADERSHIP info@hlcsmc.org COUNCIL www.hlcsmc.orq SAN MATEO COUNTY Housing Leadership Council 4 rev. 1.0 Of San Mateo County www.hlcsmc.orq J ; MidPen H 6 U S I N G Multi -Family Preservation Program Program Summary Over the past year, MidPen has been piloting a variety of mechanisms to acquire and preserve Silicon Valley's existing multi -family rental housing. Such housing assets are often owned by legacy owners who have not raised rents aggressively with the market, have modest deferred maintenance and, as a result, are "naturally affordable". Such properties may be rented at rates below market by virtue of the way the property was designed or has been managed, but are not subject to an affordability regulatory agreement. Absent a mission -based acquisition of such properties, they are subject to speculative market forces which would seek to acquire and rapidly reposition them, raising rents for the existing residents 20% or more. MidPen received funding from the County of San Mateo to explore this concept as a demonstration program and has recently closed on one opportunity and has another currently under contract in the County. Benefits of this program include: • Anti -displacement: This program is responsive to today's housing market where we see speculative market conditions leading to displacement. This program would prevent displacement, stabilizing rents for existing residents. • Long-term affordability: This program would ensure preservation of the asset as affordable housing for future low and moderate income households, expanding the stock of permanently affordable housing. • Cost and speed: In comparison to new construction, it is less expensive on a per unit basis and can be deployed quickly. • Broader housing need: This program would serve a segment of housing need not currently addressed by existing affordable housing programs, which generally serve 60% of Area Median Income (AMI) and below ($70,320 for a four -person household in San Mateo County). This program would serve households between 60%-120% of AMI. In the current market, housing needs are going further up the income spectrum. • Flexibility: It is a strategy that can be flexible over time as units turn over and respond to evolving housing needs. Income Targetincl This program is responsive to a broader range of housing need than is currently served by housing programs. As can be seen in the chart below, households between 60%-120% AMI are an unserved market with growing needs. We would anticipate that the preservation strategy would ultimately primarily serve households earning between 60%- 60% AMI with the ability to serve households up to 120% AMI depending on the demographics of existing tenants and local market need. The goal of the preservation program is to structure affordability levels based on the incomes of existing residents, ensuring they can stay in their homes. In our due diligence on potential acquisitions, we would find out as much as possible about the incomes of existing MidPen residents, targeting properties where the majority of residents are low and moderate income households. Upon acquisition, we would do a rent -burden analysis of existing households to structure existing rents, balancing project financial feasibility while minimizing rent increases for existing residents. The program would not serve households that can afford market rate rents. To the extent there are existing residents whose incomes exceed 120% AMI and rents are below market, they would not benefit from similar rent protections and likely would transition to true market rate housing over time. The goal would be that long-term income -targeting as units turnover could be much more flexible than existing affordable housing programs, enabling the program to respond to changing needs in the City's rental housing market. $160,000 $140,000 $120,000 $100,000 $80,000 $60,000 $40,000 $20,000 Household Income ecome Required to fford new market rate Unserved Market: Moderate Income Incomes Served through Traditional Housing Programs Now: Based on CICAC published 2015 Median Household Income for a family of 4 a compared to average rem for a new madet rate 2 BR apartment in son Mateo/Sarna Clara Counties Public Policy Multi -family preservation is increasingly recognized as a necessary piece of the housing policy toolkit. San Francisco launched its Small Sites Program in 2014 which provides acquisition and rehabilitation financing for multi -family properties between 5-25 units to stabilize housing for low and moderate income tenants. This program creates permanently affordable rental units through acquisition of existing properties at -risk of speculation and is on track to preserve over 60 units by end of 2015. This program serves as a helpful model. Earlier this year, recognizing this policy need, the San Mateo County Department of Housing released a Demonstration Program NOFA targeted at multi -family preservation program and MidPen received an award to implement this program. We will close on our second property this month, establishing proof of concept. MidPen is actively engaged with other jurisdictions that are interested in exploring this program as a use for their housing funds. Based on our conversations with the advocacy community, multi -family preservation is a strategy that they support. While new construction must remain a big part of any housing strategy, there is growing consensus behind the need for preservation to be an enhanced part of the toolkit. 10 lIi1B'/_DB SUBARU 4V Putnam Automotive Putnam Volvo -Mazda -Subaru -Chrysler -Jeep -Dodge -Ram -Nissan April 6, 2017 Burlingame City Council 501 Primrose Rd Burlingame, CA 94010 Dear Esteemed City Council, Putnam Automotive is proud and humble to have been a part of the fabric of Burlingame since 1965. In order for us to survive and prosper another fifty two years, it is imperative to adapt to the changing nature of the retail car business. Please consider allowing an eighty five foot building envelope on California Auto Row zoned land. Businesses in this area are in desperate need of housing for employees. We believe that higher density, multiuse buildings would allow for that. Thank you for your time and consideration on this matter. Sincerely, Kent Putnam REC V APR - 7 2017 CITY OF BURLINGAME CDD -PLANNING DIV. C"MvS n Jeep RAM California Drive • Bos 982 • Burlingame, CA 4#01 1-0982 • \"VW.Putnamau1nxom • (650)347-4800 • Faa 1650) 3-47-1 }50 CITY OF BURLINGAME a Community Development Department MEMORANDUM DATE: April 15, 2017 TO: City Council Members and Planning Commission Members FROM: William Meeker, Community Development Director Kevin Gardiner, Planning Manager SUBJECT: Residential Design Guidelines—Architectural Character In 1998 the City's first residential design guidelines in the form of the Neighborhood Design Guidebook were implemented. The Guidebook provides guidelines for the design and construction of residential land -uses in a manner that compliments predominant forms of neighborhood architecture in an effort to preserve neighborhood character. In the 2014 Joint City Council/Planning Commission meeting there was a discussion of the design guidelines, particularly as they apply to the interpretation of what styles of residential design form the "character" of a particular neighborhood, and what forms of architectural expression may be inconsistent with certain neighborhoods within the community. Among the issues of concern has been the accommodation of new, contemporary -styled homes within "traditional" pre -WWII neighborhoods where styles such as Craftsman, Tudor, Colonial, and Spanish predominate. Conversely, the reverse could also apply, with the accommodation of new traditionally -styled homes within mid-century neighborhoods where modern and ranch -style homes predominate. The outcome of the 2014 joint meeting discussion was to form a joint task force of two members of the City Council and two members of the Planning Commission. The task force, comprised of Councilmembers Brownrigg and Keighran, and Commissioners Sargent and Terrones, met in early 2015 to review the Neighborhood Design Guidebook and review reference images that had been collected from other communities. The direction was to solicit community input (possibly through a tool such as a visual survey), and reconvene the task force for next steps. At this time the General Plan Update (Envision Burlingame) was initiated, and a theme of "neighborhood character" was introduced early in the process. The intent was to solicit community input on the theme to provide direction back to the task force, and initial outreach activities such as the community workshops and surveys included questions related to neighborhood character. Little feedback related to neighborhood design was received through these activities, but the reason may have more to do with the broad scope of the General Plan Update and having other topics of interest move to the forefront. It is unclear whether the relative lack of input on neighborhood design was representative of the level of interest in the community, or whether it was more a function of other issues taking more attention. Joint City Council/Planning Commission Meeting April 15, 2017 Item c; Residential Design Guidelines — Architectural Character Meanwhile, the Planning Commission has continued to review new projects, including a number of contemporary -styled homes proposed within the traditional neighborhoods. In reviewing the applications to commission has continued to refer to the Neighborhood Design Guidebook for guidance and findings. The commission's Neighborhood Consistency Subcommittee (comprised of commissioners Gaul, Sargent, and Terrones) also meets regularly and has been discussing the design guidelines as they relate to other design issues that have emerged through the design review process. Staff would like to engage the City Council and Planning Commission to check on current thoughts towards architectural design as it pertains to neighborhood character. If there continues to be interest in the topic, specific targeted outreach activities can be initiated as a component of the Envision Burlingame project. Alternatively, either the joint City Council/Commission task force or the Planning Commission's subcommittee could be engaged to provide a "fine tuning" of the design guidelines to address issues of concern. 2