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HomeMy WebLinkAboutMin - CC - 2017.10.16 Burlingame City Council October 16, 2017 Approved Minutes 1 BURLINGAME CITY COUNCIL Approved Minutes Regular Meeting on October 16, 2017 1. CALL TO ORDER A duly noticed regular meeting of the Burlingame City Council was held on the above date in the City Hall Council Chambers. 2. PLEDGE OF ALLEGIANCE TO THE FLAG The pledge of allegiance was led by Mike Horwitz. 3. ROLL CALL MEMBERS PRESENT: Beach, Brownrigg, Colson, Keighran, Ortiz MEMBERS ABSENT: None 4. STUDY SESSION A study session was held at 6:00 pm in Conference Room A to discuss short-term rentals. 5. UPCOMING EVENTS Mayor Ortiz reviewed the upcoming events taking place in the city. 6. PRESENTATIONS a. HOME FIRE SAFETY INSPECTION CONTEST Deputy Fire Marshall Christine Reed explained that October is National Fire Prevention Month. She stated that the National Fire Protection Association’s theme this year is “Every second counts: Plan 2 ways out!” She explained that using this theme, CCFD worked with the local schools to teach students about fire safety concepts. The students were given a safety checklist and asked to go home and review the concepts with their families. The students subsequently were entered into a Home Fire Safety Inspection Contest. Deputy Fire Marshall Reed congratulated this year’s Fire Safety Inspection Contest grand prize winner: Ella Grace Knight, a second grader from Hoover Elementary School. Congratulations to Ella! Burlingame City Council October 16, 2017 Approved Minutes 2 b. BUSINESS LANDSCAPE AWARD Beautification Commissioner Kirchner began the presentation for the Business Landscape Award by reviewing the past nine winners. He explained that the award recognizes the efforts of businesses in Burlingame to beautify the city and encourage attractive landscapes in the community. Commissioner Kirchner announced that this year’s winner of the Business Landscape Award is Coldwell Banker Residential Brokerage; a slideshow showcased the building’s attractive landscape. Mike Horwitz owner of Coldwell Banker was presented with a plaque and a Dale Perkins’ watercolor rendering of his property. Thank you to Dale Perkins for your painting, and congratulations to Mike Horwitz. 7. PUBLIC COMMENT There were no public comments. 8. CONSENT CALENDAR Mayor Ortiz asked the Councilmembers and the public if they wished to remove any item from the Consent Calendar. No items were pulled. Councilmember Keighran made a motion to adopt the Consent Calendar; seconded by Vice Mayor Brownrigg. The motion passed unanimously by voice vote, 5-0. a. ADOPTION OF CITY COUNCIL MEETING MINUTES OCTOBER 2, 2017 City Clerk Hassel-Shearer requested Council adopt the City Council Meeting Minutes of October 2, 2017. b. ADOPTION OF AN ORDINANCE ADDING SECTION 18.07.140 TO THE BURLINGAME MUNICIPAL CODE REGARDING THE IMPLEMENTATION OF STATEWIDE STANDARDS FOR THE INSTALLATION OF ELECTRIC VEHICLE CHARGING STATIONS CDD Meeker requested Council adopt Ordinance 1946. c. ADOPTION OF AN ORDINANCE AMENDING CHAPTER 3.40.010 OF THE BURLINGAME MUNICIPAL CODE REGARDING PLANNING COMMISSION COMPENSATION City Attorney Kane requested Council adopt Ordinance 1947. 9. PUBLIC HEARINGS There were no public hearings. Burlingame City Council October 16, 2017 Approved Minutes 3 10. STAFF REPORTS AND COMMUNICATIONS a. POTENTIAL USES OF HOUSING IMPACT AND COMMERCIAL LINKAGE FEES Planning Manager Kevin Gardiner gave an overview of the staff report concerning the potential uses of housing impact and commercial linkage fees. He explained that the City Council identified housing as one of its four key priorities to focus on in 2017. In establishing housing as one of its key priorities, Council indicated interest in updating the City’s housing policies to promote development of affordable housing for lower-income individuals and members of the local workforce. Mr. Gardiner explained that earlier this year, the City Council adopted an ordinance establishing commercial linkage fees. He stated that over time, these fees will provide a dedicated source of funding for programs supporting workforce housing in Burlingame. Additionally, he explained that staff will be asking Council to consider a housing impact fee program. He asked that Council provide initial thoughts regarding the appropriate “per square foot” fee amounts under the housing impact fee program so that staff can prepare for later discussion of the housing impact fees. Mr. Gardiner explained that the staff report provides an overview of potential uses of impact fees. He stated that this is intended to provide a sampling of options but is not meant to be exhaustive. He noted that the City received a letter from “Housing for all Burlingame” that outlined additional options. Accordingly, he stated that staff is looking for Council’s direction on whether further possible uses of the fees warrant research. Mr. Gardiner introduced Armando Sanchez from HEART (Housing Endowment and Regional Trust) to discuss the nonprofit organization’s mission to meet critical housing needs in San Mateo County by raising both public and private funds. Mr. Sanchez explained that HEART has a dual status as both a JPA (19 member cities and County of San Mateo) and as a 501(c)(3) nonprofit. He stated that HEART’s JPA status allows the organization to have access to public funds, and HEART’s 501(c)(3) status allows them access to private donations and foundation grants. Mr. Sanchez stated that to date, HEART has invested over $18.5 million and helped to create over 1,126 affordable units. He stated that the organization’s main focus is its loan program to housing developers. He explained that HEART provides short-term, quick turn-around loans to assist with the early stages of project development for nonprofit organizations like Mid-Peninsula Housing. He then reviewed a map that displayed the projects that HEART had helped to fund up and down the Peninsula. Mr. Sanchez discussed the $5 million loan the County of San Mateo provided HEART. He stated HEART hoped that the County’s actions would encourage cities to lend their idle housing money to HEART so that it could be invested in affordable housing. He explained that if cities were interested in loaning funds, the loans would be short term to jump start projects. Cities would then be repaid their funds when they were ready to develop their own housing project. Additionally, Mr. Sanchez discussed HEART’s first-time homebuyer loan program. He explained that to date, HEART has invested $4.3 million and assisted 75 families. Burlingame City Council October 16, 2017 Approved Minutes 4 Vice Mayor Brownrigg asked how the first-time homebuyer loan program worked. Mr. Sanchez explained that HEART works in conjunction with Meriwest Mortgage to offer a combined loan amount of up to $781,875. Vice Mayor Brownrigg stated that one of the proposals in the staff report was for the City to loan its impact fees to HEART until the City is ready to use them. He stated he wanted to understand the risks and the returns if the City chose this option. Mr. Sanchez stated that HEART secures a majority of their loans against property. Vice Mayor Brownrigg asked if the loan was secured against the land, meaning that the developer already owned the land, why the developer needed HEART’s loan. Mr. Sanchez stated that the loan was for pre- development costs, and that these costs can be upwards of $2 million. Vice Mayor Brownrigg asked if there was a rate of return to the City on the loan. Mr. Sanchez replied in the affirmative, stating that HEART would be paying the interest rate of the County housing pool to cities on a quarterly basis. Councilmember Colson asked if the normal term for a HEART loan was three years. Mr. Sanchez replied in the affirmative, stating that it can roll up to five years. Councilmember Colson stated that after three to five years, the City would receive its funds back plus interest. She asked if there was a callback provision to the loan. Mr. Sanchez stated that this would be a negotiating point. However, he stated that ideally HEART intends the money to be a pool from various cities, and therefore the money could be returned if necessary. Mayor Ortiz opened the item up for public comment. Burlingame resident Berta Schultz thanked Council and staff for the report and undertaking impact fees. She stated that she felt impact fees should be used for purchase of current affordable units in Burlingame. Burlingame resident Cynthia Cornell asked that Council look into using City lands for affordable housing developments and developer incentives to create affordable units. Burlingame resident Jennifer Pfaff talked about the need for traffic mitigation with the creation of these new housing developments. Mayor Ortiz closed the public comment. Vice Mayor Brownrigg stated that the impact fees fund should be managed to maximize affordable housing. He discussed the idea that the funds needed to be leveraged to have the biggest impact. For example, if the City decided to use the funds to buy a building, it could take ten years and only help a few. Instead of that option, he stated he was in favor of parking the impact fees at HEART, while the City increases funds and finds projects. He stated that he was not in favor of using the money for rent subsidies because the funds would end up in the pockets of for-profit landlords. Therefore, he didn’t believe this was the best use of the funds. Burlingame City Council October 16, 2017 Approved Minutes 5 Additionally, Vice Mayor Brownrigg talked about using the money to help the non-profit sector acquire affordable housing and ensure it remains affordable. He stated that he was in favor of the options that looked to retain and maintain the housing stock. Councilmember Beach asked Vice Mayor Brownrigg to elaborate on his idea that he wouldn’t want the City to wait 10 years to buy a building and only assist a few people. Vice Mayor Brownrigg stated that he thought the best use of the money would be to use it to assist organizations like Mid-Peninsula to obtain the capital necessary to purchase a building. He discussed the idea that real estate was moving quickly and it was difficult for nonprofits to amass the necessary capital to purchase a building. Therefore, he believed that investing the money into non-profit affordable housing organizations would enable these organizations to stretch City funds further to provide far more housing than if the City chose to save the funds until it could buy an apartment complex. Mayor Ortiz stated that Vice Mayor Brownrigg’s idea was to provide short-term bridge capital until the nonprofit is able to stabilize the funding. Councilmember Beach asked if Vice Mayor Brownrigg would envision this leveraging to be limited to within the city limits. He replied in the affirmative. Councilmember Beach stated that she agreed that the City needs to prioritize long-term solutions like below market rate workforce housing using either city owned property or acquiring new property. She added that she liked the idea of the City investing funds into HEART and bridge-capital. However, she stated that she would like to see the City explore short-term solutions to assist community members. She stated that in talking to housing experts, she believed that there should be need-based rent subsidies for those that are vulnerable. She stated that if the City could help keep even 150 families from being displaced, she would be interested in exploring rent subsidy options. She explained that she had reason to believe that there may be resources outside of city staff, either at the County, or via non-profits or for-profits, that could administer a rent subsidy program for the City. Councilmember Beach stated that she would also be interested in using the funds as loans to developers to bring their buildings in line with safety regulations in exchange for keeping rents at an affordable level. Additionally, she asked staff to analyze and report back to the Council on what impact the new State housing legislation will have on the City. Councilmember Keighran stated that in looking at the RHNA (Regional Housing Needs Allocation) numbers, the greatest need is the “very low” category of income. As a result of this need, she explained that she would like to focus on short-term goals that would assist this group. She stated that she believed that rent subsidies could work if the City focused on assisting those in the “very low” category. Additionally, she discussed using rent subsidies for instances of extraordinary circumstances (health issues, divorce, etc) and for the displacement of renters whose buildings were purchased. Burlingame City Council October 16, 2017 Approved Minutes 6 Councilmember Keighran stated that she liked the idea of leveraging the impact funds into a non-profit organization’s housing project. She also suggested loan programs for landlords to bring their buildings up to standards, with the condition that they maintain affordable units. Councilmember Keighran stated that in regards to setting housing impact fees, she needed a little more information. She discussed using a tiered system where fees increased with the size of the development/ number of units. She said she would also like to see how adopting housing impact fees in neighboring cities has affected their development of housing. She asked if developers could be presented with the option of either paying the housing impact fee or providing below market rate apartments. She also asked if a prevailing wage discount would be included in the housing impact fees like it was for the commercial linkage fees. Councilmember Colson stated that in the staff report, table 5 is a list of proposed projects subject to commercial linkage fees. She stated that currently, based on two projects in the pipeline, the total impact fees range from $3.3 to $3.9 million, and that this is the start of the fund. She discussed approaching the use of these funds like a pension fund and that Council needed to decide if funds would be expended as received or saved and invested. She also discussed the new General Plan and how the amendments could create new communities and areas for affordable housing. Councilmember Colson stated that she agreed with Councilmembers Beach and Keighran about rental subsidies for emergency situations. She stated that she was in favor of this because it allowed the City to help those in the “very low” income category. She stated that she believed Council would be assisting those in the “low” and “moderate” RHNA categories through the development planned for Lots F and N. Councilmember Colson stated that she has worked with Armando Sanchez for the past few years and has full faith in the work that HEART does. She stated that loaning funds to HEART for affordable housing development would be great public policy. Additionally, she stated that the Council should think of first- time home buyers. She stated that it is hard for individuals to purchase homes in the current market and thought the City should consider working with HEART to create an affordable first-time homebuyer program in the city. Mayor Ortiz stated that as a lender who has been in the area for many years, one of his frustrations with the first-time homebuyer programs is that the conforming loan limit has never allowed him to participate in them. He stated that the loans are way too low for the Peninsula. He stated that first-time homebuyer programs in the area would not be servicing low and very low income people; instead, they would be serving moderate income people. Therefore, he didn’t think this was something the Council should pursue. Mayor Ortiz stated that he liked the idea of providing funding to HEART to assist with affordable developments even outside of the city. He stated that if the Peninsula cities pooled their funds together for housing projects, they would be able to make a difference. He explained that if the City tried to just focus on projects within the limits of Burlingame, the Council might lose out on good opportunities. Mayor Ortiz stated that he liked the idea of emergency rent subsidies with a clear time limit. He explained that his one concern with rent subsidies was who would administer the program. Burlingame City Council October 16, 2017 Approved Minutes 7 Mayor Ortiz stated that he liked Vice Mayor Brownrigg’s idea of bridge financing to assist nonprofits in purchasing land for development. Additionally, he stated that he liked Councilmember Keighran’s idea of using the funds to assist in refurbishing buildings with the commitment to keep rents affordable. In regards to housing impact fees, Mayor Ortiz stated he liked the idea of a tiered system. Vice Mayor Brownrigg stated that what he was hearing from Council is that his colleagues were interested in rent subsidies for extraordinary instances. He stated that what Council needed to consider is how much the City should spend a year for rent subsidies versus loaning money to nonprofits to build/repair affordable housing. He stated that he didn’t have a number to throw out but that he did believe in curative solutions versus palliative. He asked if any of his colleagues had considered how large the potential rent subsidy fund should be. Councilmember Colson responded that she had been thinking about this. She stated that if the City had a $4 million fund and assumed they were going to earn 5%, they would be earning $200,000 a year. Therefore, the fund could have $200,000 a year for rent subsidies so as to not eat into the principal and allow the City to invest in non-profit housing projects. Councilmember Beach stated that if 50 families could be helped by $200,000 a year through an emergency rent subsidy program, it would be worth it. Councilmember Beach stated that as far as long-term goals, in talking with housing experts, she was told that the City needed $3-6 million in seed money to acquire property and build units. Councilmember Beach asked about Burlingame’s below market rate units where the affordability covenant is expiring. CDD Meeker stated that most of those units that are currently in the program were designated when the City had an inclusionary housing ordinance that only required units to be maintained for a period of 10 years at the moderate level of affordability. He stated that what the City has found is that most of those units that are soon expiring are in higher-end developments where the cost of acquisition would be quite high. Vice Mayor Brownrigg stated that he appreciated Councilmembers Keighran and Colson focusing the Council on the very low end RHNA numbers. However, he stated that he didn’t know exactly what this meant and what kind of units they are and how to address the issue. He stated that he was adverse to long- term subsidies because fundamentally you are just putting money into the landlords’ pockets. Vice Mayor Brownrigg stated that on the idea of a displacement fund, he explained that he had a hard time saying that public money ought to solve what is a private problem. He discussed the possibility of requiring the buyer to assist displaced individuals by building in a cost to the sale of the building. Councilmember Colson stated that if the fees coming in for the first year are $2 million, the City should set aside two or three years of short-term operational funds to meet the rent subsidy needs. She stated that the City could then invest money into HEART, while sorting out the new State housing legislation and looking for additional funding. Burlingame City Council October 16, 2017 Approved Minutes 8 Vice Mayor Brownrigg stated that if Council chose to loan money to HEART, the City would be able to regain those funds when Council identifies a use or project. Councilmember Colson stressed the need to think creatively about how to finance projects and what they might be able to do with the funds. Vice Mayor Brownrigg discussed the fact that with the creation of an endowment for rent subsidies it would necessitate the hiring of management, which would create an additional cost. Mayor Ortiz asked if there was a nonprofit that could handle the endowment. City Manager Goldman replied that the SF Chronicle’s Season of Sharing Fund could provide a model for the City. Councilmember Beach stated that the Council would be foolish to make any steadfast plans tonight. Instead, she thought that Council should wait to hear back from staff based on further research and analysis. Councilmember Beach stated that she didn’t want to lose sight of the missing middle where household income is $70,000 - $120,000. She stated that these individuals are spending a lot of their salaries on housing and traveling two to three hours a day for work. Additionally, she stated that in talking with the School District, she found that a family of four can qualify for free lunch if they make approximately $32,000, and they qualify for reduced lunch if they make up to $45,000. She stated that this is one in ten kids in the School District right now. Councilmember Beach stated that HEART does a great job with the first-time homebuyer program but that she didn’t believe that this was the best usage of City money as it would only help a handful of people. In regards to housing impact fees, Councilmember Beach stated that she would like to explore setting fees at a rate where it would be attractive for a developer to consider building below market rate unit(s) instead of paying the fee. Councilmember Colson stated that if they do give the public an option of either housing impact fees or below market rate unit(s), she thought that the City should develop a specific menu from which the developer could choose, whether it be very low priced units or moderate units, etc. Vice Mayor Brownrigg asked why a couple cities had higher housing impact fees for apartments versus other types of housing. Planning Manager Gardiner stated that he would have to get back to Council with more information on this matter. Vice Mayor Brownrigg asked if the City could require either below market rate units or housing impact fees. Planning Manager Gardiner stated that this was a policy decision that other cities had made. Vice Mayor Brownrigg stated that if he is asked to choose between requiring new developments to have below market rate units or housing impact fees, he is not sure what he would require. He stated that he would like to see Council discuss this further, as he believed that the stock of below market rate housing would accumulate faster by giving developers the option. Burlingame City Council October 16, 2017 Approved Minutes 9 Mayor Ortiz stated that he would like to know how Measure T limits the City requesting below market rate units. City Attorney Kane stated that pursuant to Measure T, the City can’t require developers to have below market rate units. Councilmember Colson asked if the City provided the developer the option of below market rate units or housing impact fees, would it require a change in legislation (Measure T). City Attorney Kane stated that staff would need to review how they are setting the fees, etc to ensure that they aren’t creating a situation which is a compulsion versus an option. She stated that she would need to do further review to see if this was a possibility. Mayor Ortiz asked staff to make recommendations based on Council’s discussions and to bring back housing impact fees for further discussion. 11. COUNCIL COMMITTEE AND ACTIVITIES REPORTS AND ANNOUNCEMENTS Council reported on various events and committee meetings they each attended on behalf of the City. 12. FUTURE AGENDA ITEMS Vice Mayor Brownrigg discussed extending the application deadline for the Traffic, Safety and Parking Commission as one of the incumbents decided not to reapply. Councilmember Colson stated that she believed this had happened with other commissions. Therefore she advised that the Council should discuss extending for all commissions if an incumbent doesn’t reapply. Vice Mayor Brownrigg asked that Council discuss suspending the requirement that to apply for a commission seat, you must attend a meeting. Council agreed to discuss both questions at the next meeting. 13. ACKNOWLEDGEMENTS The agendas, packets, and meeting minutes for the Planning Commission, Traffic, Parking & Safety Commission, Beautification Commission, Parks and Recreation Commission and Library Board of Trustees are available online at www.burlingame.org. 14. ADJOURNMENT Mayor Ortiz adjourned the meeting at 9:14 p.m. Respectfully submitted, /s/ Meaghan Hassel-Shearer City Clerk Burlingame City Council October 16, 2017 Approved Minutes 10