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HomeMy WebLinkAboutPC Minutes 03-19-1996 JT CC/PC Study Session t.~.~.._._ ~ ~ . Study Session City Council and Planning Commission A special Study Session of the City of Dublin City Council and Planning Commission was held on Tuesday March 19, 1996, in the Dublin Civic Center City Council Chambers. The meeting was called to order at 7:00 by Mayor Houston. * ROLL CALL Present: Mayor Houston, Councilmembers Barnes, Burton, Moffatt, Howard and Commissioners Jennings, Geist, Johnson, Lockhart and Zika; Rich Ambrose, City Manager; Ms. Silver, City Attorney; Eddie Peabody, Community Development Director; Carol Cirelli, Senior Planner; Tasha Huston, Associate Planner; and Gaylene Burkett, Recording Secretary. Also resent was Chris Gouig, Consultant. * PLEDGE OF ALLEGIANCE TO THE FLAG Mayor Houston led the Council, Commission, Staff, and those present in the pledge of allegiance to the flag. * ADDITIONS OR REVISIONS TO THE AGENDA None * ORAL COMMUNICATIONS None * WRITTEN COMMUNICATIONS None * PUBLIC HEARING None NEW OR UNFINISHED BUSINESS 5. City of Dublin Housing Program & Inclusionary Zoning Ordinance Mayor Houston stated that there would be a presentation by staff then a discussion between the City Council and Planning Commission. He then asked far the staff report. Joint Study Session 1 March 19, 1996 [3-19SSMI] , , . ~ Mr. Peabody stated the reason for the meeting. He gave a outline of why we are here. He stated staff had done some research on the questions raised at the last study session and Tasha would be outlining the major issues regarding the Inclusionary Zoning Ordinance. Tasha Huston, Associate Planner, gave a brief summary of the staff report. She showed a summary of previous direction given by the Council and Commission. She stated the first major issue was the methods for maintaining affordable housing units. She explained what that meant. She stated that there were examples of what other cities were doing in the staff report. The second major issue was alternatives to on-site construction of Inclusionary units. She outlined the approaches most commonly used by other agencies. The third major issue was incentives for applicants constructing Inclusionary units on-site rather than paying a fee. The fourth majar issue was program administration. Who would administer the program. Ms. Huston gave several options. She stated that Staff recommended the City Council and Planning Commission consider the information provided and direct Staff to prepare a draft Ordinance which contain the 5% Inclusionary requirement; restrictions on the rents and initial sales prices, with resale restrictions or recapture mechanisms in the Inclusionary units. Also, the City could offer alternatives to construction units on site, allow incentives to encourage the construction of the units. Mayor Houston stated we should start with the first major issue, that of maintaining the affordability of Inclusionary housing units. Cm. Moffatt asked if another method could be used to place the Inclusionary fees in a permitting fee for construction. He was concerned on the amount of fees that we charge developers for the construction of houses. Cm. Burton agreed with Cm. Moffatt about the fees. He felt it put the burden on people who can't vote. He thanked Staff and stated he felt that Staff did a good job putting together the information that was requested at the previous Study Session. Cm. Burton asked what will be called affordable housing in Dublin. He felt the City should not get into the social programs of trying to maintain affordable housing as an agency. He felt the fund should be kept with the housing coming from the developer in lieu fee, not the general fund. He was against taking general fund money and putting it into a subsidized account. He felt that if we receive money from the developer far affordably housing, it should be kept in that pot and used only for that purpose. Mayor Houston liked the recapture mechanism the best, the silent seconds. Although there are different ways to do this, he felt it was the best way to go, to help people to get a first loan, have ownership and get started. He felt with the resale restrictions people would not want to purchase a home. Cm. Howard asked if the City would put up the money for the second mortgage and would it apply to any house in Dublin. She felt that it should apply to West Dublin as well as East Dublin. Mayor Houston explained how he thought it would work. If the City had a large pool of money we could write 10% - 20°/a silent seconds. He stated that Livermore was doing it. Ms. Huston stated there was another way to create a second mortgage and that was to create it through paper, without the transfer of funds. In this case, it would not require funds on behalf of the City, the developer would provide the subsidy keeping the price of the homes down, passing a note to the City, and then when the unit was sold that note would be paid off. Mayor Houston stated the City could set the interest rate. This would benefit the home buyer with lower income. Cm. Moffatt asked what a silent mortgage was. Joint Study Session 2 Mazch 19, 1996 [3-195SMI] • . ~ ~ Mayar Houston stated a person does not have to qualify for it. If a person had to qualify for it at a regular bank they may not be eligible for a loan. But because it is our program, in order for us to accomplish the goal of affordable housing and getting people in to homes we would be the silent partner. Cm. Jennings stated the silent second should be recorded. She stated Livermore used a factor to determine what the sale price was going to be to another person within the same income level. Ms. Huston stated that Livermore had 4 options. One option was the resale price restriction. Another option was to refmance the second mortgage or transfer it to the next buyer. Paying off the second mortgage was also an option. Cm. Jennings asked if these projects would trigger a mello-roos assessment. Mayor Houston stated there wasn't anything planned for that. He felt it was typically for schools. Cm. Zika asked what would happen if we had went to the silent second and the buyer fareclosed on the first? Ms. Huston stated that a subardinate arrangement would need to be set up to determine which mortgage would be paid first. She thought the lender of the first mortgage would want to insure the unit was sold. Ms. Huston explained the process that was used in Livermore. She thought the second was the gap between the price which was affordable to the moderate income family and the market price. Cm. Zika stated that from what he understands on these programs is that once a family is in the home there is nothing stating they have to leave after they exceed the moderate income level. Cm. Howard asked if the home owner was allowed to rent out the property? Mayor Houston stated that these homes would be an owner occupied property. Cm. Jennings stated that there were provisions that state the owner occupied issue. Cm. Burton stated that the 2nd mortgage should be paid if they move out. He was not interested in putting a cap on the resale price of the home. Mayar Houston would like to see all types of senior housing eligible as welL He felt there was a need for those type of properties in Dublin. He explained some of the different varieties of senior housing. He stated we could serve that type of market with a silent mortgage also. He asked what happened in the future when we have met our allotment, what happens to the Ordinance and fee. Cm. Barnes indicated they could come back to the City Council and ask them to get rid of the fee. Cm. Lockhart asked the administrative costs to handle this program. Mayor Houston stated it may be managed by either Dublin Housing Authority or by contract. Cm. Moffatt asked if there could be an incentive to the builder to produce a low income house. Cm. Burton stated he thought a developer could build a smaller unit within the complex that would meet this requirement. Cm. Moffatt wanted to see no resale restrictions if the project was approved. Cm. Howard asked if we would set a limit on the price of the house. Joint Study Session 3 Mazch 19, 1996 [3-19SSMI] . , ~ ~ Mayor Houston stated the house would have a price limit. Ms. Huston stated an affordable housing agreement would be set up with the subdivision. Cm. Lockhart asked if we would be subsidizing rents alsa Mayor Houston stated we would not subsidize rents but we could offer a subsidized interest rate. Cm. Zika stated that an RFP could be put out specifying what procedures were required. Cm. Jennings asked about affardable homes far seniors. She felt that seniors in their 70's don't want to start a 30 year mortgage and are more likely to rent, and she wanted this to include rental units. Ms. Huston stated at the time of design review, an agreement would have to be established to address the rental issue. The consensus was B. on the overhead: Recapture mechanisms such as silent second mortgages. The Council then began discussing the second issue, "Alternatives of on-site construction." Cm. Lockhart stated that he liked a115 options, and they should be left open for the choice of maximum options. Cm. Burton asked how could a developer build a single family unit for the low income group. Mayor Houston thought by providing the maximum alternatives, that was good, and a contractor should get credit for what they do provide, but do not get credit for what they don't provide. And for what they don't provide, they would pay a fee. This is a change from last meeting in that we will allow for credits. Ms. Huston gave an example for clarification. If a developer provided for the moderate units, but not the low or very low units, he would be satisfying one percent of the five percent requirement, or 20%. This would mean that he would pay 80% of the fee. Mayor Houston stated that was correct. Cm. Barnes questioned whether the minutes from last meeting indicated that if a contractor does not provide for all the types of units, they do not get any credit. This issue was discussed and clarified, and resulted in consensus that the new "credit" policy is a departure from the policy of "provide units at all income levels or pay fee." The discussion then turned to the third issue: "Incentives for constructing Inclusionary units." Mayor Houston stated that we already offer priority processing. Another incentive would be deferred payment of impact fees - payment of 30% of fees initially, 70% prior to occupancy of the first unit for those units that were being constructed. Mr. Peabody stated that it could be done in a variety of different ways. The Ordinance would be made clear as to what types of incentives would be offered. Cm. Burton was concerned that the project be fmished, and the fees be paid. He did not want to see partial projects with partial fees. Mr. Ambrose stated we should be careful, because some developers may go bankrupt before the project is finished. Joint Study Session 4 March 19, 1996 [3-19SSMI] ~ . ~ As far as Design Incentives, there was consensus of "no" to all examples shown on the overhead exhibit . Cm. Zika stated you could reduce setbacks. Cm. Barnes stated a smaller unit could be a design incentive. Also, outside porches create a quaint atmosphere. Cm. Burton stated the developer was supposed to present the design incentive and we should take a look at each one on a case-by-case basis. Mr. Peabody stated that if the developer was to build more than the 5%, then the first list of incentive options could maybe apply. This list was tools for a developer to use if someone was to build more than 5%. They are not guaranteed. Cm. Burton suggest we keep both lists of incentive options. The consensus was reached that the list of incentives should be included in the ordinance, but with the deferred fees clarified. The Council and Commission then discussed the fourth issue: "Administration and Implementation" Mayor Houston suggested the Dublin Housing Authority manage it now. In the future, when it got bigger, it could be looked at again. Mr. Ambrose stated Staff could bring back some options. One would be for the Housing Autharity staff to report back to the City Council. Cm. Burton stated that someone would have to monitor this very carefully. Cm. Howard wanted to see it as two different programs. Mayar Houston wanted seniors and different types of housing projects to get their fair share. Ms. Huston gave an example of how a senior housing project could work. Mayor Houston stated that it should be kept to Senior citizens and Dublin residents. Cm. Zika asked for the defmition of low, vety low, and moderate to be included in the draft Ordinance. Cm. Jennings asked if Dublin residents and seniors would get priority. Cm. Zika asked when the Ordinance would apply, for example, in Eastern Dublin, a project has 850 houses, but units mat be sold off in smaller lots of 20. Would the 5% apply toward the 850 or 20 units. Ms. Huston stated our Ordinance would have to specify when the Ordinance would become effective. Cm. Burton stated that at the planned unit development stage, before the tentative map, would be a good spot to apply the Ordinance. Mayor Houston stated that the City Council and Planning Commission had given staff some direction in order far Staff to prepare a draft Ordinance. The Mayor asked whether anyone in the audience wished to speak on this issue. Joint Study Session 5 Mazch 19, 1996 [3-19SSMI] ~ . ~ • Matt Koart, Kaufinan & Broad, stated he did not have a problem with the fee, he asked if project met moderate income housing, is a deed restriction required. Mayor Houston stated if they could build it and sell it, he did not feel that a deed restriction was necessary. Rob Yohai asked about seniors as a target group. Can you get double credit? Mayor Houston stated that you can not get double credit. He stated that we need more rental housing in this area. Ms. Huston gave an example where if there was a project with a waiting list, first priority could be given to seniars. Jim Parsons, PA Design resources, asked if the draft ordinance would apply to office, commercial or industrial zoning. Mayor Houston stated no. Mr. Parsons felt that was unfair. The new housing development was paying for the affordable housing program. He suggested they spread the cost of Inclusionary housing over a wider base. Cm. Barnes asked how much would they sell a 3,600 square foot house for. Mr. Parsons stated that there was $50,000 in fees before you buy a nail or brick. He estimated the 3,600 sq. ft. house could sell for $450,000. Cm. Johnson asked what the townhomes would sell for. Mr. Parsons stated they were still trying to get a grip on the cost of fees. Cm. Zika asked if other cities assess a fee on the ordinance. Ms. Huston stated Pleasanton assesses a fee. Cm. Zika stated we could set up two ordinances, one for commercial fee only and one for residentiaL Ms. Gouig stated that Napa County determined a fee amount for commercial and industrial. Ms. Silver stated the issue is like comparing apples and oranges. She stated a study would be needed to show if there was a need to impose a fee on commercial. Our General Plan requires this program to apply to new residential development. Mr. Parsons stated the end result was the same. We have to look at how to provide affordable housing. Mayor Houston stated that with the $17,000,000 we could provide 380 units; very low income or, we could provide 850 silent second loans, although this does not meet the ABAG figures goals. Pat Cashman, Alameda County, felt that what he had heard was promising. The county selected K& B because they provide a product that meets the needs. He proposed one modification to allow credit to developers such as K&B if they build more than the required 1°/a of units affordable to moderate income families. Mayar Houston felt that type of credit was not appropriate, but the developer would be able to bank against a future project. Joint Study Session 6 Mazch 19, 1996 [3-195SMI] ti , ~ ~ • Terry Ward, North Bay Homes, Novato, introduced a program they use to assist in affordable homeownership, they have a program called CASA. Currently that are expanding through California. They address fair market value through fmancing, as opposed to restrictions. They work with financial institutes or developers, and work with private parties to help more people. Mayor Houston asked questions regarding how the financing is set up. Mr. Ward stated they function as a mortgage banker. The Mayor asked Mr. Ward to leave business since the Council and Commission expressed interest in the program. The meeting was adjourned at 935 p.m. Respectfully submitted, ~ ~ ir i Ll~~L~~/~ lanning Commission Chr rperson AT EST: Communi evelopm t Dire tor Joint Study Session 7 Mazch 19, 1996 [3-19SSMI]