HomeMy WebLinkAbout6.2 AptConversionToCondo
CITY CLERK
File # DWl~[Q]-~
AGENDA STATEMENT
CITY COUNCIL MEETING DATE: September 7, 2004
SUBJECT:
ATTACHMENTS:
RECOMMENDATION:
y
FINANCIAL STATEMENT:
BACKGROUND:
Public Hearing - P A 04-044 Adoption of Resolution Initiating
Proceedings to Adopt an Ordinance Regulating the Conversion of
Existing Apartments in the City to Condominiums
(Report Prepared by: feri Ram, Planning Manager)
1.
Resolution Initiating Proceedings to Adopt an Ordinance
Regulating the Conversion of Existing Apartments in the City
to Condominiums.
Notice of Public Hearing to Consider Initiating Proceedings
to Adopt a Condominium Conversion Ordinance.
Copies of Sections from the 1990 Housing Element.
Copies of Sections from the 1999 - 2006 Housing Element.
2.
3.
4.
1.
2.
3.
4.
5.
Open Public Hearing;
Receive Staff Presentation;
Question Staff and the Public;
Close Public Hearing and Deliberate; and
Adopt Resolution Initiating Proceedings to Adopt an
Ordinance Regulating the Conversion of Existing Apartments
in the City to Condominiums
No financial impact at this time.
State law provides that cities have the responsibility to use the powers vested in them to facilitate the
improvement and development of housing to make adequate provision for the housing needs of all
economic segments of the community. (See Gov. Code, § 65580(d).) At the local level, cities implement
state housing law policies through the adoption of the Housing Elements of their General Plans, which
elements are reviewed and certified by the state's Department of Housing and Community Development
("HCD"). (See Gov. Code, §§ 65583, 65585.) Among other things, Housing Elements must contain a
statement of the community's goals, objectives and policies related to the maintenance, preservation,
improvement, and development of housing along with an action program to implement these goals,
objectives and policies. (See Gov. Code, § 65584(b)-(c).)
______________________________________________________-______w~_____~_______________________~.___~___________
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COPIES TO:
In-House Distribution
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ITEM NO.-D4
The City's 1990 Housing Element included several policies that encouraged and suggested actions to
ensure the availability of rental housing. One policy required that large multifamily projects include a
rental component for a five-year time period. Another policy required the monitoring of the availability
rental housing and, if monitoring disclosed that it was necessary, the enactment of a condominium-
conversion ordinance (Attachment 3). At the time of the adoption of the 1990 Housing Element, there
was a concern that, because there were no condominiums or apartments under development, it was
possible that applications would be submitted to convert existing apartments into condominiums.
On June 3, 2003, the City Council approved the City of Dublin Housing Element (1999 - 2006) ("the
Current Housing Element"), and the State Department of Housing and Community Development certified
it on July 11,2003. The Current Housing Element eliminated the program that required the monitoring of
the availability of rental housing and potential enactment of condominium-conversion ordinance,
reasoning that there was little likelihood that existing rental housing property owners would convert their
properties to condominiums. It concluded that conversions were unlikely because of the strong demand
for rental housing in Dublin coupled with the development of numerous condominiums (including 1396
condominium units then-currently under construction) that would tend to satisfy the demand for
condominiums. The Current Housing Element also noted that the City would assess the need for a
condominium-conversion ordinance each time it updates the Housing Element (Attachment 4).
Since the adoption of the Current Housing Element, conditions in the housing market have changed
markedly. The Community Development Department has noted that the incidence of condominium
conversion projects in other communities is increasing. In addition, Staff has received many questions
from possible investors and purchasers of existing apartment communities about the City's requirements
in relation to condominium conversions; Staff believes that the increase in condominium-conversion
activity due to the following factors:
· Higher vacancy rates for apartments as more and more people are able to qualify for loans for
homes due to lower interest rates;
· An increased market for condominiums in the area;
· The ability of the property owner to maximize profit by selling units rather than renting them.
In the past 10 years the City has seen the development of approximately 1,500 residential apartment units,
for an overall total of approximately 2,800 units throughout the City. It should be noted that
approximately 1,119 of these units are already mapped for condominiums and would not be subject to the
condominium conversion ordinance or the City's Inclusionary Housing Ordinance. Additionally, if all
these units converted, the ratio of apartments to ownership units would be greatly reduced.
The remaining apartment units provide a type of housing that is a key to a healthy diversity of housing
stock in the community. Apartments provide housing for all levels of affordability in the community and
are a valuable tool for providing work force housing.
In the past seven months, Staff has received inquiries from several existing and potential apartment
developments of their intent to file subdivision documents to convert their projects to condominiums.
These possible projects include:
Existing Proiects
Iron Horse Trail Apartments (Dougherty Road) -
Archstone Apartments - Emerald Park ( Hacienda Drive)-
117 units
324 units
2úQ4-
New Proiects
A valon Bay Apartments (Transit Center) -
305 units
Staff believes that the conversion of one or two of the City's apartment communities could have a major
impact on the diversity of the City's housing stock, in that it would remove from the market a significant
percentage of the existing rental units. If sold rather than rented, the units would no longer be available to
a segment of the community that is not in a position to purchase such units. In addition, the loss of these
units would likely decrease the vacancy rate and accordingly tend to increase rents, and this would tend to
further exacerbate the City's shortage of affordable rental units. This might cause a lasting imbalance in
the diversity of housing stock in the City. In addition, conversion of apartments without addressing all of
the policy issues would be in conflict with the assumptions that formed the basis of the City's Housing
Element.
At the present time should a property owner file a request for a condominium conversion, the application
would be processed in accordance with State law under the Subdivision Map Act. The Map Act contains
provisions that require notice to the tenants and gives tenants the right to purchase the units before they
are placed on the market for sale to the general public. State law permits the City to expand upon these
basic requirements through the adoption of a condominium-conversion ordinance. For example, a
condominium-conversion ordinance could limit conversions to maintain a balance of housing stock and
could require the provision of affordable units under the City's Inclusionary Zoning Ordinance.
Because of market conditions, Staff believes that it is important to begin the development of a
condominium-conversion ordinance. As there are many different mechanisms for regulating conversions
in effect throughout the state, City Staff believes it appropriate at this time to explore the various options.
This study and the eventual drafting would take an unknown amount of time, but Staff anticipates having
an ordinance ready to present to the City Council within 6 months.
Staff is concerned that while the condominium-conversion ordinance is under development, a subdivision
application might be filed to convert an existing apartment complex to condominiums. For the reasons
indicated above, such a conversion could potentially have an impact on the City's ability to provide
housing for all economic segments in the community.
Thus, if the City Council determines that a conversion of apartments to condominiums might negatively
impact the City's goal and State law obligation to adequately provide for the housing needs of all
economic segments of the community, Staff recommends that the City Council adopt the attached
Resolution initiating proceedings to adopt a condominium-conversion ordinance. The Resolution is
designed to prevent those that file subdivision applications to convert existing apartments to
condominiums or other forms of ownership that permit the sale of individual units from avoiding the
pending condominium-conversion ordinance. Ordinarily, under the Subdivision Map Act, the City may
only apply standards in effect at the time that an application for a tentative subdivision map is deemed
complete. (Gov. Code, § 66474.2(a).) However, if the City initiates proceedings by resolution and
publishes a public notice containing a description sufficient to notify the public of the nature of the
proposed change in the zoning or subdivision ordinances, the City may apply the ordinance enacted or
instituted as a result of the proceedings that are in effect on the date the local agency approves or
disapproves the tentative map. (Gov. Code, § 66474.2(b).) The City published the appropriate notice as
required by Government Code section 65090 (Attachment 2) and, in addition although not required by
law, provided mailed notice to all the owners of apartments in the City. The attached Resolution would
take the formal step of initiating proceedings.
30[)Ý"
RECOMMENDATION:
Staff recommends the City Council Open Public Hearing; receive Staff presentation; question Staff and
the Public; close the Public Hearing and deliberate; and adopt Resolution (Attachment 1) initiating
proceedings to adopt an Ordinance regulating the conversion of existing apartments in the City to
Condominiums
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RESOLUTION NO. -04
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF DUBLIN
INITIATING PROCEEDINGS TO ADOPT AN ORDINANCE REGULATING THE
CONVERSION OF EXISTING APARTMENTS IN THE CITY TO CONDOMINIUMS
WHEREAS, State law provides that cities have the responsibility to use the powers vested in
them to facilitate the improvement and development of housing to make adequate provision for the
housing needs of all economic segments of the community; and
WHEREAS, at the local level, cities implement state housing law policies through the adoption of
the Housing Elements of their General Plans, which elements are reviewed and approved by the state's
Department of Housing and Community Development ("HCD"); and
WHEREAS, among other things, Housing Elements must contain a statement of the community's
goals, objectives and policies related to the maintenance, preservation, improvement, and development of
housing along with an action program to implement these goals, objectives and policies; and
WHEREAS, the City's 1990 Housing Element included several policies that encouraged and
suggested actions to ensure the availability of rental housing, including a policy that required the
monitoring of the availability ofrental housing and, if monitoring disclosed that it was necessary, the
enactment of a condominium-conversion ordinance; and
WHEREAS, in accordance with state housing law, the City adopted its 1999-2006 Housing
Element ("the Current Housing Element") in June 2003, and it was certified by HCD on July 11,2003;
and
WHEREAS, the Current Housing Element eliminated the program that required the monitoring of
the availability of rental housing and potential enactment of condominium-conversion ordinance,
reasoning that there was little likelihood that existing rental housing property owners would convert their
properties to condominiums due to the strong demand for rental housing in Dublin and the development
of condominiums (including 1396 condominium units currently under construction) to satisfy the demand
for condominiums; and
WHEREAS, the Current Housing Element further indicated that the City would assess the need
for a condominium-conversion ordinance each time it updates the Housing Element, if the need arises;
and
WHEREAS, since the adoption ofthe Current Housing Element, conditions in the housing market
have changed markedly, and the Community Development Department has noted that the incidence of
condominium-conversion projects in other communities is increasing; and
WHEREAS, the City of Dublin believes that the following market conditions have led to the
increase in proposals to convert existing multi-family rental projects to condominiums:
a. The higher vacancy rates for apartments as more and more people are able to qualify
for loans for homes due to historically low interest rates;
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ATTACHMENT I
G:IPA#\2004104-û44 Condo Conversion ZOAlccresofintent9-7 -û4.DOC
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b. The increased market for condominiums in the area; and
c. The ability of the property owner to maximize profit by selling units rather than renting
them.
WHEREAS, in the past ten years, the City has developed over 1500 residential apartment units
for an overall total of approximately 2,800 units throughout the City. These units and the other rental
units in the provide a type of housing that is one of the keys to providing for the housing needs of all
economic segments of the community; and
WHEREAS, rental units provide housing for persons in all income levels, and they are a valuable
tool for providing workforce housing; and
WHEREAS, the conversion of one or two of the City's apartment communities could have a
major impact on the City's housing market, in that it would remove fÌ'om the market a significant
percentage ofthe existing rental units; and
WHEREAS, if units are sold rather than rented, the units would no longer be available to a
segment of the community that is not in a position to purchase such units; and
WHEREAS, the loss of these units would likely decrease the vacancy rate and accordingly tend to
increase rents, and this would tend to further exacerbate the City's shortage of affordable rental units; and
WHEREAS, due to these changes in the marketplace and their potential consequences on the
City's ability to provide for the housing needs of all economic segments ofthe community, the
Community Development Department has begun the development of a condominium-conversion
ordinance; and
WHEREAS, the approval of the conversion of existing residential apartment units to
condominiums or other forms of ownership that permit the units to be sold individually, during the period
in which the City is considering the adoption of a condominium-conversion ordinance, could frustrate the
City's efforts at providing for the housing needs of all economic segments of the community, because it
would result in the removal of units fÌ'om the City's inventory of rental units available to those at lower
income levels and because it would tend to increase the rents of those rental units that remain; and
WHEREAS, to prevent these goals fÌ'om being frustrated, the City desires initiate proceedings to
adopt a condominium-conversion ordinance and desires to place potential subdividers on notice pursuant
to Government Code section 66474.2 of the City's intent to adopt a condominium-conversion ordinance,
the effect of which will be to permit the City to apply the condominium-conversion ordinance if it is in
effect on the date the City approves or disapproves the tentative map.
NOW THEREFORE, THE CITY COUNCIL RESOLVES AS FOLLOWS:
A. Initiation of Study of Potential Adoption of Condominium-Conversion Ordinance.
Staff is hereby directed to study the potential adoption of a condominium-conversion ordinance and, if
deemed necessary due to existing conditions in the City and the marketplace, present such an ordinance to
the Planning Commission and City Council for potential adoption in the manner required by law. This
resolution shall constitute, under subdivision (b) of section 66474.2 of the Government Code, the
2
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initiation of proceedings to adopt an ordinance that regulates, restricts, or prohibits the conversion of
existing residential apartment units held in a single ownership, in whatever form, to condominiums or
other forms of ownership that permit the units to be sold individually.
B. Notification to Subdividers of Intent to Apply Condominium-Conversion Ordinance.
Notwithstanding subdivision (a) of section 66474.2 of the Government Code, the City intends to apply the
condominium-conversion ordinance adopted as a result of the proceedings initiated by this Resolution to
all applications for approval oftentative maps and vesting tentative maps that have not been deemed
complete as of the date of this Resolution.
C. Compliance with California Environmental Quality Act. This ordinance is not a
"project" within the meaning of Section 15378 of the State CEQA Guidelines, because it has no potential
for resulting in physical change in the environment, directly or ultimately.
D. Severability. If any provision of this ordinance or the application thereof to any person or
circumstance is held invalid, the remainder of the ordinance, including the application of such part or
provision to other persons or circumstances shall not be affected thereby and shall continue in full force
and effect. To this end, provisions of this ordinance are severable. The City Council hereby declares that
it would have passed each section, subsection, subdivision, paragraph, sentence, clause, or phrase hereof
irrespective of the fact that anyone or more sections, subsections, subdivisions, paragraphs, sentences,
clauses, or phrases be held unconstitutional, invalid, or unenforceable.
PASSED, APPROVED and ADOPTED this 7th day of September 2004.
AYES:
NOES:
ABSENT:
ABSTAIN:
Mayor
City Clerk
3
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CITY OF DUBLIN
100 Civic Plaza, Dublin, California 94568
Website: http://www.cLdublin.ca.us
NOTICE OF PUBLIC HEARING
The City of Dublin City Council will hold a public hearing and take action on the following project:
PROJECT:
P A 04-044 Amendment to the Dublin Municipal Code
PROJECT DESCRIPTION:
Resolution Initiating Proceedings to Adopt an Ordinance Regulating the Conversion
of Existing Apartments in the City to Condominiums. The specific content of the
Ordinance that will be eventually proposed to City Council is presently unknown. A
proposed ordinance will be drafted after thorough study of the issue by the
Community Development Department and by other City departments. At present, it
is anticipated that the Ordinance would regulate, restrict, and, in some cases, prohibit
the conversion of existing residential apartment units held in a single ownership, in
whatever fonn, to condominiums or other fonns of ownership that pennit the units to
be sold individually.
LOCATION:
Citywide
ENVIRONMENTAL
REVIEW:
This project has been found to be Exempt from the California Environmental Quality
Act (CEQA) pursuant to Section 15061(b)(3).
APPLICANT:
City of Dublin
PUBLIC HEARING:
A public hearing will be held before the City Council on Tuesday, September 7,2004 at 7:00 pm in the City Council
Chambers, 100 Civic Plaza, Dublin. Any interested person may appear and be heard on this matter. If you challenge the
above-described action in court, you may be limited to raising only those issues you or other persons raised at the public
hearing described in this notice, or in written correspondence delivered to the City of Dublin at, or prior to, the public
hearing.
The proposed project is available for review at the City Office, 100 Civic Plaza, Dublin, California. If you have any
questions or comments, please contact the Community Development Department at (925) 833-6610.
Jeri Ram, AICP
Planning Manager
Dated: August 25, 2004
Published: August 28, 2004
ATTACHMENT J-.
Area Code (925) . City Manager 833-6650 . City Council 833-6650 . Personnel 833-6605 . Economic Development 833-6650
Finance 833-6640' Public Works/Engineering 833-6630· Parks & Community Services 833-6645' Police 833-6670
Planning/Code Enforcement 833-6610 . Building Inspection 833-6620 . Fire Prevention Bureau 833-6606
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CITY OF DUBLIN GENERAL PLAN
HOUSING ELEMENT
ADO P TED B Y:
THE CITY COUNCIL
FEBRUARY 11, 1985
REV I SED B Y:
THE CITY COUNCIL
JUNE 11, 1990
The Housing Element is a revision of Volume 6
of the General Plan as adopted by the
city Council on February 11, 1985
ATTACHMENT ")
Policy Objective:
Quantified
Objective:
Action Undertaken:
Actions to be
Undertaken:
Financing:
Implementing
Responsibility:
Time Frame:
GtifJq
Encourage development of affordable
housing by private organizations not
primarily engaged in housing
construction or management
90 units (affordable to low and
moderate income households)
Inclusion of "Semi-public use"
definition in the General Plan that
allows housing
Contact owners of semi-public
property to inform them of this
policy; and grant additional
incentives such as reduced site
design standards, priority processing
and fee reductions
Minor administrative cost to City (A)
Planning Department
1991 (adopt incentives) and 1992
(contact owners)
E. Require a percentage of units in large mUlti-family
projects (i.e., projects with more than 10 units) be
rented for a specified period of time. The difficulties
of first-time home buying make rental units the only
affordable housing for many moderate income households
that do not have the assets to make a down-payment on a
home. Other households may chose to rent for other
reasons.
policy Objective:
Action Needed:
Financing:
Insure availability of rental units
in Dublin
Require that a minimum of 10% of the
units in large multi-family projects
be maintained as rental units for a
period of five years.
No cost to City
55
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Financing:
Housing Authority fund and minor
administrative cost to City (A and D)
Implementation
Responsibility:
Housing Authority and Planning
Department
Time frame:
Ongoing implementation
I. Monitor Availability of Rental Housing. If deemed
necessary, consider enactment of condominium conversion
ordinance. Only one condominium conversion project has
been approved by the City. The developer did not follow
through with implementation of the project.
Policy Objective:
Assist in maintaining rental stock
as housing affordable to moderate
income Dublin households
Actions to be
Undertaken:
After an application for a
condominium conversion is received by
the City, evaluate the City-wide
rental vacancy rate; pass a
condominium conversion ordinance, if
necessary
Financing:
Minor administrative cost to City (A)
Implementation
Responsibility:
Planning Department
Time Frame:
Ongoing implementation
J. Require evidence of developer effort to receive public
financial assistance for purpose of including below
market rate units in proposed projects¡ and assist
developers in obtaining information on available
programs. The range of available state and federal
programs designed to increase housing affordability
varies from year to year. To insure that developers are
participating in appropriate programs when possible, the
City will require evidence that developers of multi-
family housing have investigated program availability and
are using available assistance whenever possible. To
reduce the burden on developers created by this
requirement, the City will prepare a packet of
information on available programs, including a list of
agency contact persons responsible for program
implementation. This information will be given to
developers as early as possible in the project approval
process. This requirement will apply only to developers
of projects that contain 75 or more multi-family units.
58
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Housing Element
(1999-2006)
Adopted by the Dublin City Council on June 3, 2003
Resolution No. 113-03
(Approval of Housing Element)
Resolution No. 114-03
(Adoption of Negative Declaration)
Certified by the State Department of Housing and Community Development July 11, 2003
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ATTACHMENT <../
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CITY OF DUBLIN
HOUSING ELEMENT (1999-2006)
1. Monitor availability of rental housing. If deemed necessary, consider enactment of the
condominium conversion ordinance. The City has approved only one condominium
conversion project. The developer did not follow through with implementation of the project.
Policy Objectives:
Actions to be
Undertaken:
Financing:
.Implementation
Responsibility:
Time Frame:
Achievements:
Assist in maintaining rental stock as housing affordable to moderate~income
Dublin households
After an application for a condominium conversion is received by the City,
evaluate the City-wide rental vacancy rate; pass a condominium conversion
ordinance, if necessary
Minor administrative cost to the City
Community Development Department
Ongoing implementation
A condominium conversion ordinance was never adopted because the City does
not believe that there is a current need for such an ordinance. There is little
likelihood that existing rental housing property owners will convert their
properties to condominiums due to the strong demand for rental housing in
Dublin and the development of condominiums to satisfy the demand for this type
of housing.
There are currently 1,396 condominiums under construction in the City. The
City will assess the need for a condominium conversion ordinance each time it
updates the Housing Element if a need arises.
18