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HomeMy WebLinkAboutResolution 2018-130 N.C.S. 08/06/2018Resolution No. 2018-130 N.C.S. of the City of Petaluma, California RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PETALUMA INCREASING COMMERCIAL DEVELOPMENT HOUSING LINKAGE FEES FOR NONRESIDENTIAL DEVELOPMENT PROJECTS PURSUANT TO PETALUMA MUNICIPAL CODE SECTION 19.36.040(C) AND REPLACING THE COMMERCIAL LINKAGE FEES SET BY RESOLUTION NO. 2011-071 N.C.S. WHEREAS, on December 15, 2003, the City Council adopted Ordinance No. 2171 N.C.S. implementing a commercial linkage fee for nonresidential projects to mitigate the impact of nonresidential development on the need for affordable housing; and WHEREAS, on May 2, 2011 the City Council adopted Ordinance No. 2403 N.C.S. amending the commercial linkage fee to ensure that it continues to make an adequate financial contribution from new and expanded nonresidential development to the City's affordable housing programs; and WHEREAS, the City's commercial linkage fee program, which is currently codified in Chapter 19.36 entitled "Commercial Development Housing Linkage Fee" ("Housing Linkage Fee") of the Petaluma Municipal Code; and WHEREAS, the Housing Linkage Fee chapter in the Municipal Code provides in Section 19.36.010 that the purpose of the chapter is to implement the goals and objectives of the general plan housing element of the City; mitigate housing impacts caused by new, changed and expanded nonresidential development in the City, and provide affordable housing to people who earn between 80 and 100 percent of area median income; and WHEREAS, the Housing Linkage Fee chapter includes in Section 19.36.020 various findings of the City Council, including findings that the purposes of the chapter include establishing a feasible means by which developers of nonresidential development projects assist in increasing the supply of low and moderate income housing and increasing the supply of housing in proximity to employment centers, and that the chapter is intended to create a rational relationship between the amount of housing need created by the land use and the size of the fee, taking into account the effect of such fee requirements on providing affordable housing opportunities and the economic feasibility of imposing such requirements; and WHEREAS, the Housing Linkage Fee chapter in Section 19.36.040 provides that Housing Linkage Fees shall be established from time to time by resolution of the City Council, and that such fees shall be adjusted annually using the Engineering News Record Construction Cost Index 20 City Average; and WHEREAS, the Housing Linkage Fee chapter in Section 19.36.050 provides that developers of projects subject to Housing Linkage Fees may apply to receive a credit against the fees or a portion thereof if they provide affordable housing through some other means agreeable to the City; and WHEREAS, on May 19, 2008, the City Council approved Resolution No. 2008-085 N.C.S., adopting the City of Petaluma General Plan 2025 ("General Plan"), which contained the City's then -existing housing element; and Resolution No. 2018-130 N.C.S. Page 1 WHEREAS, on June 15, 2009, the City Council approved Resolution No. 2009-094 N.C.S., adopting the Petaluma 2009-2014 Housing Element; and WHEREAS, on December 1, 2014, the City Council approved Resolution No. 2014-190 N.C.S., adopting the Petaluma 2015-2023 Housing Element; and WHEREAS, on January 23, 2015, the state Housing and Community Development Department ("HCD") approved the 2015-2023 Housing Element as approved by the City Council; and WHEREAS, on November 2, 2015 the City Council approved Resolution No. 2015-171 N.C.S., adopting a First Amendment to the 2015-2023 Housing Element Program 4.3 to ensure consistency between the City's Housing Element and the holding in Palmer/Sixth Street Properties, L.P. v. City of Los Angeles, (2009) 175 CA 4" 1396, which held that the Costa - Hawkins Act, Civil Code section 1954.53(a), prohibits local agencies from requiring on-site inclusionary housing in rental housing developments; and WHEREAS, recent amendments to the state Planning and Zoning Law, which is codified in Government Code section 65000 and following ("Planning Law") pursuant to AB -1505, which took effect January 1, 2018 and is codified in Government Code sections 65850 and 65850.1, permit cities to adopt ordinances requiring inclusion of affordable residential units for moderate, low, very low, and extremely low income households in rental housing developments, and require that such ordinances provide alternate means of compliance that may include, but are not limited to, in -lieu fees, land dedication, off-site construction, or acquisition and rehabilitation of existing units, and grant HCD the authority to review certain such ordinances that require more than 15 percent of the total number of units in a residential rental development to be affordable to households earning 80 percent or less of area median income; and. WHEREAS, the 2015-2023 Housing Element as amended identifies and analyzes existing and projected housing needs and states goals and policies, and quantifies objectives and special programs for the reservation, improvement and development of housing in the City from 2015 through 2023; and WHEREAS, Policy 4.2 of the 2015-2023 Housing Element currently provides for assigning a share of the responsibility for providing affordable housing to the developers of market -rate housing and non-residential projects; and WHEREAS, Program 4.3 of the 2015-2023 Housing Element currently provides for continuing to require residential projects of five or more units to contribute to provision of below-market rate housing by: dedicating 15% of the units on-site or a portion of the project site or property to the City or a non-profit organization for use as affordable housing; encouraging developers of projects within a half -mile radius of the planned Sonoma Marin Area Rail Transit District ("SMART") stations to provide at least 15 percent of the units in a rental housing project at rents affordable to very low and low income households for a minimum period of 30 years; requiring developers of for sale projects within a half -mile radius of the planned SMART stations to provide at least 15% of the units at prices affordable to low and moderate income households for a minimum period of 30 years; or by making an in -lieu payment to the City's housing fund; or by using alternative methods to meet the intent of the inclusionary requirement, subject to approval by the City Council; and WHEREAS, the City has 2,161 housing units in various stages of development but only 75 of the units are affordable in accordance with the City's inclusionary housing requirements; and Resolution No. 2018-130 N.C.S. Page 2 WHEREAS, in -lieu fees collected by the City in accordance with Program 4.3 of the 2015-2023 Housing Element are insufficient to fund construction of sufficient numbers of affordable housing units to meet the City's projected housing needs; and WHEREAS, the City contracted with Economic and Planning Systems (EPS) to complete studies ("EPS Studies") to identify funds the City could lawfully recover from inclusionary housing in -lieu fees and to provide information and analysis in support of potential updates to the City's affordable housing fees; and, WHEREAS, at a City Council workshop on September 25, 2017, EPS gave an Affordable Housing Fees presentation ("Presentation"), presented an administrative draft memorandum ("Memorandum"), and a draft Ownership Inclusionary Housing In -lieu Fee report, a draft Nexus -Based Affordable Housing Fee Analysis for Ownership Housing report, a draft Nexus -Based Affordable Housing Fee Analysis for Rental Housing report, and a draft Commercial Linkage Fee Nexus Study report all dated August 29, 2017 and all referred to as the "Reports," and WHEREAS, the Presentation, Memorandum and the Reports, detailed a gap between market prices of housing in the City and prices affordable to very low, low, and moderate - income households, and included a proposed per square foot in -lieu fee for rental and ownership projects based on the affordability gap; and WHEREAS, the City Council hereby approves the Presentation, Memorandum and the Reports, which are by this reference hereby made a part of this resolution; and WHEREAS, the City Council desires to adopt updated Commercial Linkage Fees for nonresidential development projects as authorized by section 19.36.040(C) of the Municipal Code such that the fees do not exceed the amounts needed to mitigate the actual affordable housing impacts attributable to the nonresidential development projects to which the fees relate, as determined by the EPS report, and so that such projects increase the supply of low and moderate income housing and housing in proximity to employment centers in the City; and WHEREAS, in accordance with the holding of the California Supreme Court in California Building Association v. City of San Jose, (2015) 61 Cal. 4th 435, where a city adopts an inclusionary ordinance to mitigate the effects of development on the City's stock of affordable housing, and to increase the number of affordable units in the city, and to distribute the affordable units throughout the city to obtain the benefits of economically diverse communities, such an ordinance is a valid local land use regulation and not a taking if it is reasonably related to the broad general welfare purposes for which it is enacted, and offers reasonable alternative means of satisfying the ordinance's inclusionary objectives; and WHEREAS, the City Council finds that this resolution and the Housing Linkage fee it establishes is a valid local land use regulation and does not effect a taking in accordance with California Building Association; and WHEREAS, this resolution and the Housing Linkage Fees it establishes are exempt from environmental review under the general rule Section 15061(b)(3) of the California Environmental Quality Act ("CEQA") Guidelines because CEQA applies only to projects that have the potential for causing a significant effect on the environment, and it can be seen with certainty that there is no possibility that this resolution and the Housing Linkage Fees it establishes creates changes in the physical environment, or results in any changes to the General Plan or Implementing Zoning Ordinance land use policies, and any development that occurs in the future subject to such standards will undergo an independent analysis pursuant to the requirements of CEQA; and Resolution No. 2018-130 N.C.S. Page 3 WHEREAS, this resolution and the inclusionary Housing Linkage Fees it establishes is statutorily exempt pursuant to Section 15283 of the CEQA Guidelines because this resolution and the Housing Linkage Fees reflect determinations by the City regarding the need to adequately provide for the City's share of regional housing needs pursuant to Government Code section 65584; NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Petaluma as follows: 1. The above recitals are hereby declared to be true and correct and are incorporated into the resolution as findings of the City Council of the City of Petaluma. 2. The following Housing Linkage Fees shall apply to non-residential projects subject to this resolution in accordance with Policy 4.2 and Program 4.3 of the 2015-2023 Housing Element: 3. Housing Linkage Fees authorized pursuant to this resolution shall be paid and collected on behalf of the City at the time of issuance of a certificate of occupancy. 4. The Housing Linkage Fees established pursuant to Resolution No. 2011-071 N.C.S. and any other previously -enacted commercial development Housing Linkage Fees are hereby repealed on the date this resolution takes effect. 5. If any section, subsection, sentence, clause, phrase or word of this resolution is for any reason held to be unconstitutional, unlawful, or otherwise invalid by a court of competent jurisdiction or preempted by state legislation, such decision or legislation shall not affect the validity of the remaining portions of this resolution. The City Council of the City of Petaluma hereby declares that it would have passed and adopted this resolution and each and all provisions thereof irrespective of the fact that any one or more of said provisions be declared unconstitutional, unlawful, or otherwise invalid. 6. This resolution shall become effective upon its adoption. Under the power and authority conferred upon this Council by the Charter of said City. REFERENCE: I hereby certify the foregoing Resolution was introduced and adopted by the Ap rgycd as to Council of the City of Petaluma at a Regular meeting on the 61h day of August 2018, form: by the following vote: psi : ~City A rney AYES: Albertson, Barrett, Mayor Glass, Vice Mayor Healy, King, Miller NOES: None ABSENT: Kearney ABSTAIN: None ATTEST: a" City Clerk Mayor Resolution No. 2018-130 N.C.S. Page 4 Office/Commercial Retail Industrial $2.84/ s.f. $4.91/s.f. $2.93/s.f. 3. Housing Linkage Fees authorized pursuant to this resolution shall be paid and collected on behalf of the City at the time of issuance of a certificate of occupancy. 4. The Housing Linkage Fees established pursuant to Resolution No. 2011-071 N.C.S. and any other previously -enacted commercial development Housing Linkage Fees are hereby repealed on the date this resolution takes effect. 5. If any section, subsection, sentence, clause, phrase or word of this resolution is for any reason held to be unconstitutional, unlawful, or otherwise invalid by a court of competent jurisdiction or preempted by state legislation, such decision or legislation shall not affect the validity of the remaining portions of this resolution. The City Council of the City of Petaluma hereby declares that it would have passed and adopted this resolution and each and all provisions thereof irrespective of the fact that any one or more of said provisions be declared unconstitutional, unlawful, or otherwise invalid. 6. This resolution shall become effective upon its adoption. Under the power and authority conferred upon this Council by the Charter of said City. REFERENCE: I hereby certify the foregoing Resolution was introduced and adopted by the Ap rgycd as to Council of the City of Petaluma at a Regular meeting on the 61h day of August 2018, form: by the following vote: psi : ~City A rney AYES: Albertson, Barrett, Mayor Glass, Vice Mayor Healy, King, Miller NOES: None ABSENT: Kearney ABSTAIN: None ATTEST: a" City Clerk Mayor Resolution No. 2018-130 N.C.S. Page 4