AgdaPkt 2016-05-23 Closed, Joint SA and PFA

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8.C. - Page 1 REPORT To the Honorable Mayor and City Council From the City Manager May 23, 2016 SUBJECT Amendment to Reserve 15 Percent of Residential Development Allowed Under the Downtown Precise Plan for Affordable Housing RECOMMENDATION Adopt Resolution amending the Downtown Precise Plan to reserve 15 percent of the 2,500 unit (375 units) Residential Maximum Allowable Development for Affordable Housing BACKGROUND The Downtown Precise Plan (DTPP) regulates land use, historic preservation and other development standards for 183 acres within the City's historic center. This plan was established to "orchestrate private and public investment actions in the Downtown." The DTPP was adopted in January 2011. The DTPP land-use category of "Mixed-Use Downtown (MU-D)" establishes the Maximum Allowable Development limitations for residential, office, retail, and hotel space within the DTPP area. The limitation for residential uses is 2,500 units. When the DTPP was adopted, the Downtown was in a Redevelopment area. Per State law, a minimum of 15% of the housing developed within Redevelopment areas was required to be affordable. In order to provide the funds necessary to subsidize affordable housing, 20% of the incremental property tax produced within a Redevelopment area was dedicated to affordable housing. Unfortunately, shortly after the DTPP was adopted, the Governor eliminated Redevelopment, thereby eliminating the expected affordable housing requirement and funding source. On October 26, 2015, the City Council initiated a DTPP amendment to reserve 15% of the 2,500 allowable residential units (for a total of 375 units) for affordable housing. The percentage was chosen to specifically line up with the previous Redevelopment requirement and original DTPP expectation, as well as to protect affordable housing developments that were in the queue. However, the Council also directed staff to consider requiring "deeper" affordability levels than previously required under Redevelopment. It is important to note this would not be a requirement for affordable housing within all developments, but would apply to the overall downtown "development cap".