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

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8.C. - Page 3 Two recently-proposed residential projects have included affordable units. Both developments were submitted subsequent to the City's affordable housing impact fee adoption. These developments are: • 1375 El Camino Real (Greystar 4): This development proposes a total of 346 units, including 35 units affordable to "low" income households. No City funding would be required to develop the affordable units. The developer would also pay a partial impact fee, because the impact fee ordinance states that 43 units (12.5% of all units) would need to be provided in order to fully offset impact of market rate units. • 801 Brewster Avenue (Anton Development): This development proposes a total of 250 units, including 50 units affordable to "very low" income households. No City funding would be required to develop the affordable units. There are also two 100% affordable developments pending consideration: • 612 Jefferson (Habitat for Humanity): Habitat for Humanity is proposing 20 ownership units affordable to "low" income households. This development has required about $1 .9 million in City funding to date, as well as funding from a number of other sources. • Bradford Site: The City Council recently awarded the City-owned Bradford site to MidPen Development for the development of 108 unit affordable to "very low" income households. This development will require the dedication of City owned land valued at $12 million, in addition to funding from other sources. If all of the housing units currently approved or proposed were to be constructed, and if 15% of all housing units allowed under the Downtown Precise Plan were required to be affordable, a total of 375 affordable units would be constructed (15% of 2,500 total housing units). Approving this requirement would provide certainty to project applicants, which is important in light of the longer funding timeframes required for affordable housing projects compared to market-rate housing projects. Planning Commission Review: At their hearing of January 19, 2016, the Planning Commission recommended reserving for affordable housing 20 percent (500 units) of the total housing units allowed under the cap (See Attachment 2, Resolution and Attachment 3, Minutes). This recommendation was based on community concerns about the lack of affordable housing and the desire to ensure a larger supply of units. However, this direction was given prior to the submittal of the two mixed income developments noted above. The Planning Commission discussion also did not include any analysis on financial challenges associated with the development of affordable housing. If this higher percentage were adopted, the pending 801 Brewster project with mixed-income units would not be allowed to move forward (the Greystar Development noted above was submitted several months before the 801 Brewster project), as the market-rate units would exceed the cap by 198 units.