AgdaPkt 2018-05-21 Joint SA PFA - Laserfiche WebLink

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the State’s provisions allow concessions from local development standards and provides developers with incentives to create more affordable units. Concessions can include additional building height, reductions in setbacks, and reductions in parking. The proposed amendments to the City’s density bonus ordinance will bring our code into compliance with the State’s density bonus provisions and will help developers understand the local submittal requirements and concessions that may be considered without additional financial analysis. Staff is also recommending that the Affordable Housing Impact Fee ordinance in the Municipal Code be incorporated into the new Article 29 of the Zoning Ordinance and revised as further described below to ensure consistency in affordable unit requirements. Finally, staff is proposing a resolution with a new affordable housing in- lieu fee. The fee would apply where the calculation of required on-site affordable units results in a fraction, or as an alternative for projects that do not provide on-site units and with an average unit size of 2,000 square feet or four bedrooms. ANALYSIS There are benefits and drawbacks to requiring on-site affordable units through an inclusionary ordinance rather than payment of an affordable housing impact fee. The benefits are significant. Affordable units in market-rate developments can be constructed more quickly than nonprofit affordable units, which require more time for financing. In addition, construction of affordable units throughout different neighborhoods can meet a wider array of housing needs than concentrating a larger number of units in one development as a traditional 100 percent affordable project. The presence of affordable units within each residential project provides more opportunities for residents to remain in the community. The drawbacks relate to how an inclusionary requirement can increase the costs of development and potentially reduce residential construction. The goal of an inclusionary requirement is to produce additional affordable housing. This goal is unachievable if increased construction costs due to the inclusionary requirement are too high and discourage residential development. Another potential drawback of onsite units versus a fee is that it reduces City funds that can be used for other affordable housing projects, such as the recently approved Bradford Street project (117 very low-income senior units). This type of project is possible when the City has funds to contribute to a housing nonprofit’s project. Lastly, an inclusionary ordinance can require significant administration to ensure that small numbers of affordable units across multiple projects are rented or owned by qualified residents. 7.A. - Page 4