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6.F. - Page 2 of 6 In September of 2017, Governor Brown signed AB 1505 which superseded the Palmer case and allowed cities and counties to require on-site construction of affordable rental housing (also called "inclusionary" housing). Therefore, in 2018, the City established the Affordable Housing Ordinance (Article 29 of the Zoning Ordinance) in order to strengthen and consolidate its inclusionary housing policies and programs. The Affordable Housing Ordinance applies to both residential and nonresidential development. Large residential developments (20 units or more) are required to provide affordable housing units onsite. More specifically, the Affordable Housing Ordinance requires large rental projects to provide 20% affordable units, of which 10% must be set aside for moderate -income households, 5% for low-income households and 5% for very low-income households. Large ownership projects are required to provide 15% of its units for moderate -income households. Small residential developments (5 to 19 units) and nonresidential development are subject to the affordable housing impact fee established by Resolution No. 15462 in December 2015 ("Affordable Housing Impact Fee Resolution"). In addition, the Affordable Housing Ordinance allows for developers of residential or nonresidential development programs to propose an alternative mitigation program, such as the provision of off-site affordable units, donation of land for the construction of affordable units, or purchase of existing units for conversion to affordable units. Staff has identified several components within the Affordable Housing Ordinance and Affordable Housing Impact Fee Resolution that require additional clarity, including fee calculation clarifications, allowable updates to existing fees, and additional flexibilities for alternative means of compliance. In addition, staff found that other jurisdictions with inclusionary housing requirements have also incorporated local live/work preference policies in an effort to protect residents and workers from displacement. As an anti -displacement strategy, staff is proposing the City consider amending the Affordable Housing Ordinance to include a local preference that would give a preference to current and former residents and current workers, who meet eligibility requirements, when applying for affordable units. Park Impact Fee/Park In Lieu Fee/Commercial Park Impact Fee On October 22, 2007, the City Council enacted the Parks Impact Fee Ordinance (Article XVI of Chapter 18 of the Municipal Code) establishing the Parks Impact Fee on residential developments (apartments). At the same time, Council approved the "Quimby Act Implementation Ordinance" (Chapter 30 of the Municipal Code) that requires the dedication of land or payment of fees in lieu as a condition of approval of a tentative or final subdivision map or parcel map (townhome/single family home developments). These fees are intended to augment recreational opportunities through the addition of parkland to maintain the City's established ratio of parkland per capita and improvement of parks in order to compensate for increased demand. This is brought about by new development and the associated increase in population. At the time of adoption for the new ordinance, the City Council established the Park Impact Fee at 50% of the maximum calculated rate. In setting the rate, the City Council considered the conditions in the economy at that time and whether a higher fee would discourage development. The City Council decided to limit the fees to residential developments and not apply the fee to commercial developments. The Ordinances established a formula to calculate the yearly adjustment to the fees, however, it only considered the cost of construction and did not include increases to land value. To date, we have received just under $25M for Park Impact Fees, and just under $3M for Quimby Act Fees. Page 2 of 6 S11 City of Redwood City 1017 Middlefield Road, Redwood City, CA. 94063 Tel: 650-780-7000 www.redwoodcity.org 145