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Page 6 of 12 City of Redwood City 1017 Middlefield Road, Redwood City, CA. 94063 Tel: 650-780-7000 www.redwoodcity.org Table 2: Entitled Residential Projects Eligible for 25% Affordable Housing Reduction Site Address Total Units Affordabl e Units5 Affordabl e Units After 25% Reduction Difference in Affordabl e Units Original Estimated Impact Fee Impact Fee After 25% Reduction Difference in Impact Fee Small Developments (5-19 units) 77 Birch 9 N/A N/A N/A $564,275 $423,206 ($141,069) 2336 El Camino Real 6 N/A N/A N/A $319,598 $239,699 ($79,899) Fee Subtotal $883,873 $662,905 ($220,968) Large Developments (20+ units) 557 E. Bayshore6 480 85 74 (11)N/A N/A N/A 590 Veterans 95 10 8 (2)N/A N/A N/A 1201 Main7 32 4 3 (1)$2,345,149 $2,331,540 ($13,609) 1330 El Camino 130 26 20 (6)N/A N/A N/A 1601 El Camino (Elco Yards)8 501 109 82 (27)N/A N/A N/A Total 1,253 234 187 (47)$3,229,022 $2,994,445 ($234,577) Rationale for Staff Recommendation In the current economic climate, it is unlikely that any of the projects listed above will proceed in the near term. This would make it far more difficult for the City to meet the City’s assigned RHNA goals which are tied to units for which building permits have been issued. As shown in Table 2 above, if the Affordable Housing Incentive Program is approved, up to 187 affordable units could be produced, approximately 47 fewer deed-restricted units than would theoretically be produced under the ordinance if market conditions were more favorable. Staff does not take this potential loss of affordable units lightly, but offers the following rationale for why the City Council should consider approving the program: 1.Lower Obligation Increases Likelihood of Construction and Robust Pipeline Helps Offset Lower Obligation: The City’s pipeline of affordable housing is robust, with nearly 1,000 deed-restricted units already in progress. As a result, there are multiple projects expected to help offset the potential loss of the 47 affordable units. Additionally, as noted above, only units for which building permits have been issued (versus approved units) would count toward the City’s RHNA goals. 5 The City’s AHO requirements of 20% total affordable for rental and 15% for ownership are calculated off the project’s base density. 6 557 E. Bayshore has already pulled building permits for Building A (222 units including 40 affordable units). The 25% reduction shown is for Building B only (258 units including 45 affordable units) 7 Fee includes a fractional unit in-lieu fee ($54,435) and a housing impact fee for the nonresidential portion of the project ($2,345,149). The fee reduction would only apply to the fractional unit payment. 8 The 39 units in Parcel F (1304 El Camino) of the Elco Yards project are already constructed and not included in these totals. 10.A. - Page 6 of 31 215