_Minutes_February 9, 2022 - Laserfiche WebLink

Council's policy decision to set the fee lower than the maximum allowable fee. She stated the Council considered the cost to develop in Pleasanton compared to other communities. Commissioner Morgan noted that some communities restricted the ability for projects to pay in- lieu fees instead of building affordable units and asked if staff was proposing that be at the Council's discretion. Ms. Clark stated State law required alternative means for compliance for developers with respect to payment of in-lieu fees, but the existing ordinance provides discretion as to whether in-lieu is permitted, for any project. Ms. Harryman provided an example of using in-lieu fees, such as when the on-site affordable housing would be located far from transportation and amenities. Commissioner Morgan asked if staff was recommending the Council have full discretion to allow in-lieu fees. Ms. Clark stated the Council could grant alternative compliance methods including in-lieu fees. Commissioner Nibert stated he found the in-lieu fees for nonresidential projects to be very low and questioned whether raising the fees would have an impact in deterring developers away to other cities with lower fees. Ms. Clark stated it was a policy decision and she discussed the current fees compared to what could be charged, indicating there was room to increase fees without handicapping development. Commissioner Nibert requested clarification on where current lower income housing funds (LIHF) fees were utilized. Ms. Clark confirmed that the majority was spent to provide loans and other funding to help facilitate affordable housing projects, and another proportion on programs. Mr. Hernandez discussed recent projects utilizing LIHF. Commissioner Nibert asked the percentage of funds used towards loans. Ms. Clark stated staff was unable to conduct a full analysis but information could be brought back to the Planning Commission. Mr. Hernandez stated around $250,000 per year was utilized which was significantly less that the fees received. Commissioner Nibert requested the information be brought back in order to determine if the current process was effective. Ms. Clark suggested the Commission provide its recommendations on desirable affordable housing programs. Commissioner Nibert favored consideration of an affordable housing overlay and referenced the example from Cambridge, Massachusetts. Commissioner Allen stated her questions related to testing the appropriateness of the current residential low income housing fee. She stated it appeared that a five-bedroom luxury home would pay within $1 ,000 of a one-bedroom multifamily unit would be paying. Ms. Clark confirmed that the difference between smaller and larger units was about $1,000. Commissioner Allen asked if there was ever a discussion about thinking about that in a different way because currently single-family luxury homes chose in-lieu fees because it was cheaper than building an affordable home. Ms. Clark explained how the fee range was set based on the Nexus Study including demand generated by new residential and non-residential development and the cost to construct new units. She added that there was room to consider whether the fees were scaled appropriately. Commissioner Allen proposed a hypothetical that the average affordable house would be $800,000 per unit to build, with an inclusionary zoning ordinance (IZO) at 20%, and an in-lieu fee be at one fifth of $800,000. She questioned whether the Commission should be considering a break-even fee so a business person would be equal with building a unit and paying an IZO. Ms. Clark explained the basis for the inclusionary zoning requirement, and the amount of the low-income housing fee were different and therefore, there was a disjuncture between the two fees (i.e. the in-lieu fee does not cover 100 % of the cost of constructing an affordable unit). Planning Commission Minutes Page 3 of 7 February 9, 2022