AGENDA PACKET - Laserfiche WebLink

Staff recommends the fee for both detached single-family and townhome developments be set at $45.57 per square foot, which is the maximum feasible rate for townhomes. While this is slightly above the equivalent cost calculation for the 15% inclusionary rate, it can be justified since it would also apply to single-family homes, as a blended rate that factors in the higher justifiable per square foot rate for single-family homes. For detached single-family homes, the recommended rate reflects a significant increase over the current rate but is less than the full amount that could be justified based on the inclusionary requirements; it is also well within the limits of feasibility. The following considerations support this recommendation:  There are very few remaining low-density, detached single-family projects remaining to be built that will be subject to the IZO (see Table 4). Even if those projects are permitted to pay in-lieu fees, it will not have a significant impact on the number of inclusionary units produced.  Remaining single-family sites subject to the IZO are likely to propose meeting their on-site inclusionary requirements with smaller or clustered units (e.g., duets or attached units); the fee rate is more commensurate with this cost to build/deed restrict smaller townhome style units.  The majority of remaining single-family homes to be built are small-scale (less than 10 units) projects and, in many cases, will be single-unit projects built by individual homeowners. The lower rate will reduce the financial burden on these small projects/owners.  As shown in Table 5, below, the rate is similar to at least some of the peer cities surveyed, including Fremont ($44.00/square foot) and Livermore ($39.94/square foot). However, it is higher than some others including Dublin, San Ramon, and Walnut Creek (which range from $15.00 to $21.86/square foot).  Keeping the rate somewhat lower in the Single-Family Residential category will provide capacity for the City to consider increases in other development impact fees, such as the Capital Facilities and Traffic Impact Fees. 2. Rental Projects EPS modeled two alternative scenarios for multi-family/rental apartment projects: 1) Retain the existing 15% inclusionary rate; and 2) Reduce the rate to 10%. The 10% alternative was modeled in light of the poor current market conditions with respect to rental housing, and the theory that reducing the inclusionary rate could help to incentivize construction of higher- density housing types more generally. In both scenarios, units are recommended to be restricted to a maximum of 60% AMI, which is within the low-income category. Page 9 of 40