PC 06/10/1998 - Laserfiche WebLink

in which loans are provided by the City and a private bank to purchase homes. The City has also entered into a lazge number of second mortgages. Mr. Bocian explained that the primary reason for the fee increase is based on the significant increase (57%) in the gap between affordable housing and market-rate housing on the rental segment, which consequently increased the amount of money needed to fill that gap. The Affordable Housing Commission and City staff made a determination to use the methodology developed and adopted in 1990 and opted for a fixed fee rather than a variable one. Staff analysis shows that the total gap for residential and commercial sectors between the present and buildout is a little over $15 million. The City is anticipating 5,415 new units of which 15% will be affordable. Developers can opt to either build the units or pay the lower-income housing fee. Mr. Bocian stated that the City is not recommending any adjustment for the commercial fee because the methodology used would decrease the fee. The reason for this reduction is because in 1990, the assumption was that the commercial sector would cover larger portion of the total revenue and a lower squaze footage: 11 million squaze feet in 1990 versus 12 million squaze feet today. On the other hand, the residential fee is being increased because the 1990 analysis assumed that there would be 7,600 units paying these fees versus only 4,600 units today. The assumption that the residential community has a clear responsibility to build new homes is consistent with General Plan. While the analysis justifies an increase raise beyond the proposed amount, staff believes that 30% represents a significant advancement in meeting the City's lower-income housing needs. The Affordable Housing Division, the Affordable Housing Commission, and the fee increase will assist the City in attaining its goal as it - continues to look for other funding resources. Mr. Bocian concluded by requesting the Planning Commission to approve the recommended increase in the affordable housing fee. Commissioner Kumazan commended the efforts of the Affordable Housing Commission and staff and expressed his support for the increase. He requested Mr. Bocian to explain how staff arrived at 20% as the percentage of future affordable housing that will be developed without financial assistance from the City. Mr. Bocian replied that the number is an estimate based on the fact that the City now has administrative procedures and a commission in place to work aggressively and utilize several mortgage programs and partnerships with private lender to arrive at affordable housing without requiring the payment of a fee or the need for direct subsidy from City. Commissioner Kumazan stated that the C/OR rate could be increased to some extent if it is perceived as an opportunity cost. Building C/O/I would result in a cost requirement for more affordable housing in terms of jobs created as a consequence of their being there. Commissioner Roberts agreed that the need for affordable housing is generated primarily by retail. Mr. Bocian indicated that while the study indicates that individuals working in the retail sector have a significant need for affordable housing, it is difficult to make that direct assumption. In addition, the commercial sector may come back and say that by creating jobs and opportunities for employment, they are making a significant contribution to society. Planning Commission Minutes Page 16 June 10, 1998