Okay, if we're all set I think we will start the meeting so I would like to call to order the City of Santa Rosa Housing Authority regular meeting for August 26, 2019 and we will start with a roll call please Sarah or Karen we have a new person who will be introduced here by maybe I've already done that. Chair Burke. Hi, here. Commissioner Downey. Vice Chair Johnson Morgan. Here. Commissioner Olsen. Here. Commissioner Owen. Here. Commissioner Test. Here. Let the record reflect that all commissioners are present. Thank you. The is there a need for state or for an abstention on the part of any member of the Housing Authority Board for any item on the agenda today? If there isn't an Oceany then we will move to the first of three study sessions and I just like to say for the public that wishes to make comments the plan would be to go through each of these study sessions allow for discussion on the part of the Housing Authority and then at the end we will have time to for public comment so we'll just do that item by item. So we'll start off with the first item which is the housing allocation plan ordinance update and commercial linkage fee and I know this is a can't be a fairly lengthy presentation and the objective will be to get kind of a handle around the options for changes to the existing ordinance and then pass those along to the city council who will actually be having a study session tomorrow so with that let you introduce yourself and presentation. Okay thank you very much my name is Jessica Jones I am the supervising planner in our advanced planning division here at the city I'm going to be starting off the presentation going over a little bit of background and then I'm going to hand it over to Andy Gustafson who is our senior planner who's been the project manager for this process we also will be hearing from Raisa de la Rosa regarding the second portion of this which I'll mention in a moment and then we have our consultants who have been helping us through this process here to help answer any questions that you may have. So just to get us started we are here to talk about the inclusionary and affordable housing production here in Santa Rosa through our inclusionary housing ordinance which is also known as the housing allocation plan we are also going to be talking about a commercial impact commercial linkage impact fee and the second portion of this. So just to quickly let you know what the kind of the project schedule and where we've been with this process we kicked the process off through some initial community engagement and research in September and December of 2017 with a number of projects going through the process as well as impacts from the the fires we this project got put on hold for a little bit of time so we came back and started working on this towards the beginning of 2019 in July of this year a white paper was produced which includes recommendations and suggestions for potential updates to our ordinance that was based on a financial feasibility analysis that was produced by one of our consulting firms and so that white paper is available on our website it's also I believe included in your packet today we held community and stakeholder workshops in early this month and then we went to the Planning Commission on August 8th with the same presentation to receive their feedback as we move through this process typically the Planning Commission would be making recommendations to the Council on a proposed ordinance amendment however because the housing allocation plan ordinance does not reside within the zoning code it is just in our city code the Planning Commission does not have recommendation authority so this will be just going straight to the City Council with comments from this board the Planning Commission and the community that we heard so just back real quick so as you did mention we are going to the City Council tomorrow night or tomorrow afternoon again with the same presentation looking for comments from the Council before we start drafting the actual ordinance and then we hope to get to the Council for public hearing for adoption of the ordinance in October on October 1st so as you probably are all aware in our housing action plan which was accepted by the City Council in 2016 one of the programs that was included in that document was to increase inclusionary housing and that was looked at in two separate programs one was through updating the city's inclusionary housing policy as I mentioned was also known as the housing allocation plan ordinance and then also through evaluation of a potential new commercial linkage fee so we also have another number of other tools that we are using right now to help incentivize housing production for all throughout the City of Santa Rosa those include the density bonus ordinance which was recently updated by the Council the Council has also adopted development fee reductions about a year ago we updated our accessory dwelling unit ordinance to really incentivize the production of those smaller units throughout the City we also have been working on our permit streamlining through our development review process we are looking at doing by right development for supportive housing pursuant to state law and then also looking at assemblage and other offer of public land for housing development so there really is a lot going on here in the city to try and incentivize so this inclusionary housing and commercial linkage fee is really just kind of one piece of that puzzle so as I mentioned this is kind of a two-part presentation that we're doing today the first piece is with regard to the inclusionary housing and we'll be going through the various steps that got us here and some options for potential policy updates and how that would be implemented we all we are also looking at the second half of this would be the commercial linkage fee and again this would be a new fee and looking at how that could help us to provide additional housing as well so this slide is showing you the permit activity for residential over the last about 18 years so as you can see in the early 2000s we did have a lot of residential development and then that kind of petered out with the recession we're slowly starting to come back up but as we all know housing is a major issue not only in santa rosa and snow accounting but throughout the state so that's again why we're here so this slide is a very important slide this is looking at our regional housing needs allocation which is the also known as arena and this is the housing requirement that the state places on each jurisdiction the planning period that we are looking at with these numbers is between 2015 and 2023 and so as you can see on this slide we are not meeting our needs we are significantly below but we are moving the scale forward ever so slowly so there's a lot that needs to be done and you know again this this update to our inclusionary housing we really hope will help to incentivize more units of all categories but particularly in our affordable housing units to help make these these numbers and our state requirements go up so this slide is something that you're probably all familiar with this is showing the income categories that we have for very low-low and moderate and the incomes that are required or that that are associated with those categories so the inclusionary housing production and this is kind of showing how this all works so we have for building inclusionary affordable housing units you know what we would get out of that is on-site units that would be incorporated within a residential development that would be provided by the developer and they would identify the size the timing of when that happens and you know how that would ultimately come about with working with the city and it would traditionally be done at a low-income level for the in lieu payment which is an option that we have through our inclusionary our current ordinance it is a payment that is provided to the city which again I'm sure you all are aware of and it helps fund affordable housing throughout the city and we can use the funding that we get through that in lieu payment to leverage additional funds to provide even more housing at both the very low and the low-income level so this is an interesting slide it is showing what what has been accomplished since 1992 here in Santa Rosa so as you can see for the on-site inclusionary development which would be done by the developers as part of that project we have built about 174 units we do have some projects that are have been approved and entitled but not yet built but so what we're looking at right now what's on the ground is a 174 units whereas with a in lieu fee we have been able to leverage that to develop just over 1500 affordable housing units throughout the city so now I'm going to hand it over to Andy Gussison our senior planner and project manager for this project thank you Jessica so the next series of slides will just one question on the consequences of not meeting the goals that have been set by the state through a bag what are the consequences of not meeting those goals that's an excellent question there are numerous consequences there I would say that there are very few jurisdictions throughout the cal throughout California that are meeting their needs one of the consequences we've seen just recently is with the passage of Senate bill 35 which is a requirement for cities that are not meeting their arena needs that we now are required to allow developers to come in if they meet certain criteria to go through our process in a ministerial way so they do they would not receive any sort of design review or any sort of entitlement permit along those lines so it gets them through the process faster and so it those those are some of the consequences that we are seeing as of right now beyond that you know the consequences I would say are low but it's something that is of the utmost importance to everyone in the state so there are new state laws coming down all the time so we it's something that we need to keep very close eye on I think it's some perhaps some lawsuits also that have been filed against some communities particularly in Southern California that I suspect are related to this and I'm not sure yes and that that's correct and under state launder the housing accountability act it does place some potential liability both potential financial liability but but also equally if if projects are denied and we do not have the sites identified to meet Rena the it can be a deemed approved situation for the project applicant but again I would clarify that our responsibility is to identify the sites to take actions that we can to stimulate and encourage housing obviously the city itself is not obligated to build the housing itself so there are some lines that that get drawn there but with the new legislation it does require that we streamline streamline processing yeah and the other thing just quickly to mention is that we have our housing element and that is another piece of this that if we did not have a certified housing element that identified the sites to show that we do have the capacity to meet the Rena needs then we would be in a much different circumstance and there would we would be open to lawsuit but we do have a certified housing element and it is something that we're actually embarking on a general plan update and part of that process will be to update our housing element to make sure that it is meeting all of the state requirements thank you I'm sorry to take that extra time but I think it's important to show kind of the importance of the consequences if we don't as a city do as much as we can to provide sufficient housing thank you thank you so this next section is going to discuss the inclusionary ordinance and and we frame the discussion on some major policy questions that will work through and those are listed here first we're just going to go to the question of should we even have or you know which way should this ordinance go should we demand inclusionary or units to be built on site or should we continue to allow the fee to be paid and it will work through these other more regulatory aspects of the ordinance concerning the style of development and the in lieu fee amount so forth but before we get into that I just wanted to preview with with the authority the comments we received when we went out to the public or stakeholders as well as the Planning Commission here the Commission when they discuss this matter brought up these topics concerning this core idea do we bias the ordinance towards requiring on-site units or do we continue to allow the in lieu fee to be paid and the issues they were bringing up was equitable citywide distribution are these units being located throughout the city or are they relegated to one area or not are we really fostering mixed income projects these two different approaches may do so more or less an important issue that was brought up is how how do we establish neighborhood integration and that is having to do with sort of the land use aspect of having these projects in places with supportive uses schools retail services and that kind of thing and then the issue of for sale versus rental what which product do we want more inclusionary might get you more for sale the in lieu fee might might get you more rental they also talked about their specific ideas about the regulatory requirements that the percentage of inclusionary units the type of affordability in the project and then we did discuss the fee and if you were able to have time to read the white paper a lot of that discussion talked about what kind of a fee we might consider in updating the current ordinance important aspect of this inclusionary ordinance is also flexibility and the in the county planning commission said that it needed to be flexible there was discussion about how current practice to require units that are built off-site which is permissible as a flexibility measure that they be built in the same quadrant but also they said there's an important we might consider allowing affordable units to not be completely dispersed throughout the project meaning all the doors or in a mixed-income project or blended there is discussion also about these other flexibility items so that we get developers to participate and not opt out of our community from building housing altogether then the final final point was that the ordinance was what currently requires a 35-year de-distriction for any allocated unit or that participates in the inclusionary ordinance we want to the ideas to extend it to 55 years which is consistent or harmonious with other regulations including the city's density bonus and and it was agreed that the in lieu feed did need to be updated the stakeholders developers community members that we talked with over a period of time including the workshops earlier this month as well as in preceding conversations with individual developers raised these issues and it came out very strong that affordable housing developers really rely on the in lieu fee it's an important tool for them and their project financing they don't want to see that go away and there was another kind of a technical issue about fractional units when a project density is calculated and there's a fractional unit that the developer be allowed to pay a fee for that proportionate fraction fractional share rather than having it round up to a full unit that was a an important financial consideration the the other had to do with looking at what level of affordability should be a cry excuse me the percentage of affordability that should be required in the project and there we spoke at length about should it be 15% inclusionary or something else and the white paper for the residential feasibility project shows that 15% would be difficult if we continue to require low or very low income households that we would have to reduce the percentage to go that deep and affordability so there was some discussion about is it the affordability appropriate at 15% or should it be less so as not to turn off actual construction of housing in the city additional questions I came up had our concerns came up with land dedication the difficulty of how to assess the value of that to the city when developer gives land it's not entitled plan there are costs with that so it's not really sometimes as much a gift as might be otherwise thought we should go forward with caution on that and then there was some discussion regarding implementation touched upon project dispersion this idea of fully blended projects are very difficult to finance apparently with tax credits and for that reason affordable housing developers sought to seek some flexibility there when financial feasibility of the project was at risk to fulfill that requirement the as I mentioned Jessica mentioned as well there are two studies that underpin today's discussion one is the white paper and the other is a feasibility study that was prepared an economic analysis of what it takes to develop housing here in the city and this is a table showing the prototype residential projects that they looked at when they when the analysis was conducted which includes a typical single family detached single family attached and that should that label should be single family attached town homes that second row that's a smaller type unit and then apartments or they looked at one two and three bedroom units the pricing there was is important because it basically drives a number of issues that will touch upon and we were looking at median or average sales price or rent for for units and here in the Santa Rosa the ultimate outcome of the financial feasibility study was that for a developer to come to this city and commence a project they need to know that at the end of the project they've got about a 15 to an 18 percent return for a single family project on a rental project is structured a little differently it's based on yield return on yield that they expect six to seven percent and that threshold is kind of an important cap to keep in mind when we go through the discussion about options of affordability and percentage as it kind of caps where developers might lose interest in working with the city develop housing the in lieu inclusionary policy is really a tool we use to accomplish objectives and the idea that I wanted to show here is that it's a number of variables or or dials that we get to tune up to accomplish basically two goals one is you know do we want to build units on site we look at affordability type project size and percent affordable and we adjust those to make it work and then the in lieu fee is about at what point do we allow developers in terms of project size pay a fee if we allow it at all so those those factors work together furthermore this idea about development feasibility we need to be able to look at if we're requiring on site development versus we allow for the in lieu fee should those two balance one another out so it's a two true choice for the developer whether to pay the fee or develop that they are financially on parity with one another but yet either path if chosen by the developer would allow a project that returns a reason reasonable amount of profit for the developer to move forward so this sets us up for that first question what is the best approach at this point in time for the city to get residential units built should it should be requiring those units be built on site or should we continue to allow in lieu fees to be paid or is there a combination or blended approach that might be taken so our current practices that we allow the developer to choose whether or not to pay the fee or build and because of our fee structure right now developers virtually all of them will choose to pay that fee rather than build the inclusionary units there are exceptions to that but that's typically what we're seeing the options the what if scenarios are listed there we continue that practice it does give us money for the housing authority to allocate to projects or do we require and then the bulletin items or range of options here do we require the units to be built concurrent with the project so we get the units now are we would we allow payment of an lieu fee with an increased cost or a fee amount or what what is the blended option that would make those two paths on parity with one another we can return if there's immediate comments right now we can return to this or we can address those comments now if you wish just let me know you know the entitlement process the time to construction it varies I really won't be able to provide a meaningful benchmark comparison between the housing authorities approval process but I can tell you the city has taken steps you know to to the point of we have many tools to help promote housing here and one of them is the resilient city code which allows us to expedite the review process for housing projects and it's proven to be successful so it's getting better but I'm still not committing to months thank you question as the city looked at a market rate developer providing land for an affordable housing developer as a contribution rather than paying a fee and what are that the land could be in a different quadrant or a different part of town we there's the I believe you touch on the concept of like credits or or a transfer of of the affordable units to another project that would be one option and we the the white paper discusses that a little bit we don't that that's an option we should consider the other is what we learned from the affordable housing developers is that they often partner with the market rate developer that the two really are working within their separate wheel houses to get the projects done and because affordable housing is such a different universe in terms of financing and management they tend to partner on a project so the developer who has an inclusionary requirement will it will bring typically somebody in and that is been expressed as being a very successful model here in the north bay and our existing ordinance does allow for land dedication in lieu of providing onsite so that is something that we currently have and something that could be explored moving forward with the update seems like there if there was a substantial amount of that partnership there'd be more than 174 units in that category I mean I know that there's been some of that and that was kind of envisioned initially but I don't think I don't think it's happened to the degree that it was expected to yeah other questions comments yes has anyone done any mathematics as far as need versus inventory in other words how many people in the city general the need subsidized housing versus how much subsidized housing is available the well the rena figures in in a sense provides that relationship that describes how many units are needed over the period of time 2015 to 2023 and it describes how many have been we show how many have been permitted so we don't I don't have available directly the total number of units here in the city which fulfill a lower income household need at this moment and how many lower income households we have that would be a follow-up item commissioner test any questions or comments on you know the focus you know really needs to be on you know in lieu of the units in place or a blended approach and you know the pros and cons of that yeah my thought um was uh kind of twofold I think I personally would prefer to see the blended approach um so that we and and maybe the level of the number of units being built is considered after a certain point like whether that number is 50 units then they can have the option to do the in lieu fee something along that those lines um I also have a little bit of a concern about the 15 percent um level in the project um we really want to see a lot of housing and I would hate to discourage builders developers because that fee that that fee is a little too high for them to meet all of those guidelines so those are my concerns any thoughts commissioner morgan jackson yeah I I guess the only thing that I am pondering about is um the concept of being able to allocate one project's affordable housing requirement to another project that seems to me like that would once again lump our our affordable housing into one project in one part of the area and I don't think that that's what we want I think we want to disperse affordable housing among this around the city so I don't see how that is such a good idea and that um sentiment was was brought up in a number of venues when we presented this idea early on um so thank you um we can return to this topic there's really four major slides to move through in terms of these policy issues and we can advance um yeah speaking to um commissioner downy's question about an assessment of the need that occurs when we submit our consolidated plan to HUD for our federal resources and then to commissioner Olson's question about what happens more timely I just wanted to interject that whenever the market rate developer would pay their fee in lieu of providing a unit that could be at the time of pulling their permits it could be deferred to occupancy but whatever that amount is that's paid ends up in your notice of funding availability process um the following year and really the longest it would be is a year and as you know some of those developments that we bring forward to you we have to that NOFA process those projects also may have already been in for entitlement so I just wanted to share that I mean I think that you know kind of an abstract form or academic form if you were to require that the units be in place it distributes the units more effectively throughout the community and gives you that objective I think pragmatically it would have a detrimental effect on the non-profit developers and some of the funding is available to make projects feasible and so you don't want to necessarily eliminate that option you know which leads you know to a more pragmatic approach which would be the blended option which I think is what the planning commission ended up with as well as well so we can return to it but those are just my thoughts on on that particular option not topic you don't have they have hard I don't have copies with you I'll get you one from up top all right so the next slide begins to get into the regulatory aspect I mean the the question do we have inclusionary units pay a fee or blend that's sort of a big global policy or direction approach this gets more into the dials so should the project size determine when inclusionary onsite units are required some jurisdictions allow the fee to be paid for projects with one to four units one to ten units but after a certain threshold they trigger a need for a requirement for the onsite units to be built the city's regulation now applies the inclusionary ordinance all projects from one unit on up it does have exceptions for owner builders and also affordable housing projects and such they they aren't required to pay a fee or to build the onsite unit but the city that does allow or does require every project residential project to contribute so one approach is to to require the onsite units to be built set the percentage at well we're at 15% now with low income units in a market rate project the white paper the economic analysis found that it's that at 8% or so is is a threshold at which developers can make their pro forma's work and and move forward so that's that's one approach is to lower the percentage that we currently apply and maybe adjust the affordability so they cannot they can also build low and moderate housing in order to become whole financially in their projects the other option is to allow small projects that one to four or one to ten or whatever that number is to pay the in lieu fee and then recognize that the larger projects have more financial capacity to actually build the units onsite and absorb that cost the the other idea is a sort of this blended approach or sliding scale approach um the percentage of of units that are required to be built in the project relate to the affordability that would be proposed so very low might have a have a lower percentage of inclusionary units while moderate inclusionary units would require a higher percentage so there could be a ordinance written with that kind of a sliding scale of affordability and percentage so i don't know if there is any immediate response or thoughts to that sure have you looked at the possibility to promote infill development smaller small lots not necessarily size but number of units number of lots infill locations to not have a fee for subdivision that was say 10 units or less so you're promoting infill location which is what the city is looking to have done so you don't have outlying areas there are smaller land parcels within the city that could substantiate a four-unit five-unit subdivision that if you put this fee on it makes it doesn't make it feasible to do those and that would reduce city services to an area that's already built out you're not extending city services that has that been reviewed we did look at or are looking at the idea of using or waiving the fee or reducing the requirement in areas where we want to incentivize housing such as downtown infill development is is also a an important strategy to effectively leverage our existing infrastructure and help fill out our community capital so that's that's a kind of incentive or incentive that should be considered and noted in this the structure of this ordinance so thank you so is there a threshold between eight or fifteen the the city would minimally need to collect to have this process function in other words how low can we go in the interest of stream mining and expediting uh building houses or residences for people um well there's there's the financial aspect of it paying for our services to to allow development to occur but the other is um how do we structure the regulation so that we are still getting the housing that we need for different income segments in the community housing for all I I don't know if we've defined a bottom regulatory approach to that we're certainly trying to remove barriers things that impede the community from building out infill site or designated area where we want housing so this exercise is identifying what we think are the financial metrics and the regulatory tools that we have to help get the housing we need for all levels of income and um and and accomplish our goal of of land use residential development so I don't know if that answered your question it was it's for several years that the ordinances was came into place in 1992 I believe and over time it's changed uh the 15 percent is relatively new um but uh it hasn't really had much impact on um onsite development because the ordinance is structured to allow the developer to pay the fee instead and on the scale of paying the fee versus building the units it's been a lot easier to pay the fee uh so it's been several years and it's not that number quite frankly is a number that's coming out of sort of a general understanding that was the appropriate number uh back several years ago but you wouldn't say that the 15 percent has been a deterrent for builders it seems like it has been not a consequence to the build it seems as though the 15 hasn't brought uh builders who wanted to build affordable housing um less of that into our community hasn't 15 hasn't really helped us get affordable units I think the housing production table that we showed earlier that um we only had 174 units constructed over I'll say decades um using that approach we we think that number that figure that that table tells us 15 doesn't get us those onsite units as we'd hoped it would yeah and our our existing ordinance um allows for developers to consider providing onsite at 15 um but otherwise they can pay the in-loofy um and so that's what we're seeing is developers providing that in-loofy I'd be interested in knowing how that percentage has fluctuated since the beginning of this ordinance and what effect that has had on developers deciding to do affordable housing rather than the fee question there used to be a requirement for I recall that the project was over 15 acres there there wasn't the option to pay the fee they had to build onsite I'm not aware of that that might have been with our previous ordinance but the current ordinance does not have that requirement where was that I guess the question is if the option was taken away on that large of a development over 15 acres did that produce more affordable housing units and from a practical standpoint are there parcels or areas within the town within the city limits that would allow for over 15 acre development just by looking at what's available that's not impacted by tiger salamander or wetlands oh I mean I you identify a circumstance that exists today I mean we have subdivisions that have been approved for residential development including inclusionary units um on Fulton road at the north end we have village one village two exactly that circumstance and those did enter into affordable housing agreements with inclusionary units on them but they've held off development for so long what I say north village two did and that sort of is an indicator of financial viability so I think it's there are probably few sites of that size greater than 15 acres available but um we do need to anticipate that we will get if not larger development sites we'll get projects with a larger number of units in them because of density through density bonus and such so often the threshold is built around exceeding a certain a unit threshold 20 units 50 units and so forth where the where the requirements will be switched I mean one of the realities also is that when you have a fixed percentage and the real world is that you have interest rates you're going up and down you have demand that's going up and down and so 15% might work at some points in time and maybe it's too high at others and and it could be could be higher at other periods I mean it's that's one of the difficulties you know with a policy that's determined by government is that it may be appropriate at that fixed time when it's adopted but a month later it may be out of date and I don't know if there's anything that could be done in terms of indexing you know to the real world situation so that the percent goes higher or lower depending upon what the other circumstances are to make projects feasible and I wouldn't be able to comment on that tool indexing tool maybe our consultant here Sarah Graham who has worked with she prepared the economic and feasibility analysis for the residential component of this yes Sarah Graham I'm I'm with strategic economics and we conducted the nexus study and then also the the feasibility analysis that is being referred to I think what we would recommend rather than an indexing to an inclusionary percentage which I have never seen in practice would be updating the study on a on a pretty regular basis because as you point out market forces are changing it's cyclical conditions conditions are cyclical and changing and so really the best course of action would be to revisit the question if conditions change we also recommend that a fee is updated every five years in any you know circumstance so at that time the development feasibility analysis would also be updated so you have that better information so rather than an index you're suggesting that there being a regular update yes have you seen any other community use an index not on an inclusionary percentage no most typically fees are tied to a construction index so your impact fees are tied to some type of index to increase with inflation but I've never seen an inclusionary level percentage tied to any type of index where did the planning commission come down on this one remind me please there was a lot of discussion about the sliding scale idea and we did talk about an in lieu fee available for small projects and then what would be the definition of the large project what what is the threshold and we can get into some of the math in terms of the percentage when you calculate a percent and you have a fractional unit what what's the logical break number between a small project and a large project and it seems to be about eight seven or eight units you can actually beyond eight units have a calculation for a percent uh affordable unit and get a whole unit in there that's would be allocated for a lower income household so there was certainly the idea to to evolve the existing policy and and to have a percentage that doesn't dissuade development that's reflecting current economic conditions or our understanding about what developers can carry in terms of affordable units on site and then have the appropriate project size seven or eight units was the break that was thought about and that to me that sounds logical to require a unit for a duplex doesn't make too much sense right you know and it's kind of in parity with what other jurisdictions are doing in the area it's it's somewhat similar the next topic area or policy would it be feasible to abolish a fee and build it into the rent i'm sorry it's again abolish the rent so would it be feasible to abolish an upfront fee and build it into the rent so that it's spread out throughout your tenants realm of contract and could be retrieved that way or is this am i just too far out of the weeds well the inclusionary units that are developed by in a project that cost to the developer is is spread amongst the market rate units and the question is how many units can affordable units be built in there before the that spread of before the market rate units become too expensive and and for for the for the home purchaser so that that's an economic analysis which sarah graham prepared to identify that percentage eight percent for residential for sale and be able to understand at what point we can continue to have viable single family for sale projects as well as rental projects yes i had a question um with regard to income families with incomes between 80 and 100 percent has the study looked at how we're doing on those needs well we um we had some we looked at median or moderate income up to 120 percent there was an assessment of need and what they what they could pay um and i'm so we didn't look at that that increment 80 to 100 percent specifically and the reason for that question is i think there's a group of quite a group of people in that range that income range between 80 and 100 percent that um that need housing here in sonoma county okay and that would fall in our moderate category which currently is not allowed as a um inclusionary type unit but it could be um i imagine funded in part using the affordable housing fee generated by the enlou fee yeah okay um okay so the next slide has asked the question um what is this and we've already talked about this what is the appropriate onsite percentage requirement this graphics tries to to get at that sliding scale concept um right now we have a for sale 15 requirement that to include low income units in the project now if we were to have a sliding scale for instance and say developer wants to come in and build moderate um we would say you would have to provide 10 units for moderate income units if if we changed it you know to low then maybe that percentage drops down to 8 percent if it's very low maybe it drops even further so that's that sliding concept scale and for rent um we would also um have a sliding scale could be potentially tied to the percentage of in in affordability on the project so it sounds like this is an idea that that the authority um might want to discuss or consider uh as as a way to incentivize certain levels of affordability by using that percentage element going back to that slide that you showed in the initial one where there's a shortfall between our goal of the regional goal that has been established for Santa Rosa versus how many units are those all 80 percent below or were those are you speaking of the rena um slide so what's what's the income objective so these this um the table breaks out the different income affordability categories yeah I see so the so the 15 the total is the 1509 and then it's okay so so that makes sense to be able to have a program that's helping to meet each of those categories of needs right and and the again back to the the dials concept we can change the levels to encourage development inclusionary units at a certain level of affordability you can go deeper or it can come up to moderate and probably doing that so that you don't have every proposal being at the upper end that would be one policy consideration right I would think that if you're looking at an 8 percent of very low income versus 10 percent and low and low income you'd have to do that because the economics associated with what rent you can be charged exactly you can't recoup that and make the project economic because is one of the things you talked about is the to attract the capital necessary to do any sort of development there has to be a stipulator rate of return associated with that developer and one of the other things that you brought up was that the the um the type of financing involved because construction costs or construction costs and this can be safer later but I was looking at the construction cost in in the in the white paper and that's it's definitely higher now than and what was put in the paper because of the cost mostly because of the fires and we'll see if that comes back down that's a side issue the the other aspect is from a financing standpoint to attract the the capital rate of return to do these projects requires because the costs are going to be the cost market rate or or affordable really does come down to make them feasible as to what type of financing gets put in place and to do that the projects need from my experience to be around a minimum of 40 to 50 units to try and attract either the tax credits or the tax exempt bond financing mostly tax credits to make that work because the cost associated with putting that financing together is quite high and that can only work on a larger type project so to the extent that the in lieu fees allow that was money those monies to be put into the city for leveraging purposes to allow a developer who it's it's a completely different business model to do affordable housing to do market rate as the city is well aware and to the extent there can be partnerships with larger projects where you'll have an affordable housing developer do the affordable piece and the market rate it's it's they're different business models and so as I'm reading through this and and looking at the city could look at projects that were infill that are smaller lots that would make those more economically feasible and would help the city in terms of their infrastructure cost and not have a fee for something over I don't know what the number is eight units nine unit infill location and then collect fees associated with with over that to be able to pull those monies for the affordable housing developers to come in and use those funds to make their projects work but to require a for a market rate developer to build onsite 15 percent or maybe it's less than that for a 30 lot subdivision I don't know if it makes that economically feasible and it would push the market rate units to a higher cost number or sale price number to make to pick up the cost for what you have to sell these for or potentially rent them for and then you're making the market rate that much higher and you're kind of defeating the purpose in terms of having an overall spread and having the having the market rate be a lower price and just commentary from what what I've seen on this I mean if I understand you correctly the it would be appropriate to charge a fee for the much larger projects and not for the smaller or infill projects to help make help not so it's not to under erode the financial feasibility of the smaller project that's correct and and I don't know if the city is looking at staff has looked at from pragmatic standpoint where there are properties available for a four lot subdivision a five lot subdivision you know if there weren't fees associated with those smaller lot subdivisions they wouldn't be more economically feasible and more attractive for development potentially hence the larger projects that could afford to pay that fee because they're spraying the cost over a larger number of units we don't have that inventory we do have housing opportunity sites that we maintain in our housing element but we haven't gone through and we're do that type of inventory yet we are embarking upon a general plan update and that type of analysis will be conducted I don't know if Jessica you have any comments about that to add to that but also I would suggest to the that Sarah might give some insight on the rationale for the fee structure that was analyzed and how that would not undermine the development potential provided of residential development provided we allow for the rate of return that we've identified as a threshold if if I follow that correctly it's almost the extension of what has been done at the state and the city's level for 80 years it's that's right bringing it up a notch excuse me sure well first I want to note that the city has an existing fee so there is a fee in place that is being charged that sorry you probably couldn't hear that I want I think I just want to make sure that we note that the city has an existing fee in place it is in is in place it's being charged now so what we're talking about is a recommended increase in that fee amount and a corresponding change in the inclusionary amount and we are the recommendations that are in the the technical analysis basically represent the highest fee amount that is was found to not impact development feasibility for a number of prototypes that we looked at so we can't say you know it applies to every potential project that could be contemplated and we did not look specifically at a you know a small infill development we looked at a single family for sale home a town home type of development and a sort of a garden apartment those projects those three types were the types that we found working with staff to be the most common occurring in Santa Rosa now and also in some other you know places in Sonoma County but specifically in Santa Rosa so that's why we looked at those and the recommended fee level is was designed to to not negatively impact potential development and then an inclusionary level was calculated similarly so it's it's the highest inclusionary percentage that through our analysis was shown not to negatively impact development feasibility and so those two levels could work together um depending on the city's policy so again we didn't look specifically at a small infill project so I can't comment exactly on how the you know the potential fee increase would impact but it is an existing fee that would be recommended to increase and an inclusionary percentage as an option I think it's maybe not within the scope of the discussion and we haven't drilled down to see what the difference might be but I think it's a it's it's kind of an adjunct discussion that may prove to produce more units like ad use I think have been pretty successful um they may be extending that idea and you know kind of maybe outside the scope of the HAP I don't know but something to consider well the HAP could have waivers for certain types of development and that might be a type of waiver and I think you're talking about going beyond these fees are you not it's to the extent that a small a smaller number of watts production can be done in an infill location um and because it's difficult to take these fees if you have a larger project you can spread those fees over a larger number of market rates and and then the project becomes more economically feasible that's very difficult to do for a five-watt subdivision to have those fees in there and still make it economically feasible if those fees were not charged for that type of project a smaller infill location then that project become more feasible and more units get built and while it may not be they could still be classified as market rate you're still producing more units within the city which is something we need to be able to do anyway so no units no fees for that small project example it's just something to look at as to whether or not it could be and I don't know what the developer feedback is for that to be able to do a small watts of a smaller number of watts and it because we do have density bonus for a project that could be done this would be another incentive that if there was a smaller number of watts in infill location which does benefit the city and to not have fees associated with that or a smaller amount of fees associated with that because they can't spread it over a larger over the rest of the market rate units okay so back on focus on this is this a concept that this group would suggest has a good direction to go and if not I mean it seems like it has some merit in terms of flexibility and maybe producing some more proposals for housing that would be feasible I don't know my thought so this again would be 10 percent inclusionary with moderate income units 10 percent moderate income units and projects for a for sale and then for rent would be 8 percent for low income units in a rental project I think the concept to me makes sense can't speak for the other members of the housing authority course thank you so we move on to the next one yeah so uh apologize in advance for the dense number of numbers here but here is we want to really be transparent about what the what we're collecting today in terms of fees for these different prototypes units and then what if we were to um set a fee update the fees for these prototypes what the resulting fees would be or what we would collect so for instance single family detached it's a 2000 square foot unit we currently charge based on a percentage of sales price and based on the $660,000 price we collect about $16,500 if we went to a $13 per square foot fee we leave the percentage behind and we go to a square foot fee uh $13 we are collecting $26,000 in comparison nearly $10,000 more in a in lieu fee in that circumstance when we look at our apartments there we currently calculate the in lieu fee based on apartment size and it's a kind of a scaled fee there and what we analyzed was a 908 square foot unit which currently under our fee schedules a dollar per square feet if we were to apply the $13 per square foot I'm sorry $10 per square foot fee for that type unit for that size that $908 fee goes up to $9,800 or $9,080 so that's a substantial jump but that's an artifact or a result of having a flat fee applied across the spectrum of unit sizes when we go to the larger size units up to the 1,750 square foot size unit it becomes it's more on parity in terms of what we collect today versus what would be collected in the future goes from $12,700 to $17,500 again these numbers the $13 per square foot for single family detached versus $10 a square foot for single family attached to the townhouse in the apartment would protect the rate of return the developer would expect or need in order to commence a project in this market so the actual dollar amount here is was analyzed as being feasible but it really is a policy decision is how that number actually gets defined or set one policy decision is should this fee be applied citywide or should it vary in different locations so for instance on the third line there you see downtown is an area where we're striving to build more housing mixed-use development and we might consider in that circumstance to not apply the updated fee schedule that you see above and maybe reduce the fee for smaller units in that setting or a waiver or reduction the suggestion that we have certain styles of development charged a lesser fee or a fee waiver this is how that concept might be applied in the downtown area the demographics downtown are skewed towards lower income that's correct thank you we start down here and see if there's any questions or comments about this particular point of discussion so we're going so we part of it be going to a square foot mechanism for determining the fees any thoughts down here can you provide some background as to why the switch from a percentage of sales versus a street dollar amount per square foot why why make the change in regard to how you're you're computing the fee well it's atypical a percentage of sales price as an impact fee for housing is is atypical it it's more typically applied in california as per square foot fee or per unit fee so it is a little bit of a an unusual structure the existing fee it also it applies after the fact after the sale whereas the per square you know foot fee is is would be applied earlier in the process we just we would recommend that it go to a per square foot fee for sort of administrative purposes because it is less typical to do it the other way in fact I don't know of another example it also becomes more comparable to the inclusionary policy that that's structured that way it's it's more straightforward to compare them but I look at it if you make it as a percentage of sales so it's six hundred sixty thousand square feet six hundred sixty thousand dollars two thousand square feet that's three hundred thirty dollars a square foot and and on a sale price basis and if that if we have an economy that's growing and the housing prices go up it generates more fees and if the housing prices are going down and generate fewer fees and that it sort of has an indexing approach built in by the fact that you're doing a percentage of sales on a per square foot basis that gets locked in as you said before we should look at it more frequently to kind of sort of index it that way but on a percentage of sale basis whether or not other people that are doing that's kind of built in into being able to have an indexed so if the market prices go up the the developer would be able to take advantage of and as a project goes goes down now the one of the things you do have that's that's important associated with this is if it's on a percentage of sale price and that can't be set until there's a sale the city wouldn't generate the fee until there is a sale versus the other one is is paid at building permit currently it's paid at occupancy okay thank you but that would also be part of the policy is to move it towards when the size of the apartment is finalized that that's when a fee would be due or would it still stay at occupancy yeah that would be a kind of policy decision whether that fee should be paid upon the issuance of the building permit versus at the end of the construction process of the unit these numbers do just in looking at at the fees it does look as though we are punishing developers of smaller apartments which if we're trying to get as many units as we can it does seem like that's you know looking at these numbers it just looks like we are punishing smaller apartments which 1700 square foot apartment these days being built just seems crazy so that is kind of overwhelming to see it black and white up on that screen yeah and this is not a graduated or scaled fee like the current ordinance is set up that one dollar per square foot that's there for the single for the apartment 908 square foot apartment that first increment jumps to like two dollars and 60 cents a square foot and then it increases as the units get larger over time oversized so one of the questions one policy consideration is should that fee structure be set at 13 dollars a square foot and then is there a reduction or a discount for certain types of units that we seek in the marketplace and it could be the incentive for developer that way if you pay it if you pay it based on the sale price of the house it's somewhat inflationary too the right yes thank you move into the next one so this provides a little comparison of fees that are charged around this area so the red cells show the high the cost leaders and the green ones are the low low fees so you could see our 13 dollars square foot for single family detached is a bit beyond it's it's it's at the higher end of the range but it's not the cost leader at ten dollars a square foot for the for the attached or count home units and and and the apartments it falls in in that same range so just just give you a sense and if if we were in the competitive competitive marketplace for residential units that were not at the high end or or beyond the high end so the major the other issue is um when inclusionary units are built to what standard are they built are they built at the same size uh are the interior and exterior finishes the same and um this does have pricing impacts for the developer but also it's an important um aspect to help integrate a lower income household into the community and not distinguish them by unit type so it's it gets out an equity issue so here our current policy is that the affordable units are to be of similar unit type and floor area and that their finishes the exterior finishes are um compatible or the same as the remainder of the development um we can continue that policy or we can insert an incentive in a in a sense that these units might be a little bit smaller in square footage but they have the same bedroom mix as the market rate units or we could just simply set a hard minimum size limit per bedroom type so I don't know what that might be a thousand square feet for a two bedroom um 1250 square feet for a three bedroom or 1600 square feet and and that way dictate what the sizes are um with regard to the exterior uh or the finish quality um it's my understanding that um while we do require the exterior finishes the material and type and such be the same as a remainder of development that um the interior might not be finished to the same level as the market rate unit what we learned from developers and what we also heard at the planning commission was in many cases the developer builds a base configuration for the interior unit and that the buyer will have upgrades to the interior so in effect in effect that's kind of baked into the marketplace so maybe the interior finishes will always be market rate affordable and then from there premiums will be charged for the person who wishes to have more so these are considerations that need to be a part of this update to the inclusionary ordinance so it sounds like we haven't been hearing that the current policy is the deterrent to developers um it was neutral I mean I don't think we heard it was a deterrent I don't know if anybody heard that um it's pretty standard practice but it's how would how do we quantify it to what level do we prescribe these we have pretty open-ended standards similar mix it we allow for some variability in there in that likewise compatible exterior appearance so there is some flexibility built in it do we but do we want to be more proscriptive do we want to have for instance a minimum square footage per bedroom or how shall we is there benefit for doing that distribution of the units rather complex is that in the topic this can discuss um yeah so uh distribution within the complex I'm sorry yeah okay you have um hundred units you know 20 units per five buildings and you put all the low income and one of the 20 versus spreading them out through the complex yeah that that correct thank you um that was discussed and I mentioned earlier um that that was held as an important part of our program but it's been identified as a challenge to developers seeking taxing low income low income tax credits that uh having a truly blended project leads to financing difficulties and I think it was pointed out that maybe those are the larger projects that are directly impacted that way and we've seen that with projects here in the city but in the density bonus ordinance for instance there's a provision to allow for the dispersion requirement to be relaxed when there's a financial hardship or infeasibility demonstrated so that that would be an option there you'd have it that'd be a default right yeah okay right if I'm not mistaken if you're if uh applicants going in to taxes and bond financing the state or tax credits the state's already a requirement that if it's a mixed use project that the mixed use units have to be dispersed without the within the project with throughout the project can't be one building where it's all the affordable units are in in one area so I think that might already exist um in terms of finishes uh because from an economic standpoint for housing for housing projects the rents are stipulated as to what can be they can be increased every year to based upon income it's a percentage of income the maintenance cost has to be kept low so putting having the city put in any stricter of a requirement that's beyond comparable finishes and as you pointed out a housing person would come in and increase their options on it but it be who's the developer to be from affordable housing to put quality into a project from because the maintenance cost has to be kept low so putting something in that's cheap that has to be replaced every three years versus every seven years can't be maintained from a from a cash flow standpoint because they they can't increase the rents to pick up that maintenance cost the maintenance cost has to remain low so it's almost built in but I do think the city should have something in there that states that of comparable quality of the market rate units but it doesn't really need to I don't see the need to have it be more detailed than that so if you're differentiating between uh for mica versus granite countertops is this a savings that will be passed along only to the developer or is this a savings that will be passed along to the housing authority in general I think if the base unit is built and it doesn't have the premium materials or upgrades that is a cost benefit to the affordable housing or that the lower income household occupying it and also for the housing authority who is helping these projects come forward that the construction cost of the unit that can be delivered for affordable housing will be lower if if we were to require granite countertops for instance or premium finishes on all the units the base price of those affordable units would be that much higher and the gap that needs to be funded would be increased for the developer am I conceptualizing that correctly um so I think that having a base unit really is being a benefit passed on to the lower income household and the housing authority by allowing those units to be built financial if these are for sale units then the the outsides have to be the same and then that's we require now but as far as the in insides uh countertops or whatever they are that could all be changed in time by the owner of the affordable unit at a time when they may be able afford to do more so I don't think uh cutting down the sides of the bedrooms is I think the bedrooms in all the units should basically be pretty much the same size as the ones um market price or affordable housing but as far as the interior finishes whatever the floor might be or the countertops might be uh I think that the units will have a base the way it works as most of you probably know is their unit is shown with nothing in it and then you want to put something in it you start adding and that's what it'll it'll be for like a countertops and there will be an option offered for grand countertops the same as for carpet to hardwood or chrome to bronze and the hardware so the base unit is the base unit and and I think it should be kept that way to keep the price down but like I say if the people that have the unit if they come up with some more more money later on most upgrades are not that expensive in fact they're cheaper to do it yourself they ought to have the builder do it right so it looks like start with the base everybody and if people individuals want to improve what they can okay um and then uh we we've talked a little bit about the idea of uh well there's a number of ways that flexibility can be inserted into the inclusionary ordinance one is that the developer be allowed to dedicate dedicate a site not on the project site somewhere offsite which is our continued our policy today and the other is to allow for land dedication and then an innovative alternative that we can't think of today but that might come forward and and how do we consider that or do we even consider an innovative alternatives so one so those those three things that we do today are part of a bag of of of things we can offer for for incentivizing making onsite projects onsite units to be built either on the project site or elsewhere um the other thing that's up there in the what f category is um do we allow conversion of existing market rate units uh to to affordable units do we um it's it's kind of taking it's not necessarily creating new housing units in total but it is shifting the availability of housing units to certain income groups so that's that might be one approach that we consider and the other is um do we allow a developer to provide or fulfill an inclusionary requirement by taking a unit that's about to term out an affordable unit that's about to be out of its contract maybe it's a 30 year contract um can they go in and buy the unit and extend the contract and preserve it as an affordable unit over time so those those are some options there with regard to geographic dispersion we talked about dispersion within the project site but also there's dispersion within quadrants and our current policy is that in the city which is divided into these four quadrants if these units are to be built offsite they should be in that same community um and and there's been some question of whether that really does provide for dispersion throughout the city um what I don't have here to show you today is that we have three quadrants that really kind of share pretty equally the affordable units the various types of affordable units out there and northeast Santa Rosa has less now there's a lot of reasons for that uh land cost difficulty of development uh such that might have um attract development to one quadrant versus the other but should we allow people to do offsite units and let's say northeast quadrant uh rather than having to build it in the same one so there's that's another policy decision um that that can be made here and then this is also we talk about here the idea of transferring uh inclusionary units um as credits to a future project I think you brought that up my thought about that is would the future unit be something that we already know is is in the works is it just oh we'll do that later or what would be the the kind of policy around that it will we already need to see that project be shovel ready before we could would allow that or that would be that would be the those are the issues we would have to reconcile in crafting that approach is how does a um origin project make sure that the future units are actually going to be built where can they land um how do we manage that I think that it's a good idea to make sure that there's those units are going forward before you have authorization for the other development to go forward I mean that's there's been a few times when the city has been burned in that the the one you know this kind of fits into the discussion we're talking about the demographics down in town may be low income so if you don't have fees there to encourage housing it may have a better mix and then in other areas like the northeast you know the comments from Commissioner Owen and a quadrant that tends to have fewer large parcels available than other quadrants maybe still a number of smaller pieces of parcels of land you know might benefit with development and affordability as a result of a policy like that so it's I think I think that in and I know that in a part of the discussion it's been kind of the this question of the default well if it's if it's a default what are the benefits and where the unit is going and what is it going to do to the demographics of that part of town and the balance in schools and and income and that that type of thing I think those those would be factors where you know if it's the if it's the director of planning and economic development or if it's the city council or if it's a hybrid committee of the housing authority the planning commission and city council that has kind of oversight into those and and receives those proposals and you know has maybe some standards that it's trying to achieve those are projects that I think would be perfect for that level of approval and appeal other comments comments and then finally before our summary slide we mentioned earlier that one of the slides earlier mentioned the change of the affordability period from 30 to 50 or 55 years that would harmonize with our density bonus law and then I just have up here the last point regarding exemptions you can read that list there and see that it's all housing related or affordable housing related type uses development activities as well as the owner builder the the person who is building their own property provided you know they don't build more than five one unit every five years I think it's it's the refresh time for the owner builder and I don't know if there's anything here that the authority would want to comment on or change I can think of one development that went forward and it was the only one that I can recall doing this maybe there's others where it was the idea was well the developer had the capacity to to build the rental units make them available to low-income people for rent for 30 years and I think with the idea that at the end of 30 years that would be kind of a legacy you know to his heirs and in that case and I don't know what and I don't know if that's a good thing or not such a good thing you're going to lose it as you have 30 years of affordability for x number of units but and at the end of 30 years you'll lose that you know to the to the benefit of the developer that developed the project if they still own it I don't know what I don't know if that would be a deterrent if you extended it to 55 years or not but the longer term of affordability is always appealing to me but I just don't know if there's other consequences like that that would be detrimental I don't know there may be certain grant program requirements for that term I would look to my colleagues to confirm that but state and or federal programs may require 55 years for for that so we would be harmonizing um not only to our state density bonus or but density bonus law but also to funding sources 55 years as I understand it's kind of as long as you can make a requirement um and that's as close as perpetuity as you can get is that something so the attorney that you are aware of in terms of is 55 years comes as that's kind of a yeah 55 years is a standard provision as um as Andy mentioned in a number of different federal programs and state programs um I'm not aware of a specific limitation to 55 years but I am aware that this that's a very um common period of time comments from other members of for a project that's going in for tax credits 55 years that to attain those tax credits is pretty standard um same for for taxes and bond financing if you're going for four percent tax credits so to to have this match what is done at the state level seems to make sense sorry 55 years so this last summary slide on the inclusionary ordinance or charts or gives us the discussion points and having those up on the screen in front of you may trigger some follow-up thoughts or questions if any I won't attempt to summarize well I will attempt to summarize but really quickly that a blended approach would be a this body would think would be a good way to go with the inclusionary onsite and and in lieu fee and that the threshold for when the inclusionary fee applies or or in an onsite development is required there should be a project size we talked about seven eight there abouts and that the the percentage should reflect affordability we had eight percent and ten percent on the screen depending on if it was moderate or or low income um and that uh we could have an opportunity to incentivize uh downtown development using our fees to waive it or reduce it um one suggestion was infill development uh proposal that was up on idea up on the screen was downtown um and then with regard to size and finish they should really be the same the concept of the base unit for interior improvements would be appropriate to move forward um flexibility is always good and it seemed like we had the right tools up there um to to allow for some opportunity for location on the property of affordable units or offsite and how we might do that whether it should stay in the quadrant or not um and then in terms of there was really no change other than the uh the ideas we should extend the affordability term to 55 years did I miss anything major in that recap okay no I think that's a good summary let's say I missed something okay see nodding hands okay so now um turn it over to Raeisa uh she'll take you through the commercial linkage fee thanks guys all righty good afternoon I'm Raeisa Delarosa the economic development manager and I just want to point out uh Sarah whose last name I cannot recall of course um she is with strategic economics and they're the firm who did the nexus study for us so also available for questions as we go through this okay I'm on the right slide okay so the purpose of a commercial linkage fee is to mitigate the demand for affordable housing resulting from new commercial uh market rate new market rate commercial development so in consideration of adopting a development impact fee uh we're required to do uh to establish the link between um the reasonable connection I should say between the development project and the fee that would be charged so that's the nexus study so in addition to quantifying any of the uh connect the connection between the development and the demand for affordable housing and the study also considers other fees and policies again to to get to a point to where uh a commercial linkage fee would be feasible for development so as we go through this we're going to uh like with the um inclusionary policy have a number number of considerations we'd like you to think about but this is much more straightforward and short so I think we can unless you have burning questions as I go through I can probably wait till the end to sort of take the considerations all at once um all right so again by law a nexus study must ensure that any fee imposed is actually feasible to a development and to establish what the threshold of feasibility is and also that there is a relationship of course between affordable housing and the commercial development as such the study analyzed the most common commercial development types that are occurring right now in Santa Rosa estimating the number of workers that would uh work in those new commercial developments or those spaces um what the estimated worker household income would be and what the affordability gap for lower income households would be based on recent trends the consultant looked at prototypes within these sectors hotels retail restaurant services and business park light industrial and then also with the assumption that the fees would be applied to all commercial development but we had to isolate the prototypes that would they'd look at for this study keeping in mind the city's interest in considering development feasibility first and foremost as well as the total development cost and comparator cities the key questions that are before you today and also similar to what we're asked of the planning commission before you are should should we adopt a commercial linkage fee how does it fit within our housing strategy how does the fee affect total development cost again the feasibility question should we consider our comparator cities either comparator cities or even those cities are neighboring cities within Sonoma County and what options exist for payment alternatives is their flexibility or innovation that we can apply to implementing a commercial linkage fee the when we took this to the planning commission and this is a brief summary of some of the things that we heard from them mostly I should say across the board they agree that we should have a commercial linkage fee that it would be helpful though they want regular review there was a question about and or a question about whether or not this is only for new commercial development because what happens for example when we have an intensified use or change of use should that be considered in the fee structure and then not just that do they suggest that three dollars per square foot is reasonable but they suggested that that is in fact a good starting point to discuss perhaps varying the rates as you'll see as I go through for the different prototypes but three dollars per square foot they agreed is a reasonable starting place similarly we took this out to various business groups and have heard from the public again on the whole we've heard that the commercial linkage fee is desired that they like the fact that it makes businesses or new development accountable for the housing demands that they'll be bringing to the to Santa Rosa however they don't want to see it to such a point that it could potentially discourage new development and as I think that we try to do within the city that whatever we do with these fees is transparent and to be clear it would go through the housing trust to the housing authority so again I'm going to lead you through a few things some considerations I'll point out where what to think about when I'm going through the next slides but the first consideration is you know should we adopt this fee we don't currently have a fee in the city of Santa Rosa we're one of the few jurisdictions that does not have a commercial linkage fee so should we have the fee and how much should that fee impact the total fees that developers new commercial developers pay so this slide I'm not going to ask you to look at those tiny little numbers but just to give you an understanding of where we are and what the study looked at so again looking at the the prototype studied and the the factors that were considered the number of workers the household income etc what this chart what these charts show you is the pro forma analysis that tested the financial impact of the maximum as well as two reduced levels of scenarios by each prototype so the black lines is the yield needed to make the project feasible so what is what what do the developers need to earn essentially to make this possible and the red the red lines or the blocks are the total stack of fees within the scenario so anything above the red block line the red block I'm sorry anything above the black line shows capacity so if you're looking at hotels you'll see that even at the highest possible rate the maximum rate that need that could be charged to make this possible the hotels have the most capacity when you're looking at three dollars or six dollars they have the most capacity above the black line to have a fee imposed on them however when you're looking at retail restaurants and services they are right on the margin similarly a little bit less so with industrial industrial park and I'm sorry business park and light industrial so basically when we're looking at a maximum justified fee the the black lines that you saw above and anything on with the stack and looking at the maximum justified fee this is not feasible for most development so that's why we're looking at when we're going through this we're looking at the three dollar per square foot fee option as a starting point to show that in the prototypes there is capacity and we have the ability to charge this while still making those development those typical developments feasible because I'm hoping that makes sense to you okay so other policy considerations is if we adopt the commercial linkage fee how should that fee be compared to other cities and so we looked at some of our comparator cities as well as jurisdictions around us again we're one of the very few cities certainly of our size that does not have a commercial linkage fee and we find that or the study finds that three dollars is comparable to most cities you'll see fremont has the highest at six dollars and run a park across the board is the lowest something else I'll point out is with the exception of pleasant in most cities vary their fee structure based on the prototype based on what they're it could be either what they're seeing what they're want to incentivize or you know perhaps in their area what their capacity is so the last question we are asking basically is what options exist within paying this fee do we have any flexibility or innovation so again this is very short because it's pretty straightforward do we want a fee do we want flexibility within that fee should that fee vary how much do we consider what the impact of that fee is to total development costs and how do we does it matter what our neighboring cities or comparator cities are charging and within that last point I will say you know again it's difficult to say what run a park does we're almost 200,000 people we have a third of this county's housing units and I'm sorry we house a third of this county's residents and we house also a third of this county's businesses and so we're looking more at the comparator cities like with like populations and again we look much more similar at three dollars per square foot to those cities and so those are the questions before you on commercial linkage so first one is fee start down here so I think it's an interesting idea given that the press democrat did a huge article on hospitality line and they also attempted to do some metrics around the cannabis industry within the interest of integrating the cannabis industry into hospitality but given the incompatible state and federal laws with cannabis I'm wondering if there's an interest in wanting to move cannabis more into the hospitality industry would there be a way of protecting people involved in that industry so that they can participate in this fee as opposed to feeling like they're paying another fee on top of absorbent fees just to try and be compliant with a whole bunch of mixed messages so something that should be noted about a commercial linkage fee this is you know really be considered in the land value at the land cost so it's really based on land use really it's a one-time fee generally incorporated if I'm correct in the land value so if you have a big cannabis operation and you build the building you're going to be charged to see if it's something and regardless of what business it is what the fee would come along with it yeah commission your test I'm a little surprised that we haven't actually adopted something like that in the past I like the idea of a fee that's comparable to other cities of our size those would be my thoughts initially I as well didn't realize that we didn't have a fee like this already in place it makes sense to offset other costs and other operating costs that the city has so Mr. Olson well it's just as a it's a merchant I get a little nervous when they just to start adding fees to the cost of those buildings because the cost of that is going to be passed on to whoever's going to rent the building right and that person therefore is going to have to put his prices or whatever accordingly and the other thing what about the shopping centers when well that's not new but they rebuild a great big section of it for examples are probably going to do to the seers in the one downtown is that new do they pay or is that just a remodeling no it would be a one-time fee they're you know going back to the question of if they're just remodeling they're not changing use this is currently as proposed only on new commercial development not remodels or even reuse at this point if for example the seers building were demolished and a new commercial development popped up or something like that that would be considered new commercial development to give you some idea of you know firstly again this would be a one-time fee you know to the developer generally these things are not it it wouldn't exactly affect rents of commercial space down the road in comparison to sort of some of the other impact fees perhaps but in looking at the past since 2016 to to date 2019 at the commercial developments that we've had within the city and looking at just the three dollar per square foot it would only generate about seven hundred almost seven hundred seventy thousand dollars looking at 2019 alone we're only looking at about 350 thousand dollars so it's not a substantial amount again the impact on a development of three dollars per square foot one time built into land use is not something that we've heard from developers would tip the scale I believe that if if a remodel is being done and it's going to be let's just say a 75 percent remodel however that might be faith that they should be responsible for carrying part of this load as well as the people who are building new construction yeah so one of the questions that came up in discussion with the planning commission and the developer community is what is the definition of new development certainly new construction but retenantine with a more intensive use however that might be defined and that would be something we might want to consider in this ordinance is in retenantine with a more intensive use is that considered new development subject to that one-time fee can you go back to the slide we're looking at different product types so go back to where you're showing there we go so this shows that to achieve the rate of return for a hotel 11 13 and a half higher because it's you're you're operating a business versus retail restaurant and running real estate and this is part of the same that the hotel has had the ability to take on this fee and still is is that what this show that's correct I did a really bad job explaining that I apologize I had it in my head where you were going yeah okay thank you so are we looking at to adding a three dollar fee across the board regardless of a prototype you know I say Justin is that is where it makes most sense to at least start the conversation you know it is not uncommon to have a flat fee regardless of a prototype but and and that is indeed what was shown in the study but we do have the option to vary based on prototype so you could have three dollars for hotel you know and go last for retail restaurant and three dollars for business park of the capacity you know as it shows here allows well I think the key thing rather than the dollar amount that's imposed is the fact that one a fee would be imposed at all so how soon would this be reevaluated in terms of whether or not that three dollars would be the correct number so like the inclusionary ordinance five years it gives some you know run time for that fee to be collected to understand what it's doing it could be revisited at any time but to have that kind of a review benchmark time frame in the ordinance would probably be a good idea to trigger it I would recommend that it would be much shorter than five years for the for the inclusion and to look at instituting the fee at all to have a review within maybe two years to see what that looks like and see how it affects vacancy rates or affects development at all but the commissioner Olson's point is very valid if you've got retail which is going through a shrinking right now in terms you can see it in terms of the regional malls and what's what the vacancy rates are that space is going to be retentative for a commercial use to the extent that I don't know what that series building could release for now versus if it was subdivided or retentative in a different use it would generate a heck of a lot more rent hopefully and whether or not that could be looked at in regard to being able to have this fee for a retentative use because having a development coming in and looking at a building that was underutilized and spending money on it to make it a better usage would only be done to the extent that it can charge more rent and it is technically not new development but in the sense it is but I I don't know where the benchmark is on this this tells me that a hotel could take on more of a fee than retail hospitality hospitality is doing well right now business parks and retail are okay but to stratify the fee at different based upon these different product types this this chart is important to look at the state that the flat fee for each each type is probably not appropriate and I would recommend a shorter term to have a reevaluated because again it's more important that a fee is being introduced at all versus what the specific dollar amount is I agree that there needs to be a review center particularly since this is a new fee and unknown consequences I suspect that if you looked at that number 20 years ago hotels wouldn't have been able to well hotels would be more burdened by a the fee 20 years ago than they are now you know things have changed substantially so it's like we talked about with housing interest rates go up demand goes up and down I think that's going to be at least as volatile for commercial as it is for residential it probably more so also the other slide where it shows the other communities I was looking at Petaluma in particular because Petaluma I don't you know more about this than I do but Petaluma seems to be a juggernaut in terms of commercial development for its size probably punches above its weight is my guess seems to be just you know closer to San Francisco and you know has a lot of benefits that allow for commercial development to take place there even though smaller there was a bit of compression having to do with that and availability of land where actually we carry again even in commercial retail restaurant personal services we carry the bulk in the county and our land is more for those parcels built out okay so so for hotels there so are they trying to encourage hotels of Elma by having a lower fee first curve um you know I haven't talked to them specifically about this but that would be my guess I mean for a long time they did not have any hotel or very few hotels or maybe a couple boutique hotels and they they do now but this fee has been in place I believe for quite a while do you want to come and speak to that um you know again it uh yeah it's just interesting because hotels which should be able to absorb the most have the smallest the lowest fee and retail which in Santa Rosa's case can absorb the least has the highest fee in Petaluma so I can't speak to exactly what drives the difference in Petaluma but I can tell you that the maximum justified fee for a land use is driven by the the employment so it's the workers the the category of workers by each land use need for affordable housing so that impact is typically measured highest for the retail category so just because of the the income categories and the workers need for affordable housing um retail is often a higher impact so it may be that that is what you're seeing here that it's more based on impact than any sort of market-driven desire to incentivize a certain uh land use just as technical information the retail category typically has the highest maximum everything go hotels would be pretty low and then and then hotels has um it has a mix of income categories actually there's management and service workers in hotels and then office often has the highest income so therefore the lowest impact by this by the typical technical analysis but I can't tell you specifically about Petaluma well it's just intriguing because it looks it looks very scientific you know two dollars and 42 cents for four dollars and 70s you wonder what's behind that that's probably a vestige of when the fee was put in place and then it's tied to an index so it was maybe put in place at two dollars and over time it's gone up to a number like that but I can't again I can't and that argues for the for the more more frequent and sooner reviews you know maybe fine fine too you know I so there isn't a concern about not being as competitive because of if we have this fee too but maybe if Petaluma that would be a competitor for commercial development no we're not we're not concerned about that all right so I think you got uh supported over that and what other questions did you have there or so I think you have a pretty good enough input from us I believe so I think you hit um what we needed and thank you sir for the clarifications okay yeah all right are we finished with this well here's the closing slide okay um so we're we're now here at the 26 tomorrow if you wish to uh voice some concerns that you had not thought of today you certainly can reach out to me or you can come to the meeting to study session we will take this material this feedback and craft a ordinance both inclusionary update ordinance update as well as a commercial linkage fee with the for a recommendation for a city council we're targeting the october 1st meeting date and I would say thank you very much for your time and input today and very helpful and it just occurs to me in particular with the housing allocation plan and the inclusionary zoning part it's going to take a lot more work and the fine-tuning of all of that there's still a lot of work to be done I'm not sure that process will look like who will be involved but it'll be interesting to follow that as it goes forward so thank you for the presentation today and I do want to make sure that I allow for anybody in the public who wishes to speak to do so at this time yes I have a gentleman there's a microphone up at the top of the stairs and you can give us your name and we have three minutes and thank you thank you uh my name is Rich Wallach with Burbank Housing and just wanted to provide a nonprofit developer's perspective particularly to the inclusionary housing ordinance and some of the comments today I did attend the workshop that Andy held earlier in the month and it was very helpful to hear the perspective I just want to mention that I we're definitely very interested in promoting partnerships between for-profit developers and nonprofit developers and as Jeff mentioned I mean there's a lot of restrictions on tax credits that limit the ability of affordable housing to be used to its greatest benefit when it's dispersed in a project but that having it adjacent to the project maybe incorporated in the project in a separate building can maximize some of those benefits works better on larger land sites particularly out in the neighborhoods than downtown specifically because downtown mandates higher cost of construction sometimes a you know higher cost per square foot of construction that would limit the ability of affordable using units to be feasible when when looking at off-site I mean definitely an affordable development needs more than just land dedicated so I think that the more that there are these partnerships where there can be a portion of a fee as well as land combined to make a housing development successful would make a lot of sense another point around that is that having it be part of that partnership means one entitlement process versus say a second entitlement process on a separate site at a later time and if the interest is in creating as much development quickly as possible that also brings the the partnership idea to benefit in terms of the inlu fee we agree with not having it be a sliding amount per square foot I'm not sure $10 a foot is the right number we like a lot of fee but we also want to incentivize that the projects are feasible and so we've seen in other communities as well that sometimes these inclusionary models actually do stir development and hopefully come up with the right figure that will make developments move forward and potentially include an affordable component I don't agree with the differentiating of unit finishes whether it's mixed into a development or separated from the development affordable housing wants to be seen as something that does not offer less in terms of quality or finishes I think that was addressed as well so thank you very done so I encourage you to put your comments in writing and make sure that the city council get those get that information as well as the staff anybody else wish to speak if not let me ask the board I know we've been going out for a while I'd like to take a little break or you want to keep on going anybody want to take a break looks like everybody's ready to go staff's okay okay so we'll move to the 4.2 on the agenda which is the housing authority retreat discussion and there that was brought up a few meetings ago I think by commissioner Downey we've had those in the past probably I'm thinking that probably Mr. Downey Mr. Olson and I are the three that have experienced those in the past so what is the desire of the housing authority in terms of having a retreat and Mr. Gwine I would think that would be sometime in the fall maybe we'd be looking at yeah should the housing authority want to set aside either a Monday afternoon a regular meeting or a different day based on the workload demands of the city council the earliest we would staff would be a resource to help form it would be probably early fall so let me hear of your level of interest in doing that and also if there's volunteers for a committee if we wish to go forward with setting up some form of a retreat workshop yes i was in the context of an in-service after completing the I believe it was a sexual harassment training one of the takeaways I have from that experience is participating in an inclusionary environment where everybody feels welcome and I think that an in-service could certainly contribute to that within this governmental process as well as the people who are coming to this governmental process to seek counsel and or clarification so you would like to have a session where that would be one of the items on the agenda is that what I'm hearing commissioner Danny yes and I believe it had to be some sort of an in-service as opposed to a retreat if I remember correctly so that we're not invoking some sort of you know exclusive environment we're only certain people are welcome at least that's what my takeaway was last year commissioner test as a new member um I think it would be very helpful and I know being on a couple of the ad hoc committees we've run into some things that really need to be maybe explored a little bit more together I would like to see a situation having a retreat or whatever it's called I think it would be really helpful commissioner morgan johnson I also believe that it would be helpful as a newer commissioner um I think that it would be good for us to be able to um clarify our group goals and have a discussion around that yeah I think uh I think that one of the things that was done that might be helpful in one of the past um sessions was to have kind of a a terminal talk about terminology in the programs and kind of an overview that was particularly focused on the new members I don't know how necessary that is but um Dave as I remember that wasn't didn't take a lot of time um I think as I recall is when we had a little retreat at legends I think he went over some of the kind of the essentials of the programs and just like a glossary of terms at that HUD and the state use yeah I think we put together a little cheat sheet and I don't know if that's if how much of a benefit that would be I mean you know you've both been around uh this environment for a bit so maybe that's not necessary but if you do feel it is we can ask we can ask staff to do that yeah we can and the committee can drill down on that too yes commissioner well commissioner Olson how do you feel re-enthusiastic about this I think I think it has value but it has to be a very very tight agenda otherwise uh I don't know if I don't think we need to just go and sit and and talk about things in general I think if we're going to do it we need to be a very tight agenda and we need to keep to it okay commissioner on more a question for city attorney we have this brown act fager into something like this this meeting would be a brown act meeting would be open to the public and noticed in accordance with the brown act I'd agree with commissioner Olson they keep it tight and and on focus and make sure we don't stray away from topping yeah the it sounds like there is an interest to explore this we would be having the chair appoint a ad hoc committee to work with staff come up with an agenda of substance in a location and probably even perhaps a facilitator that could keep us on task if that would be desirable so those would be things we would explore in the committee yeah I think last time we used this staff facilitator paul is that his name he did a very good job of kind of guiding us through in a pretty efficient fashion thank you okay uh we'll then move to uh 4.3 on the agenda which is a housing anti-discrimination ordinance and we have uh carmelita howard I believe making the staff presentation you know what carmelita um tease up the slideshow I'll just provide a little bit of context this is in the council goals under their housing action plan they had a dot an anti-income discrimination ordinance and we spent some time talking directly with immediate stakeholders the norbar the northern bay area of reliters the california apartment association and they were um wanted more time to explore the ordinance and make the possible impacts and so when they that another public testimony from the august 13th city council meeting that i made you aware of uh decided to add a month so that we had a chance to loop out and revisit this with a more broader stakeholder groups and so with that new timing we have a chance now to sit down with the housing authority and share what their thoughts are on this ordinance and get your feedback so we can share that with the city council as well and you're going back to the city council on the 29th of september oh thank you yeah the schedule to go back as a action item to the city council on september 24th fourth yeah good afternoon board chair uh steve berg and members of the housing authority board my name is carmelita howard deputy director for housing and community services and beside me is uh rebecca lane the manager for the housing choice voucher program we are here today to present to you what we had brought to council for consideration to adopt a city ordinance that will prohibit rental housing discrimination based on the source of income which includes our housing choice vouchers and other rental subsidies the proposed ordinance would make it unlawful in the city of santa rosa to discriminate against tenants in rental housing based on their income source of income either in the application process or as residents the ordinance defined source of income as any lawful source of income or rental assistance from any federal state local or non-profit administered benefit or subsidy program including and not limited to the section 8 housing choice voucher program the language in the ordinance was based on similar local laws that have been enacted in other jurisdictions here in california some of the background addressing housing needs is a tier one council goal and council has established a comprehensive housing strategy that includes prohibiting rental discrimination based on source of income there are 16 other jurisdictions in california with local ordinance addressing the treatment of rental housing subsidies more recently in june of this year the city and county of los angeles past source of income ordinances in the north bay the county of marina and other cities of fairfax novato and san rafael have all established ordinances the prohibit rental housing discrimination based on the source of income this ordinance is aimed to protect and increase affordable housing opportunities for our residency santa rosa will be the first city to prohibit discrimination based on source of income if this ordinance is passed city council has allocated funds to address homelessness through the rapid rehousing program and through the rapid rehousing fund allocated to catholic charities this is the money that is used to house our homeless that have gone to continue um or continue care the funding is used to fund rental assistance as a form of subsidy in the addition to the funds to the funds allocated by council the housing authority board through the housing and community services have enacted policies to support the city council in its tier one goals to address and prevent homeless issues by allocating 24 vouchers set aside for referrals through our homeless service providers and 48 housing choice vouchers for fire referrals through our today rock that is the county program that is working with our fire survivors so these are the these these are the vouchers that you have approved that's now being used for the homeless and our fire victims the housing authority portfolio also includes 414 vouchers that we have received for our homeless veterans and we have an additional 1400 vouchers in general of housing here in santa rosa that's allocated to us we pay about two two million a month in rents to our landlords here in santa rosa just shows you the impact of the program to the city the housing choice voucher program and programs like it are cost effective alternatives to government funded housing that makes existing privately owned housing affordable and give families the choice to locate housing that meets their specific needs and preferences so our goal is for our clients to find housing that they like however even with a guaranteed rent payment tenants may find their opportunities limited since property owners may refuse to participate the rental assistance has been made available by council and through the housing authority is currently underutilized due to several factors including grants that are higher than the program limits can approve increased competition between tenants for smaller number units available here and landlords who choose not to accept the rental assistance as a form of payment for rent all of these factors limit the effectiveness of programs that are intended to make housing affordable and accessible to our low income residents the ordinance before 11 states and more than 50 local governments has passed source of income protection laws that prohibit property owners from refusing to rent to voucher holders solely because they will use the voucher to help pay the rent nationwide analysis of these jurisdictions have repeatedly demonstrated higher success rates for the voucher programs compared to those that do not have this protection for our voucher holders the proposed ordinance would add would add to the santerosa city code and it will be titled housing anti-discrimination code it would define income to include rental assistance from any federal state local or nonprofit subsidy program as well as any other lawful form of income such as wages pensions or social security which are already protected under california law the subsidy of our clients is not protected under california law that's why we are requesting the council to approve this the proposed ordinance would make the following activities illegal when they are based on a tenant source of income refusing to rent based on source of income including the use of a rental subsidy impose restrictions to the rental process based on software source of income refuse services because a tenant is using a rental assistance program or makes statements that indicate a preference or limitations such as those sometimes seen in rental advertisements where the lease of qualification includes the words no section eight it is important to note that the ordinance does not prohibit landlords from screening tenants for standard lawful factors such as credit worthiness or rental history the property owners can still use their tenant policies to decide who they want to rent but we would just like them to consider our section eight clients and use their subsidy as a source of income instead the ordinance requires that a tenant is otherwise qualified for the rental that they must be treated equally and fairly in the application process the ordinance requires the property owners include the rental assistance payments like I said when considering the tenants income to determine whether they meet the income standard which is similar to existing source of income protections what are the fair housing implications in addition to the impacts to councils affordable housing efforts this ordinance also addresses some fair housing issues state and federal law requires the city of santa rosa analyze identify and address impediments to fair equal and affordable housing the ordinance based on national studies create opportunities for low income clients to compete for housing and improves the concentration of voucher holders to move to better neighborhoods and this is one of the reason why they change the housing choice the section eight program because it became housing choice voucher to give our voucher holders a choice to where they want to go what are the fair housing implications when rental housing providers are permitted to enact policies that exclude rental assist program participants fair housing questions are raised because low income renters who qualify for housing subsidies are often members also of other classes of people who are protected under fair housing laws such as people with disabilities people of color and families with children policies that deny housing opportunities to applicants using vouchers may they therefore have a disparate impact on those protected classes and in practice discrimination against voucher holders could be used as a proxy for illegal forms of discrimination protections for santa rosa tenants in rental housing programs will both affirmatively further fair housing and address our affordable housing crisis what are some of the ordinance decision points that we have to consider these are some of what the other cities have done is Palo Alto Fairfax Los Angeles County Novato San Anselmo San Diego and San Francisco exclude rentals with shared space so if somebody lives with a property owner they will be excluded in Corte Madera it only applies to properties with 11 or more units in mill valley it only applies to properties with six or more units and east Palo Alto it only applies to owner occupied properties um non-owner occupied properties with three or more units in San Anselmo it will only apply the same as Palo East Palo Alto it will only apply to non-owner occupied properties and also San Francisco has the same law other ordinance decision points almost all local non-discrimination ordinances include non-profit administered programs so what we mean here aside from subsidy from section eight we would like to include for example the funding for the rapid rehousing program so that anybody who uses the rapid rehousing voucher that is used for our homeless residents can be can be used to as a source of subsidy exemption and a number these are some of the ordinance decision points and a number of these jurisdictions provide for private action only and also a number of jurisdiction limit the damages to 200 to 400 per occurrence but allowed for punitive damages when appropriate sv 329 so this is a um this this is a policy that has passed the senate and um and the ordinance is now pending in assembly and it should go to the assembly before the september 24 time when we have to go back to council to discuss this item so this is um the conclusion of my um study session and we are here to answer questions thank you carmelita and dave for the presentation so if sv 329 goes forward it would essentially be a state law and state law would it to what degree would it be different than what's being proposed here um it will basically oh so maybe so can would supersede what a local government could do or it would likely be found to supersede any local ordinance um it does as it's currently written it does apply very broadly excludes only a single border within an owner occupied single family home so it all other rentals sv 329 would apply and uh it does include federal state and local housing uh subsidy programs it does not address um nonprofit um uh programs uh and subsidies uh that would be one area where perhaps our own local ordinance could be broader than state law again at this point until that language of sv 329 is finalized we won't be certain as to whether it'll preempt a local ordinance uh you know a slightly broader local ordinance um i did check this morning it is scheduled to be heard in the assembly appropriations committee on i believe on the 30th on august 30th um so we we should know within a few days as least as to whether it's going to move on and move on to the floor of the assembly yeah so there's still questions about and then is there any anticipated time where it might get to the governor's desk if it makes it through the if it if the i i'm sorry i don't have the dates exactly in my mind but the um legislatures term will end soonly within soon within the next few weeks so the the um legislature will have to have acted by then and then i believe that the governor has um maybe 60 days to sign legislation i think by early i'm not sure i'm thinking october at some point we would know whether it's whether it's signed um so so the time our timing is it necessarily our timing we'll know by the time we go back to council we'll certainly know whether it's past the legislature um we won't know we may or may not know where the governor has signed i'm just because i'm thinking if the city council hadn't have had this as a high priority and knowing that this other thing was coming along that the timing might have been a little different in terms of yeah okay thank you um i should remember so let's start down here looks like uh mr owen do you have your finger on the mic button just from a procedural process on how this works so the hcv you have a resident that has a housing choice voucher and they qualify with with the landlord when does the landlord receive that payment when the first of the month or how does that work good afternoon commissioners rebecca lane manager of the housing choice voucher program so the answer to that depends on what month we're talking about so when a tenant first moves in there is some paperwork that we do need to get from the landlord um it's pretty basic we have to have them sign the contract the housing assistance payments contract we also need to collect from them a w9 if they're not already a vendor on our program so that we can send them the funds so depending on when we get that back we present all that information at the inspection and if the person who's there at the inspection is authorized to sign those documents then we can get it all out the door pretty quickly and the first payment will go out within several days of the inspection but if we have to wait on any of that coming back we also need a copy of the um rental agreement that the landlord signs with the tenant uh so that first payment is always the one that takes the longest to get and it's usually because it's associated with the paperwork but after that our payments go out between the first and the third of every month depending on whether the first or the second or the third is a business day so would the landlord have the ability to and where i'm going with this is is is to make it advantageous to a landlord to know that they're going to get their payment on the first business day of the month and mind you that when you talk in inspection are you inspecting the property we are the program regulations require that before we start a subsidy that the property the unit that the tenant is residing in and the surrounding area where the tenant would be accessing such as a backyard uh passes the inspection passes an hqs inspection housing quality standards inspection which is the the HUD standard uh inspection requirements so that does have to happen before we're allowed to start making our payment but if we go in the the tenant wants to move in on the 15th of a month and we get there on the morning of the 15th the the tenant can be there and it has literally happened where they're waiting in the driveway with their stuff uh to to move in as long as it passes inspection that's fine and what happens that the property does not pass inspection we give the landlord or the property manager whoever's there on site a memo with exactly the items that need to be repaired and we let them know the tenant and the landlord know that as soon as these items are are repaired and we've either been able to verify that in person or with a certification from the landlord that the items have been uh repaired then the tenant will be allowed to move in and will make the payment effective on whenever the contract starts after that date so if it passes on the 16th then we'll start the payment on the 16th okay because to the extent that you have a landlord that has a quality project that's going to pass the inspection there's more hassle or pace of paperwork up front but if the landlord is going to get their payment and the tenant as as this was presented qualifies as any other tenant and could be evicted for a reason that any tenant could be evicted which is sounds like what the the ordinance is is going to be put in place this this seems absolutely fine in regard to having the landlord understand that they're going to get their payment whatever portion that is of the payment two-thirds one-third 90% whatever the number is on a much more reliable basis that would be advantageous to to the landlord to receive that would the ordinance include whether if the tenant were to lose that voucher could they be evicted the ordinance does not address that but the the regulations about the housing choice voucher program do so the housing authority in the case that a tenant is going to lose their subsidy for whatever reason the housing authority notifies or the staff notifies the landlord and the tenant at least 60 days in advance and that gives the opportunity to the landlord to issue a notice if they wish to have the tenant vacate if the housing assistance payments contract is terminated in many cases the reason for the termination of subsidies because the family is earning enough income to pay the entire rent on their own and then that case that wouldn't be necessary to be up to the landlord to decide if they want to continue renting to the tenant one of the things we heard from the landlord group when we present when we had our meeting with them was they were concerned that for example the rapid rehousing or any other nonprofit subsidy might only be for six months so the ordinance was written and changed that the that you know the landlords can base their lease agreement on and the length of the lease based on the length of the subsidy so that you know to help them assure that there be protected because they were saying that you know we want to make sure that you know if the length of subsidy is six months they could use that as for their lease agreement because usually the lease agreements are for a year and then also HUD requires us to inspect the unit 10 business days so you know we've heard from landlords based on our presentation to council that they were worried that you know that sometimes it takes us a long time we use we will we have to inspect the unit within those 10 days but also if we know a client is moving sooner than the required you know length of time that HUD requires us we always try our best to inspect the unit so our client can move in our goal always is to make sure that our clients find housing and with this market we make sure that we will do everything we can that you know to expedite all the paperwork and everything with our landlords. So I would add to Carmelita's comments that in the political theater that the city council operates in it you know it doesn't resonate to hear 10 days that's still too long and so we're researching what is our average response time to do an inspection what is our average response time to get it under contract so we have that fact when we go back on the 24th. The other piece of feedback we got when we visited with property owners is there's a lot of assumptions about the voucher program a lot of misunderstandings about how it operates and also stereotypes of our client base for those of you who might have seen the meeting there was pretty much a quick pivot to comparing voucher holders to homeless individuals needing risk mitigation pools things of that nature but the feedback in later meetings with the ownership group is to really aggressively market what the voucher program is in ways we never imagined before and we have an opportunity to do that under this new realignment in the city operations there's a group now called under our communications and marketing coordinator that we're bringing in folks from other departments so for example if you work in water you have a person dedicated to promoting water conservation things of that nature park and rec promoting you know recreation programs the community guides to to sign up for things well if we can bring in that talent pool have them get to know us have them get to understand the program and come up with a product that we can then promote out to the community property owner have a campaign go and we were really attracted to that idea so I just wanted to share that as a possibility that we would be reporting that to the council in a month the one where is the teeth in this in the words it's on yeah where are the teeth in this in other words what happens if they do refuse to take the section 8 voucher and that's you know the person come to the city and says hey they won't take my voucher what happens then so since as a housing choice voucher program we have to be in the middle we don't want to be looked at as siding with the tenant or with the landlord we what um usually happens now when tenants have issues with a landlord or have some questions about the program we will refer them to fair housing and usually they will um you know ask help from legal aid or california rural legal assistance so there are a lot of nonprofits that work with them and also fair housing but there is no fine by the city in the words yes thank you yes the as it's currently drafted the ordinance does allow for aggrieved individuals to file suit and to recover damages um and also I believe attorneys fees as well yes um um uh it also gives the option for the city itself to file suit against a landlord that has discriminated against a section 8 tenant or other a person on the basis of source of income and then it also allows any other individual or entity that can fairly represent a tenant can also be the moving party in a lawsuit for an injunction so there is an opportunity for damages and for recovery of attorneys fees that's an extended period of time uh and in words it doesn't help them a lot if they're trying to find a place to live in they won't take the second date and they think they can take them to court but that'll be 120 days or more in the meantime they don't have anybody there is no short uh there is nothing within the city's status that the city can call and I guess not I mean they're in time to be in court but that's a pretty slow process well there's two elements one is to go in for an injunction so you could move an individual could move in court for a preliminary injunction or a temporary restraining order those are going to be a little more difficult to obtain so you are correct that in order to recover damages is going to be a longer process in court and going through court we would hope that not only does that ultimately provide some relief to the individual who's been discriminated against but that also sends a message to that landlord and to others that there are ramifications to a discrimination thank you sure and if I may through that through the chair I just wanted to I spoke earlier about the legislative session in SB 329 I did quickly check the 2019 legislative session ends on September 13th so that is about three weeks away and the governor will then have 30 days once the bill arrives on his desk he will have 30 days to either sign or veto or allow it to move into law without a signature appreciate that as a hypothetical low-income tenant uh what do I need to demonstrate that I've been discriminated against beyond a feeling beyond a hunch beyond something verbal he said she said what physical evidence do I need to show that I need to consult with you soon to get some help because this is indeed a legitimate situation yes and we do recognize that these cases are not going to be often they're not going to be easy to try and to win certainly any advertising that suggests no section eight tenants that would be clear evidence of a discrimination otherwise we will would be looking at the specific evidence of the qualifications of the tenant that obtained the rental unit versus the tenant who has been using either voucher or other subsidy program but it's going to be difficult because the ordinance does not preclude the landlord from looking at other elements so rental history creditworthiness those kinds of elements and we recognize that those are some kind sometimes going to be different difficult evidentiary issues some cases may be easier to win than others I wanted to add that I think another issue that this always seems to be a problem is that landlords are not required to use one standard application so your application can ask a lot of stuff that you know would seem like they shouldn't be factors I know that some landlords don't want people who work night shifts or things like that where they're going to be away from the house they'd rather have their tenant be around during that time or you know especially if it's a situation where the landlord um lives on site say they have the you know other half of the duplex or something like that they'd rather their tenants work during the day when so they would have the daytime to the house by themselves and things like that so that's that's a problem as well because you can see on the application if if someone says that they don't have a job they're more likely to have a subsidy and then they can just simply say it was for a different reason however it's clear that you know they don't they look on there and they see that the person doesn't have a employment that they can verify and they're most likely to think that they're going to have some kind of subsidy but also I wanted to know if a prospective tenant is going to seek an injunction against someone that they believe has discriminated against them because of their voucher is that going to go through landlord tenant court or would that be