HomeMy WebLinkAboutAffordable Housing in lieu fee for new residential projects 3 �3
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HUNTINGTON BEACHI
CHAMBERS y
COMMER E h
I�p E� n
May 4,2007
Mayor Gil Coerper
And Members of the City Council
2000 Main Street
Huntington Beach, Ca 92648
Dear Mayor Coerper:
We understand that the City Council will be holding a public hearing on Affordable
Housing In-Lieu Fees at your meeting on May 7, 2007.
The Chamber has followed this issue for many years and has submitted previous
recommendations to the City Council.
Although we did not have the opportunity to discuss the current proposal coming before
you, we strongly urge you to only go forward with the change in the ordinance for
subdivisions with fewer than 10 units, if the fee can be based on the rental housing rate.
Since a great deal of time has been spent by our committee in submitting previous
recommendations, we urge the City Council to schedule another affordable housing
committee meeting to discuss our recommendations and to strongly consider adoption of
an ordinance that allows for an In-lieu fee, for affordable housing, be an option for all
residential projects.
We will,have committee members attending the May 7 meeting.
Sincerely,
oyce� (�C �J�C� -?6 J President
JR/sj
19891 Beach Blvd.,Suite 140 • Creating a strong local economy
Huntington Beach,CA 92648 • Promoting the community
(714)536-8888 • Providing networking opportunities
(714)960-7654 Fax Representing the interests of businesses with government
www.hbchamber.com • Political action
u
HUNTINGTON BEACH
CHAMBER°
COMMERCU,
�• ® ' �' April 18, 2006
Mary Beth Broeren, Principal Planner
City of Huntington Beach
2000 Main Street
Huntington Beach, Ca 92648
Dear Mary Beth:
Over the past fifteen years, the Huntington Beach Chamber has been working
with the City to implement better methods of addressing the communities
affordable housing needs. It has always been recognized that affordable housing
should be a shared obligation between public and private interests as neither the
development community nor the City can effectively address this important issue
alone.
The following comments, issues and policy suggestions reflect current chamber
concerns, although many of the same issues were discussed and presented in
1992 through the City's Affordable Housing Task Force.
The Chamber believes that in order to implement a comprehensive approach to
affordable housing a variety of options must be explored. The City's current
inclusionary requirements are too restrictive to address the variety of affordable
housing options that could result in more effective solutions. State laws effecting
housing have changed and are constantly being refined. The local policy makers
in the community have also changed and the time is right to develop new
strategies and programs that truly address the communities housing needs and
not an arbitrarily imposed goal based on the regions desires.
Huntington Beach is 97% developed with relatively few sites remaining for new
affordable residential developments. The City should expand the opportunities
for new affordable housing by establishing additional sites for higher residential
densities. The City should also consider mixed use residential within commercial
and industrial projects. Currently the mixed-use option is limited due to the lack
of a City zoning code to regulate mixed-use projects and the City's adopted floor-
area-ratios in the General Plan.
Rental housing should be the primary means of addressing the communities
affordable housing needs. Payment of an in-lieu fee, into a special fund,
19891 Beach Blvd.,Suite 140 • Creating a strong local economy
Huntington Beach,CA 92648 • Promoting the community
(714)536-8888 • Providing networking opportunities
(714),960-7654 Fax Representing the interests of businesses with government
www.hbchamber.com • Political action
:v
s.
City of Huntington Beach
April 18,2006
Page 2 of 3.
provides opportunities for the City to pick and choose how affordable housing
money should be spent to provide programs that are not otherwise available.
Developers should be able to satisfy their obligation by providing the units on-
site, off-site (within an existing development) or by paying an in-lieu fee.
• Provide Units On-Site: This option is more easily accomplished within
medium-high to high density projects of 50 units or more. New market
rate apartment projects might also be able to provide affordable units on-
site.
• Provide Units Off-Site: New for-sale housing projects may be able to
secure existing apartment buildings in other parts of the City that are
adjacent to shopping, transportation or employment centers. This City has
a number of "at risk" affordable apartment buildings that could be good
candidates for this approach while maintaining existing affordable
apartments.
• Allow For an In-Lieu Fee Payment: This option should be available to all
new residential projects. By far, an in-lieu fee payment provides the
community with the greatest flexibility in addressing the wide variety of
options. This option will require a greater level of participation on the part
of the City.
In the recent report prepared by Keyser Marston Associates for the City, the
affordable gap in a rental project is estimated at an average of $105,000 per
income-restricted unit for very low and low income households. At the current
City inclusionary requirement of 10%, this equates to an in-lieu affordable
housing fee of $10,500 per market rate unit.
In order to guide the City through the affordable housing implementation process
the current Housing Element of the City's General Plan is in need of an update.
Housing Elements are required to be updated every five years.
The City's housing Element was adopted on February 1, 1999. The goals,
objectives, policies and implementation programs need to be evaluated, the
efficiency of such programs gauged and the entire Housing Element amended
with new implementation mechanisms that will allow the City to meet identified
housing needs, with a particular emphasis on City workforce housing for police,
fire, teachers, nurses and hotel/tourism employees. The housing Element
update should include mechanisms to:
• Fully implement the state's new Density Bonus Law (Government Code
section 65915 effective January 2005) as an incentive to integrate
affordable housing units in market residential projects.
r .,. '�, •� n �` E`�
iAw`e-.. «..
Mary Beth Broeren
City of Huntington Beach
April 18, 2006
Page 3 of 3
• Facilitate mixed-use and in-fill development through rezoning of struggling
retail and industrial areas throughout town, with particular attention to
Beach Boulevard and other commercial corridors.
• Amend the Land Use Element of General Plan and Zoning codes to fully
implement the adopted policies in the Housing Element.
These suggestions will better address the communities needs for providing a
greater variety and affordability of housing options. The Huntington Beach
Chamber Board encourages the City to take a broader view of this important
issue. On behalf of the Board of Directors, we will offer to assist the City in any
way possible.
In addition to the broader aspects of affordable housing presented in this letter,
the Board would also like to express comments on changes to the existing
Affordable Housing Ordinance (Sec.230.26). Attached please find specific
suggested changes to the current ordinance which are consistent with the
preceding discussion items in this letter.
Thank you again for the opportunity to address this important community issue.
Sincerely,
Huntington Beach Ch mber of Commerce
Jo ce/ , iddell
esident
cc: Mayor Dave Sullivan
Gil Coerper
Keith Bohr
Debbie Cook
Cathy Green
Don Hansen
Jill Hardy
Penny Culbreth-Graft
Paul Emery
Howard Zelefsky
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regulations that require an EIR SB 427: State Senator Tom Harman claims his hill of in Orange County," Harman
to examine project alternatives : will help stop urban sprawl. t told the OC Voice,
as well as growth inducing and Harman says that the bill is
cumulative impacts. I mentally sound and -,vhy other it—that a proposed development necessary because CEQA cur-
The short form. EIR is also ; such measures were not taken. I would have aii adverse environ- i i`eritly has "unintended conse-
exempt from currently required j CEQA's"fair argument"claus r_
e, mental impact, is also eliminated queces." He didn't have any
"findings" that indicate what i which requires the EIR to examine j from the new short form EIR. j particular examples in mind, but
changes have been trade to the ! any reasonable argument—with- f That would create a consider ', added that "frequently people
project to snake it more environ- ' out cost to the person making ? able financial burden, normally . See SS 427, Page 4
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By SARA ELLISj struggle to feed and educate their , gans for laissez-faire greed, after 1 Costa Mesa is once again playing
OC Voice children against the chaos raining : ivlavor Mansoor, Mayor Pro-fern Scrooge.
down from above. Eric Bever, and Couneilmember "uch afiffirdable'housing man-
n J.G. Ballar d s 1975 novel, The modern high rise, touted j Wendy Leece,with her clumsy pay- ( dares, argued Mansoor and his
Nigh z21se", cl.ss e� iiscious i like the free market as a great equal i an to the market—"they're entitled coattails,are too"last minute,"and
snubs and petnT conriplaints 1 izer,works only to aggravate class to Ariake as much money as they 1 might even,as suggested by Bever,
t,, 40-floor apartment corr:plex detr 1 loN est examples can"— nixed i inunigranrs. .`I've read that in l:�4
among the residents of a sleek, div is c rs, distilling them into the warm make, uh, if they feel they i roll out the welcome mat fei ills
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f riorate into-di out v,,ar. of han7an be- t�� state of California an afford- { Counts; 68 percent of all I-IUD
6 I i�of wanting ixil to illy tyl loss e j l�avior. will ire se in a specific able lousing � low cost housing is occupied yjy
classes into pools and, rooftop j Although inclusion for � (ilegals'," Bever said, dubiously,
requirement for the number
sculpture gardens ostensibly bulit exaggerated, all three of � "perhaps we need to push that -
for everyone, the wealthier resi } Ballard's Food- of affordable akle housing casts the city's new sue instead."
dents block elevator access,destroy ern Lord of to be provided within in the high isi resi- But Bever did not say i=ho ivill
the buildings elementary school, the Flies is a fit city;Costa Mesa, it can dential pro;- most like
6y build the aestheticalby
and emb-1A on nocturnal rounds analogy- for the quickly be estimated, is ects. � based "architecture" he spoke of
of vandalism:urinating into laur- t voting patterns ire ply eiaiemri Despite the ; in that AP Art History lecture he
dry chutes,strewing garbage in the of the reigning unflattering I graced on the public at the wine
hallways, and pillaging the apart ' majority in Costa Mesa's city i fact that surrounding cities such ! council meeting: "The buildings
ce Dlmdory ments on the lower floors. council chambers,particularly with as Irvine and Laguna beach all have actually function as art work them-
With no outside authorities regard to the city's own high-rise € inclusion ordinances, requiring ( selves,"he said,in arguing against
i called in for help, and the middle plans. i a specific percentage of low-cost builder fees to help fund art in the
floors struggling for a niche at the By now sound bytes from Costa ' housing units in new develop- "City of the Arts."
top,the building's poorer residents j Mesa's Jan. 16 Council meeting ments, or at least the in-lieu fees M a n s o o i s arguments
are left. defenseless, pitted in a i have become bumper sticker slo- 1 to provide for them elsewhere, i'See HOUSING SHMAGE,Page 5
Ifall into the very low income cateeory of
tuuttuers tau iiowltere near-lel"33t requireu .
by the California Housing Element,which
rt.4%fal' ShO, I sets the rent for a family with $40,000 per
year at$1,225 per month.
Currently low end rents for two beclrcxam, to %A's"h, et n�wwlcn
From Page 11 one bath apartments average at$1,393,and
for seniors and those on disabilitl;the hour- A New FREE Report Shows You Haw a 35 Year Old Crazy
1`ing situation is dire:listings from the Orange
against "last minute affordable housing 1 County Housing and Community Services Professional `'Suck U. "who lived OUT OF STATE Working
mandates" seem weak at best. As Coun- i Department, show Costa Mesa's "afford- Over 50 hours a week at his Dreadful Job Created Enough
cilmember Linda Dixon stated, developers i able" two-bedrooms as over $1200, with
are use,d to such ordinances."If one of these studios at a steep$825 per month. LTCOME FOR LIFE to RETIRE in ?ust 7Months......
projects decides not to do this [because of i At present,the sprinkler-free Bethel Tow-
housing fees],I would really be surprised." ers,which very recently escaped an inferno, outhern California — A new the boss for nee!"
Paul Freeman,spokesper- is the city's best example of report entitled"How YOU Can .j_ You will quickly learn how to start
son for Segerstrom,C.J.and affordable senior housing. 45Make $112,284 a Year (Every ! a real estate money machine that
Sons, one of the companies Built in 1966, the Bethel Year)from Real Estatd Investina without provides financial security and operates
constructing the high-rises, high-rise, with its years of Touching a SCREWDRIVER'has just 1 on auto-pilot. Discover 3 simple secret
confirms Dixon's viewpoint. dangerous neglect, is a fit released by real estate broker and author strategies to earn an extra $112,284
"At different times;" said reflection of the council's Rob Minton which reveals a new simple a year investing in real estate without
Freeman, in a January in- own desertion, not only. real estate investing idea that you can use having to fix up homes. This special
terview with the. qC Voice, of Costa Mesa's low and to make thousands of dollars without report will detail step-by-step how to
"we've proposed different middle-income residents, having to rehab, fix up or flip homes. I make easy cash profits buying_homes in
kinds of housing projects but the future of city itself. This new report shows why trying; to nice areas.In addition,while supplies last,
thatiha.d a range of prod- While whiling away in what buy run down homes and repair them you will receive an extra report entitled
acts from affordable to less � � affordable housing advocates for profit is extremely risky. "Special and Confidential Profit
affordable and it's pretty would call a free market The fact is that there is a new ( Report for Preferred Real Estate
consistently the case with fantasyland,Marsoor,Bever, way to approach real estate investing Investors ONLY."In this special report,
Costa Mesa that trxc major- and Leece are,it seen-is,only that provides substantial profits with you will see over 30local properties that
ity didn't want any t1�3.ng but delaying the inevitable. significantly reduced risk. Under d}is were purchased and the profits that were
the highest end, the highest Early this summer,,the approach, you don't need to spend all created.You will learn how J.Mercadante
quality housing." state of California will be set- of your time hunting down the deal of achieved financial independence in 7
Jean Forba , of the Af- ting a specific requirement the century or-your weekends fixing up j short months.
fordable Housing Coalition, Bethel Towers for the number of affordable run down homes. ! To have these special FREE.
believes that a '.lass based housing units to be provided According to J. Mercadante the reports mailed to you, call (949)
insecurity lies behind the council's narrow within in the city;Costa Mesa,it can quickly (Crazy Professional,Suck Up), `7 started 7 77-4610 and leave a message with
approach."It's more prevalent than the race f be estimated, is grossly behind. Previous investing in propeMtes using this strategy ; your mailing address. These reports
thing.They don't want to be looked on as a Regional Needs Assessment(RENA)goals in April 2004. I have accumulated 20 are only available while supplies last.
poor relation(to Newport Beach),which is -set nine years ago by the Southern California homes that combined will pay me over if your message is received at a time
fair,but(at the same tune)they don't want Association of Governments (SCAG) re- $4,000 each and every month.Plus I have when no reports are available, you will
to admit that they have poor people." quested 445 units;the city chalks in at 49. locked in$300,766 of profit in a few short be placed on a waiting list. Understand
While the high-rise structures may please "The new RENA numbers," estimates months. I plan on quitting my 9 to 5 job I it may take several weeks to ship
the city council trios "aesthetics", they'll Forbath,"are at 2300 units for the next five soon and will be able to live offthe income new reports to those callers on the
do little for the trio's dreams of making or ten years,but I think that's not even close fmm M properties!No more sucking up to waiting fist.
the poor people go away. Currently, over 1 See HOUSING, Page 20
THE ORANGE COAST VOICE / MAY 2007
Council/Agency Meeting Held: -
Deferred ontinued to: GC/IiZ�7X?-�
❑ Approved ❑ Conditionally Approved ❑ Denied it er ' Signa
Council Meeting Date: May 7, 2007 Department ID Number: PL07-12
CITY OF HUNTINGTON BEACH
REQUEST FOR CITY COUNCIL, ACTION
SUBMITTED TO: HONORABLE MAYOR AND CITY COUNCIL MEMBERS
SUBMITTED BY: PENELOPE CULBRETH-GRAFT, CITY ADMINISTRATOR{
r�c
PREPARED BY: SCOTT HESS, DIRECTOR OF PLANNINOV4L)
SUBJECT: Adopt Resolution setting forth an Affordable Housing In-Lieu Fee
Statement of issue,Funding Source,Recommended Action,Alternative Action(s),Analysis,Environmental Status,Attachment(s)
Statement of Issue:
Transmitted for City Council consideration is a resolution that establishes an affordable
housing in-lieu fee for new residential projects with three to nine units. Payment of the fee is
allowed by the City's affordable housing ordinance. Staff recommends the City Council
approve the resolution because adoption of the in-lieu fee will provide an alternative means
for developers of small projects to satisfy the City's inclusionary housing requirements. In
addition, there are three suggested improvements by Keyser Marston Associates to the
existing affordable housing ordinance that staff recommends the City Council initiate.
Funding Source: Not applicable
Recommended Action: H
_,
T�0
STAFF RECOMMENDATION: IIAKEN
Motion to:
1. "Adopt Resolution No. 2007-29 , a resolution setting forth an Affordable Housing In-Lieu
Fee as authorized by Zoning & Subdivision Ordinance 3687 Section 230.26."
(ATTACHMENT NO. 1)
2. "Direct staff to process a zoning text amendment to amend Section 230.26 to incorporate
recommendations outlined in the Keyser Marston Associates report, dated January 23,
2006 (ATTACHMENT NO. 2)." ID
REQUEST FOR ACTION
MEETING DATE: May 7, 2007 DEPARTMENT ID NUMBER:PL07-12
Alternative Action(s):
The City Council may make the following alternative motion(s):
1. "Deny the resolution setting forth the Affordable Housing In-Lieu Fee."
2. "Continue the resolution setting forth the Affordable Housing In-Lieu Fee and direct
staff accordingly."
3. "Direct staff to include additional changes in the zoning text amendment that would
modify the existing affordable housing ordinance."
Analysis:
A. PROJECT PROPOSAL:
Applicant: City of Huntington Beach
Location: Citywide
The proposed fee resolution represents a request to establish an in-lieu fee for affordable
housing, pursuant to Section 230.26 B.4 of the Huntington Beach Zoning and Subdivision
Ordinance. (ATTACHMENT NO. 4) The proposed fee amounts are as follows:
In-Lieu Fee Per Square Foot
Of Habitable Area'
Project Size Ownership Rental
No. of Units Projects Projects
Three $8.28 $4.48
Four $9.29 $5.04
Five $10.41 $5.60
Six $11.42 $6.16
Seven $13.32 $7.16
Eight $13.54 $7.28
Nine $14.55 $7.84
Habitable area excludes garage, porch, decks/balconies.
Developers of small projects (three to nine units) would have the option of paying the
"ownership projects" fee in lieu of recording a covenant on a unit in their project. Similarly, an
apartment project developer could pay the "rental projects" in-lieu fee. Fee revenues would
be deposited in a new account called the Housing Trust Fund; the uses of the fee are set
forth in the resolution and generally include a variety of widely-used financing techniques to
assist the development community.
G:\RCAs\2007\PL07-12(Affordable Housing In-Lieu Fee).doc-2- 4/23/2007 3:49 PM
REQUEST FOR ACTION
MEETING DATE: May 7, 2007 DEPARTMENT ID NUMBER:PL07-12
B. BACKGROUND
The City of Huntington Beach has had an inclusionary housing requirement since the early
1990s, as set forth by policy. In October 2004, the City Council adopted an ordinance that
codified this policy and established the option for payment of an in-lieu fee for projects with
three to nine units. Pursuant to the ordinance, the City retained Keyser Marston Associates
(KMA) to prepare a nexus study to calculate an appropriate and legally defensible in-lieu fee
(ATTACHMENT NO. 2).
The City Council reviewed the nexus study at a Study Session in May 2006 and formed an
Ad Hoc Committee to further discuss issues related to the analysis. The Ad Hoc Committee,
with representatives from the Chamber of Commerce, Building Industry Association and
Huntington Beach Tomorrow, met on July 25, 2006. As a result of the discussion, the City
Council Committee members directed staff to continue the processing of the in-lieu fee for
projects with three to nine units and provide information to the City Council regarding other
aspects of the affordable housing ordinance and in-lieu fee, such as allowance of a fee for all
projects and fractional calculations, Regional Housing Needs Assessment (RHNA)
considerations and rental versus ownership housing.
C. STAFF ANALYSIS AND RECOMMENDATION:
In Lieu Fee for Small Projects
The purpose of the KMA study was to calculate an in-lieu fee that developers of projects with
three to nine units could pay to satisfy their inclusionary affordable housing requirement. The
study quantifies the difference between market rate prices and income restricted (affordable)
prices in the City of Huntington Beach for for-sale and rental projects; this difference is
referred to as the affordability gap. The average affordability gap for ownership projects is
$437,400 and $105,000 for rental projects. The affordability gap is used to develop the per
square foot in-lieu fee, based on the City's 10 percent inclusionary requirement and the
average size of ownership and rental units. To account for the economics of smaller size
projects, KMA incorporated a 46 percent downward adjustment in the fee. The resulting fees
are listed in the table on page 2 of this report and range from $4.48 to $7.84 per square foot
for rental projects and from $8.28 to $14.55 for ownership projects. The recommended fees
include an inflation adjustment from the 2006 KMA study, as is presented in the follow-up
memorandum from KMA (ATTACHMENT NO. 3).
Examples of how much the in-lieu fee might be for sample projects are presented below.
Type of No. of Size of Each Total Project In-lieu Fee Total In-lieu
Project Total Unit Square per sq. ft. fee required
Units in (Habitable Area Footage
Project Only)
Ownership 4 1200 s . ft. 4800 s . ft. $9.29 $44,592
Rental 4 800 s . ft. 3200 s . ft. $5.04 $16,128
G:\RCAs\2007\PL07-12 (Affordable Housing In-Lieu Fee).doc-3- 4/23/2007 3:49 PM
REQUEST FOR ACTION
MEETING DATE: May 7, 2007 DEPARTMENT ID NUMBER:PL07-12
Staff and KMA believe that the nexus study presents a well documented, reasonable and
legally defensible in-lieu fee for projects with three to nine units. Based on input from
developers of small projects over the years, staff believes that providing an alternative means
to satisfy the City's inclusionary housing agreement is needed. Developers have consistently
noted concerns related to financing, monitoring, and qualifying buyers/renters as a result of
having to restrict one on-site unit in a small project. With respect to the specific fees that are
recommended for adoption, however, the development community has expressed that
calculating an in-lieu based on an ownership project is unreasonable due to the costs of
development, including land. Rather, many believe that the affordable housing in-lieu fee
should be calculated only using rental projects. As demonstrated in the table on page 2 of
this report, the in-lieu for rental projects is notably less.
Pursuant to the City affordable housing ordinance, in-lieu fee payments would be deposited
in a Housing Trust Fund. This fund will be established upon receipt of the first in-lieu fee
payment. The City's ordinance lists the uses for the Housing Trust Fund and restricts the
use of funds for projects that have a minimum of 50 percent of the units affordable to very
low and low income households, with at least 20 percent of the units available to very low
income households. At the discretion of the City Council, the funds may be used for pre-
development costs, land or air rights acquisition, rehabilitation, land write downs,
administrative costs, gap financing, or to lower the interest rate of construction loans or
permanent financing. The Economic Development Department would administer the
Housing Trust Fund.
Other Issues related to the In-Lieu Fee
The Ad Hoc City Council Committee discussed several topics related to the in-lieu fee and
requested that staff provide a review of these topics in this report.
Allowance of fee for all projects
The development community has expressed a strong interest in allowing all new residential
projects, regardless of size, to pay an in-lieu fee rather than directly providing the units.
From the developers' perspective, the ability to pay a fee has the advantage of being less
expensive, quicker, easier to get financing without affordable covenants recorded on the
property, and less cumbersome in that they do not have to manage screening affordable
buyers or renters. The advantage of this approach to the City is that monies would accrue
more quickly in the Housing Trust Fund, which would give the City more resources with
which to assist affordable housing projects. From the City's perspective, the disadvantages
of this approach are that affordable housing is less likely to be integrated into projects
throughout the city, and additional staff resources would be required to administer a more
sizable fund.
In the past, the City Council has expressed the opinion that the development community is
best suited to creating new housing, including affordable housing. Moreover, the City
Council thought that larger projects were better able to absorb the cost of providing
G:\RCAs\2007\PL07-12(Affordable Housing In-Lieu Fee).doc-4- 4/23/2007 3:49 PM
REQUEST FOR ACTION
MEETING DATE: May 7, 2007 DEPARTMENT ID NUMBER:PL07-12
affordable units. Hence, the ordinance that was adopted in 2004 only allows smaller size
projects to pay an in-lieu fee. In response to the input received from the development
community, the City Council may wish to direct staff to amend the affordable housing
ordinance to increase the size of projects that could pay an in-lieu fee or to allow all projects
to pay the fee. Should the City Council decide to modify the ordinance in this regard, the City
would be required to complete a nexus study, similar to the one attached to this RCA. This
would be done concurrent with the zoning text amendment.
Fractional calculations
The City requires that a minimum of 10 percent of a project's units be affordable, either on-
site or off-site. To comply with the ordinance, if the calculation results in a fractional number,
it is rounded up to the next whole number. Otherwise, rounding down would result in less
than the 10 percent requirement. Thus, a four unit project would be required to provide one
affordable unit (4 x 0.10=0.4 is rounded to 1), and a 23 unit project would be required to
provide three affordable units (23 x 0.10=2.3 is rounded up to 3). The development
community has requested that the City consider not rounding up when determining the
affordable requirement. With the proposed in-lieu fee, this approach has been incorporated
in that the fee is calculated using the 10 percent factor. In the case of projects that are not
currently eligible to pay the fee, the City could consider allowing payment of an in-lieu fee for
the fractional portion only. Using the 23 unit project as an example, a developer could be
required to provide two affordable units and pay the fee for the 0.3 portion. Alternatively, if
the City changes the existing ordinance to allow any size unit to pay a fee, then the fractional
calculation would ultimately be incorporated. In either case, staff would recommend that the
specific calculation method be set forth in the zoning code via changes to the existing
ordinance.
Ownership versus Rental housing
The City Council Ad Hoc Committee discussed the concept of only requiring affordable
housing to be rental. Concerns were expressed about the difficulty in monitoring for-sale
projects over the long term and finding buyers who qualify. Currently, the City does not
mandate what type of unit a developer must provide, i.e. owner or rental, to comply with the
affordable requirement. Thus, if a developer is building an ownership project, rather than
record a covenant on one or more units in their project, the developer could elect to acquire a
rental project and restrict it accordingly. Clearly, this is less feasible for a small scale project
in that it may be cost prohibitive, or it may be difficult to find a rental project that is for sale.
At this point in time, staff does not recommend changing the ordinance to specify that only
affordable rental units would be required. It may be the case that a large scale ownership
project would find it easier to meet its affordable housing requirement on site. This would
more likely continue to be the case if the City Council does not pursue allowing all projects to
pay an in-lieu fee regardless of size.
G:\RCAs\2007\PL07-12(Affordable Housing In-Lieu Fee).doc-5- 4/23/2007 3:49 PM
REQUEST FOR ACTION
MEETING DATE: May 7, 2007 DEPARTMENT ID NUMBER:PL07-12
RHNA requirements
All jurisdictions in California are required to demonstrate in their General Plan Housing
Elements how they are able to contribute to meeting their fair share of the needed housing
supply for their region over a period of five to eight years. The number of housing units
assigned to each jurisdiction is embodied in the Regional Housing Needs Assessment
(RHNA). The RHNA divides housing need into four income categories: Very Low, Low,
Moderate and Upper, and specifies how many units in each of these income categories
should be built during the planning period. The RHNA requirements are the underpinning for
the City of Huntington Beach's affordable housing ordinance. By having an inclusionary
housing requirement, the City is more likely to be successful in having affordable units
created, which allows the City to demonstrate to the State good faith efforts toward
ameliorating the statewide housing shortage.
The City Council Ad Hoc Committee briefly discussed the role that RHNA plays in driving City
policy. Staff stated that they would report back on the next RHNA cycle, which officially
began in February 2007 when the Southern California Association of Governments approved
the draft RHNA for the Housing Element cycle for January 1, 2006 through June 30, 2014.
Income Categories/Number of Units
Very Low Moderate Upper Total
Low
Existing RHNA 388 255 400 972 2,015
1998-2005
New Draft RHNA 450 366 410 848 2,074
2006-2014
As shown in the above table, the City's allocation of Very Low and Low income units has
increased by a total of 173 units, even though the overall total has increased by only 59 units.
This is an indicator that the number of Very Low and Low income units in the city is
disproportionate to the need in the region. Based on these new RHNA numbers, staff
believes that the City's affordable housing requirements will continue to play a critical role in
satisfying statewide housing goals and therefore should not be lessened. However, these
numbers also give support to the concept of encouraging affordable rental projects, given
that they would have a greater feasibility of being developed as Very Low and Low income
projects.
Affordable Housing Ordinance Changes
As part of KMA's work in calculating an in-lieu, the City requested that they review the
existing affordable housing ordinance and make recommendations to improve it. Their three
G:\RCAs\2007\PL07-12(Affordable Housing In-Lieu Fee).doc-6- 4/23/2007 3:49 PM
REQUEST FOR ACTION
MEETING DATE: May 7, 2007 DEPARTMENT ID NUMBER:PL07-12
recommendations are listed on page 16 of the report (ATTACHMENT NO. 2), and are listed
below:
1. The Ordinance should make it clear that developers can fulfill the inclusionary
requirements with Median income units for ownership projects and low income units for
rental projects
2. The Ordinance should mandate that the affordable housing cost be calculated in
accordance with the Code Section 50052.5 standards for ownership units and Code
Section 50053 standards for rental units; and
3. The Ordinance should only allow new development and substantial rehabilitation, as
defined by the Code Section 33413 affordable housing production requirements, to
fulfill the off-site inclusionary housing option allowed by the Ordinance.
Staff recommends the City Council direct that a zoning text amendment be processed to
evaluate these recommended ordinance changes. Depending on the City Council's direction
with regard to the other items in this RCA, these ordinance changes may or may not be
necessary, or may need to be augmented.
D. SUMMARY
Staff recommends that the City Council adopt the resolution to establish an affordable
housing in-lieu fee for projects with three to nine units, consistent with the City's existing
ordinance. Adoption of the proposed resolution will bring immediate relief to developers of
smaller projects and would not preclude the City from subsequently modifying the fee
structure if the City Council wishes to make the fee available to larger projects. Staff also
recommends that the City Council initiate a zoning text amendment to incorporate the
recommended ordinance changes articulated by KMA.
Strategic Plan Goal:
The affordable housing in-lieu fee in consistent with Strategic Plan Goal L-1, "Establish the
vision and create a land use plan for reuse of critical parcels so that the next phase of the
community investment and improvement can begin." The proposed in-lieu fee will create a
source of funds that the City can use to assist development and redevelopment of parcels
suitable for housing and to stimulate investment in target areas.
Environmental Status:
The proposed request is exempt from the California Environmental Quality Act pursuant to
Section 15061 (b)(3).
G:\RCAs\2007\PL07-12(Affordable Housing In-Lieu Fee).doc-7- 4/23/2007 3:49 PM
REQUEST FOR ACTION
MEETING DATE: May 7, 2007 DEPARTMENT ID NUMBER:PL07-12
Attachment(s):
City Clerk's
Page Number No. Description
Resolution No. 2007-29 , a resolution setting forth an
affordable housing in-lieu fee as authorized by Zoning &
Subdivision Ordinance 3687 Section 230.26
Keyser Marston Associates Memorandum, dated January 23,
2- 2006, Inclusionary Housing Ordinance In-Lieu Fee
Keyser Marston Associates Memorandum, dated April 9, 2007,
3. Inclusionary Housing Ordinance In-Lieu Fee Update
Existing Zoning and Subdivision Ordinance Section 230.26
4. Affordable Housing
5. PowerPoint Presentation Slides
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(6) May 7, 2007 -Council/Agency Agenda - Page 6
C-2. City Administrator's Report
City Administrator Penny Culbreth-Graft reported that a workshop would be held to
discuss the Beach/Edinger Corridor Project in the Council Chambers on Thursday,
May 10 at 6:30 p.m. She also stated that the meeting would recorded and available
for viewing on the City's website.
C-3. City Treasurer's Report
C-3a. (City Council) Review and Accept Shari L. Freidenrich, City Treasurer's
March 2007 Investment Summary Report Titled City of Huntington Beach Summary
of City Investment Portfolio, Bond Proceeds, and Deferred Compensation Activity
for March 2007
Communication from City Treasurer Shari L. Freidenrich transmitting the Monthly
Investment Report and Summary of Investments for March 2007.
Recommended Action: Motion to: Review and accept the Monthly Investment Report.
Following review of the report, by motion of Council, accept the Monthly Investment
Report entitled Summary of Investment Portfolio, Bond Proceeds, and Deferred
Compensation Activity for March 2007, pursuant to Section 17.0 of the Investment
Policy of the City of Huntington Beach.
PowerPoint presentation titled March Treasurer's Report is included in the agenda packet.
Approved 7-0
C-4. City Attorney's Report of Litigation Filed—None.
D. 'PUBLIC HEARING
Anyone wishing to speak on an OPEN public hearing item is requested to complete
the attached. pink form and give it to the Sergeant at Arms located near the Speaker's
Podium.
7D-1. (City Council) Public Hearing to Consider Adoption of Resolution No. 2007-29
lishing an Affordable Housing In-Lieu Fee for New Residential Projects With
to Nine Units to Provide an Alternative Means for Developers of Small Projects
isfy the City's Inclusionary Housing Requirements
Communication from the Director of Planning transmitting the following
Statement of Issue:
Transmitted for City Council consideration is a resolution that establishes an affordable
housing in-lieu fee for new residential projects with three to nine units. Payment of the fee
is allowed by the City's affordable housing ordinance. Staff recommends the City Council
approve the resolution because adoption of the in-lieu fee will provide an alternative
means for developers of small projects to satisfy the City's inclusionary housing
requirements. In addition, there are three suggested improvements by Keyser Marston
(7) May 7, 2007 -Council/Agency Agenda - Page 7
Associates to the existing affordable housing ordinance that staff recommends the City
Council initiate.
NOTICE IS HEREBY GIVEN that on Monday May 7, 2007, at 6:00 p.m. in the City Council
Chambers, 2000 Main Street, Huntington Beach, the City Council will hold a public hearing
on the following planning and zoning items:
AFFORDABLE HOUSING IN-LIEU FEE:
Applicant: City of Huntington Beach, 2000 Main Street, Huntington Beach, CA 92648
Request: To establish an affordable housing in-lieu fee for new residential projects that
consist of three to nine units.
Location: Citywide
Project Planner: Mary Beth Broeren
NOTICE IS HEREBY GIVEN that Items No. 1 is exempt from the provisions of the
California Environmental Quality Act pursuant to Section 15061(b)(3).
ON FILE: A copy of the proposed requests are on file in the Planning Department, 2000
Main Street, Huntington Beach, California 92648, for inspection by the public. Copies of
the staff reports will be available to interested parties at the City Clerk's Office on
Thursday May 3, 2007.
ALL INTERESTED PERSONS are invited to attend said hearing and express opinions or submit
evidence for or against the applications as outlined above. If you challenge the City Council's
action in court, you may be limited to raising only those issues you or someone else raised at the
public hearing described in this notice, or in written correspondence delivered to the City at, or prior
to, the public hearing. If there are any further questions please call the Planning Department at
536-5271 and refer to the above items. Direct your written communications to the City Clerk
■ Staff report
■ City Council discussion
■ Open public hearing
■ Following public input, close public hearing
"PowerPoint presentation titled Affordable Housing In-Lieu Fee is included in the
agenda packet.
Recommended Action: Motion to:
1. Adopt Resolution No. 2007-29, "A Resolution of the City Council of the City of
Huntington Beach Setting Forth an Affordable Housing In-Lieu Fee as
Authorized by Zoning and Subdivision Ordinance 3687 Section 230.26;"
and
2. Direct staff to process a zoning text amendment to amend Section 230.26 to
incorporate recommendations outlined in the Keyser Marston Associates
report, dated January 23, 2006.
(8) May 7, 2007 -Council/Agency Agenda - Page 8
Substitute motion approved 7-0 to continue item to a date uncertain, reconstitute the
ad-hoc committee and replace Dave Sullivan with Don Hansen for the purpose of
looking at the proposed fee for 3-9 units, and review the possibility of developing an in-
lieu fee for projects larger than 9 units.
ADMINISTRATIVE PUBLIC HEARING
D-2`: is an Administrative Public Hearing and is required by Huntington Beach
Municipal Code Section 1.18. ONLY affected property owners are entitled to speak of
this administrative hearing. ' Anyone wishing to speak is requested to complete the,
attached pink form and give it to the Sergeant at Arms located near the Speaker's
Podium. All other interested parties.may speak during the regular Public Comments
section of the agenda at the beginning of the meeting.
D-2. (City Council) Administrative Public Hearing to be Held Pursuant to Resolution
No. 2007-13 Adopted February 20, 2007 to Hear Protests and Objections Regarding
Weed, Rubbish and Refuse Abatement of Certain Public and Undeveloped Private
Properties at Owner's Expense
Communication from the Director of Public Works transmitting the following
Statement of Issue:
Pursuant to Resolution No. 2007-13, a public hearing must be held before staff can initiate the
removal of weeds, refuse and rubbish from undeveloped private properties at the owners'
expense.
Funding Source: Funds in the amount of$29,000 are budgeted in Weed Abatement, Account
No. 10085416.64620, for abatement of public and private properties. Costs for abatement of
private properties will be added to the County Assessor's tax role.
■ Staff report
■ City Council discussion
■ Open administrative hearing
■ Following input from affected property owners only, close administrative
hearing (The general public may speak during Public Comments)
Recommended Action: Motion to:
1. Open a public hearing for any objections and protests to the proposed removal of
weeds, refuse, and rubbish;
and
2. Following the hearing, authorize the Superintendent of Streets (Director of Public Works)
to proceed with the abatement of said nuisance.
ATTACHMENT # 1L]
f
RESOLUTION NO. 2007-29 /
r"
A RESOLUTION OF THE CITY COUNCIL OF THE
CITY OF HUNTINGTON BEACH SETTING FORTH AN AFFORDABLE HOUSING
IN-LIEU FEE AS AUTHORIZED BY ZONING & SUBDIVISION
ORDINANCE 3687 SECTION 230.26 t`
WHEREAS, on November 1, 2004 the Council adopted Ordinance No. 3687 adding
Zoning & Subdivision Ordinance Section 230.26, relating to the goals and objectives of the
City's Housing Element, which is intended to encourage very-low, low and median housing;
WHEREAS, pursuant to Section 230.26(b)(4), developers'of residential projects
consisting of nine or fewer units may elect to pay a fee in lieu of providing affordable units on
site to fulfill the requirement of the City's Inclusionary Housing Ordinance, unless the affordable
housing requirement is outlined as part of a Specific Plan Project;
WHEREAS,the City Council has received the report from Keyser Marston Associates
dated January 23, 2006, which includes an analysis pertaining to the City's Inclusionary Housing
Ordinance and proposes an in-lieu fee consistent with the provisions of Zoning & Subdivision
Ordinance Section 230.26. A copy of this study is attached hereto as Exhibit A and incorporated
herein by this reference.
f'
NOW, THEREFORE, the City Council of the City of Huntington Beach does hereby
resolve as follows: >'
1. The Keyser Marston report attached hereto as Exhibit A is received and filed.
2. The proposed per square foot in-lieu fee shall be as follows:
fr
Project Size Ownership Rental
Three Units $8.28 $4.48
Four Units $9.29 $5.04
Five Units $10.41 $5.60
Six Units $11.42 $6.16
Seven Units $13.32 $7.16
Eight Units $13.54 $7.28
Nine Units $14.55 $7.84
t
2. An Affordable Housing Trust Fund shall be created and used to receive all
deposits of in-lieu fees paid pursuant to Zoning & Subdivision Section 230.26. Interest shall
accrue to the fund and no other funds shall be commingled.
ACTMN
1 u
06-494/7217
Resolution No. 2007-29
3. Monies in the Affordable Housing Trust Fund shall be used only to fund/projects
which have a minimum of fifty (50)percent of the dwelling units affordable to very-low and low
income households, with at least twenty (20) percent of the units available to very-low income
households based on the Orange County median income, adjusted for appropriatfamily size, as
published by the United States Department of Housing and Urban Development/or established
by the State of California, pursuant to Health and Safety Code Sections 500795 and 50093, or a
successor statute. r'
4. Permitted uses of the Affordable Housing shall/be Fund hall be at the Council's
,
discretion and include for pre-development costs, land or air rights acquisition, rehabilitation,
land write-downs, administrative costs, gap financing, and lowering/fhe interest rate of
construction loans or permanent financing.
1
5. Any units that obtain or benefit from the Affordable Housing Trust Funds shall
maintain the affordability of the units for a minimum of sixty"`(60) years.
i
6. The Affordable Housing Fee shall be updated every two years beginning in
January 2008.
/r
7. The Affordable Housing In-Lieu Fe shall be adjusted every January beginning
2008 by the Cost of Living Index.
8. The City Administrator or her designee shall administer the Affordable Housing
Trust Fund and shall provide an annual report to City Council, which report shall include the
beginning balance, ending balance, a description of the projects funded or to be funded each
fiscal year. The first annual report shall be provided on or before December 1, 2007 for the
2006-07 fiscal year. 1,
PASSED AND ADOPTED by the City Council of the City of Huntington Beach at a
regular meeting thereof held on the` day of , 2007.
�i
Mayor
RE EWED AND APPROVED: �=pRnVED AS TO FORM:
City Administrator 4Cittorn / �' 4 A
INITI ED D APPROVED:
HO Al'TION
Director of Planning
1��AKEH
06-494/7217
EXHIBIT A
PLEASE SEE ATTACHMENT NO. 2
TO THIS RCA
FOR THE KEYSER MARSTON REPORT
THAT IS EXHIBIT A
FOR THE RESOLUTION
ATTACHMENT #2.
.471
J
9QO KEYSER MARSTON ASSOCIATES
ADVISORS IN PUBLIC/PRIVATE REAL ESTATE DEVELOPMENT
84101
% MEMORANDUM
ADVISORS IN:
REAL ESTATE To: Mary Beth Broeren, Principal Planner
REDEVELOPMENT City of Huntington Beach
AFFORDABLE HOUSING
ONOMIC DEVELOPMENT
From: Kathleen Head
SAN FRANCISCO
A JERKY KMER. Julie Romey
TIMOTHY C.KELLY
KATE EARLE FUNK '
DEBME M.KERN Date: January 23, 2006
ROBERTJ•WETMORE
LOSANGELES Subject: Inclusionary Housing Ordinance- In-Lieu Fee
CALVIN E.HOLLIS.11
KATHLEEN H.HEAD
JAMES A RABE
PAUL C.ANDERSON At our request, Keyser Marston Associates, Inc. KMA eared the following analysis
GREGORY D.Soo-Hoo Y Y { ) prepared 9 Y
pertaining to the City of Huntington Beach (City) Inclusionary Housing Ordinance
sAN
DIEGO
GERALD M.TRimBLE (Ordinance). Specifically, KMA evaluated the Ordinance provision that allows
MBLE
PAUL C.MARRA developers of projects with nine or fewer units to pay a fee in lieu of providing affordable
housing units within their project. The purpose of the following memorandum is to assist
the City in establishing an in-lieu fee payment schedule to be applied to small projects.
INCLUSIONARY HOUSING ORDINANCE REQUIREMENTS
The Ordinance requirements that must be considered in establishing an in-lieu fee
schedule are:
9. All for-sale and rental new construction housing projects with three or more units
must make at least 10%.of the units available to the following households:'
a. For-sale units must be made available to very-low, low or median income
households?
b. Rental units.must be made available to very-low or low income
households.
' New residential projects are defined as an entirely new project or new units added to an existing
project. Only new units are used to calculate the required number of affordable housing units.
2 The median is defined as the Orange County median income(Median).
SW SOUTH GRAND AVENUE,SUITE 1480> LOS ANGELES,CALIFoRNIA 90071 > PHONE:213 622 8095 > FAX:213 622 5204
WWWKEYSERh ARSTON.COM
54086.tm4.0t2
3
To: Mary Beth Broeren, City of Huntington Beach January 23, 2006
Subject: Inclusionary Housing Ordinance-In-Lieu Fee Page 2
2. The income and affordability covenants must remain in place for at least 60
years.
3. The affordable units must be:
a. Dispersed throughout the project,
b. Proportional in number, bedroom size and location to the market rate
units;
G. Comparable with the market rate units in terms of the base design,
appearance, materials and finish quality; and
d. Constructed and occupied concurrently with, or prior to,the construction
and occupancy of market rate units.
4. For small projects, defined as projects including nine or fewer units,the
inclusionary housing requirements may be satisfied by payment of an in4ieu fee
established by resolution of the City Council and updated annually:3
a. The in-lieu fees will be deposited into a dedicated affordable housing
account.
b. The account will only be used to provide funding assistance for
construction or retention of affordable housing, and for reasonable
administration costs.
5. Developers may choose to provide the affordable units at an off-site location as
long as these units are under the full control of the Developer or other approved
party. The following outlines the other conditions:
a. Off-site projects can be new construction or major physical rehabilitation
of existing non-restricted units. At risk units and mobile homes may also
be used to satisfy this requirement.
b. Off-site units must be constructed or rehabilitated prior to, or concurrently
with, the primary project.
3 The fees are to be based upon the total number and size of the new residential units.
a
To: Mary Beth Broeren, City of Huntington Beach January 23,2006
Subject: Inclusionary Housing Ordinance-In-Lieu Fee Page 3
c. The sales prices or rents must be affordable to very-low, low or median
income households pursuant to the terms of an Affordable Housing
Agreement.
METHODOLOGY
The vast majority of new residential projects within Huntington Beach are expected to be
comprised of"for sale' projects. However, it is possible that rental development may
also occur. Recognizing that the project economics vary between ownership and rental
projects, and to avoid imposing onerous requirements on development, the KMA
analysis evaluates both development types.
The first step in establishing an in-lieu fee is to quantify the financial impact associated
with fulfilling the affordable housing requirements within market rate projects. That
financial impact is equal to the difference between the market rate prices and the
affordable price for the required income restricted units. This difference is known as the
"affordability gap", and it is quantified using the following methodology:
1. The projected market rate sales prices and rents are compiled for prospective
new residential projects.
2. The maximum affordable prices and rents are calculated based on the standards
imposed by California Health and Safety Code (Code) Sections 50052.5 and
Section 50053.
3. The difference between the market rate price and the defined affordable price
represents the affordability gap associated with each income restricted unit
required to be included in a market rate residential project.
. 4. The affordability gap per income restricted unit is multiplied times the number of
units that must be income restricted. This represents the effective cost to a
developer of fulfilling the inclusionary housing requirements on-site.
5. Since a fee is going to be paid in-lieu of providing any affordable units on-site,
the effective cost is divided by the total square footage of the project. This
represents the Base In-Lieu Fee amount.
6. The Ordinance limits the in-lieu fee option to projects with nine or fewer units.
The in-lieu fee analysis recognizes that the inclusionary requirement has a
greater impact on smaller projects than it does for a typically sized project.
flso�ozs.►t�iwr�.x�:9ca
14066.004.012
1 y
To: Mary Beth Broeren, City of Huntington Beach January 23, 2006
Subject: Inclusionary Housing Ordinance-In-lieu Fee Page 4
7. The Small Project in-lieu fee reflects the number of units in the project, which can
range between three and nine units. To achieve this, it is necessary to create a
Sliding Scale In-Lieu Fee amount that can be justified based on both the
affordability gap and the feasibility analysis for the three-to nine-unit projects.
Household Incomes
The Ordinance specifically identifies the Code Section 50093 income definition for
moderate income households. However, the Ordinance limits the moderate income
category to 1000/a of the Median instead of the 120%of Median maximum that is allowed
by Section 50093.
The Ordinance also imposes very-low and low income restrictions. To account for these
requirements, KMA assumed that Code Section 50105 would apply for very-low income
households and that Code Section 50079.5 would apply for low income households_
The income information is published by the State of California Housing and Community
Development Department(HCD) annually. The income ranges for Orange County in
2005 are:
Very-Low Low Median
Household Income Income Income
Size (Section 50105) (Section 50079.5) Section 50093
1 Person $0-$26,900 $26,900-$43,000 $43,000-$53,000
2 Person $0-$30,700 $30,700-$49,150 $49,150-$60,550
3 Person $0-$34,550 $34,550-$55,300 $55,300-$68,950
4 Person $0-$38,400 $38,400-$61,450 $61,450-$76,700
5 Person $0-$41,450 $41,450-$66,360 $66,350-$81,750
6 Person $0-$44,550 $44,550-$71,250 $71,250-$87,800
7 Person $0-$47,600 $47,600-$76,200 $76,200-$93,850
8 Person $0-$50,700 $50,700-$81,100 $81,100-$99,900
Affordable Housing Cost Calculation methodology
The Ordinance does not identify a methodology for calculating affordable housing cost.
However, historically the City has used the calculation methodologies imposed by the
California Health and Safety Code. Section 50053 defines the calculation methodology
for rental units and Section 50052.5 provides the methodology for ownership units.
M7=HB:KHH'.Jt.Rgbd
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To: Mary Beth Broeren, City of Huntington Beach January 23, 2006
Subject: Inciusionary Housing Ordinance-In-Lieu Fee Page 5
AFFORDABILITY GAP ANALYSIS—OWNERSHIP PROJECTS(APPENDIX A)
Market Rate Sales Prices
Hanleywood Market Intelligence information indicates that the following single-family
detached and attached residential projects are currently selling or recently sold out in
Huntington Beach.
Year Product Number
Built Sold Out Type of Units
Seabridge Villas 4 2003 2004 Condos 344
Bel Air 2004 --- Duplex 102
Peninsula Point 2004 -- Detached 13
Sea Cove 2004 --- Townhomes 106
Total Units 565
As shown in Appendix A—Table 1,the following summarizes the sales prices for each
product type:
Average Average
Unit Size Sales Average
(SO Prices $/Sf
One-bedroom Units 811 $348,500 $430
Two-bedroom Units 1,418 $567,000 $400
Three-bedroom Units 2,484 $923,800 $367
Averages 1,841 $854,000 $464
Pricing Assumptions
The market rate sales prices are based on the following assumptions:
Unit Size Sales
(Sf) $1Sf Prices
One-bedroom Units 800 $430 $343,600
Two-bedroom Units 1,400 $400 $559,700
Three-bedroom Units 2,500 $367 $918,600
4 The project was built in the 1980's,and was converted from apartments to condominiums in
2003.
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To: Mary Beth Broeren, City of Huntington.Beach January 23, 2006
Subject: Inclusionary Housing Ordinance- In-Lieu Fee Page 6
Affordable Housing Cost Calculation
The affordable housing cost calculations included in the Code Section 50052.5 definition
are:
1. The household incomes are based on a benchmark household size equal to one
person more than the number of bedrooms.
2. The Ordinance sets the maximum household income for moderate income units
at 100% of the Median as published by HCD.5
3. Thirty-five percent(35%)of the defined household income is allocated to.housing
related expenses. These expenses are defined as mortgage debt service
payments, property takes, maintenance costs, insurance costs, home owner's
association (HOA)dues and utility costs. The Huntington Beach Redevelopment
Agency (Agency) has historically calculated these costs for the City using the
following assumptions:
a. Typically, the Agency estimates HOA fees, inclusive of homeowner's
insurance, based on the actual HOA fees for a project. Therefore, KMA
estimated the HOA fees by calculating the weighted average of the
project comparables in Appendix A—Table 1.
'b. The maintenance costs are estimated at$50 per month.
C. The 2005 utility allowances are provided by the Orange County Housing
Authority and include gas, electricity, trash and water expenses. These
costs are as follows:
One-bedroom Units $71
Two-bedroom Units $82
Three-bedroom Units $115
d. In accordance with the Agency's methodology, the property tax cost is
estimated at 1.08% of the projected affordable price for the units.
4. The mortgage amount that can be supported by a Median income household is
based on a 30-year fully amortizing mortgage at 6.5%interest rate.6
5 It is reasonable to assume that given a choice,a developer will provide Median income
ownership units rather than very-low or low income ownership units.
0507=.H&.Mt.R:0a
To: Mary Beth Broeren, City of Huntington Beach January 23, 2006
Subject: Inclusionary Housing Ordinance-In-Lieu Fee Page 7
Assuming the home buyer makes a down payment equal to 10%of the affordable
purchase price,the affordable prices for the Median income units in 2005 are:
One-Bedroom Two-Bedroom Three-Bedroom
Units Units Units
Supportable Mortgage $188,500 $217,800 $242,800
Home Buyer Down Payment 20,900 24,100 27,000
Affordable Purchase Price $209,400 - $241,900 $269,800
Affordability Gap Calculations
The results of the affordability gap analysis for Median income households-are
presented in Appendix A—Table 3. The analysis identifies the gaps between the
maximum affordable prices and the projected market rate sales prices for one-, two-and
three-bedroom units; the results are summarized below.
One- Two- Three-
Bedroom Bedroom Bedroom
Units Units Units
Market Sales Prices $343,600 $559,700 $918,600
(Less) Median Income Sales Prices (209,400) (241,900) (269,800
Affordability Gap $134,200 $317 800 $648,800
For the purposes of this analysis, KMA distributed the units as follows: 25°/0 one
bedrooms; 25%two bedrooms; and 50%three bedrooms. Based on these
assumptions, the average affordability gap per Median income unit is estimated at
$437,400.
Inclusionary Housing Obligation Cost
The Ordinance requires developers to impose income and affordability restrictions on at
least 10% of the units in an ownership project. it is the KMA assumption that developers
would typically minimize the financial gap by earmarking the units for Median income
"households, rather than for very-tow or low income households. When the$437,400
gap per affordable unit is distributed across all units in a project, the cost is equal to
$43,700 per unit($437,400 x 10% =$43,700).
6 The level annual debt service amount on a loan at 6.5%interest is equal to 7.58%multiplied
times the original balance on the first trust deed mortgage.
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To: Mary Beth Broeren, City of Huntington Beach January 23, 2006
Subject: Inclusionary Housing ordinance-In-Lieu Fee Page 8
AFFORDABIIJTY GAP ANALYSIS—RENTAL PROJECTS (APPENDIX B)
The methodology used in the KMA affordability gap analysis for rental developments can
be described as follows:
1. KMA obtained rents for recently renovated market rate apartment complexes in
Huntington Beach from www.rentnet.com.
2. KMA calculated the maximum affordable rents for low income households based
on the household income statistics distributed by HCD and the affordability
standards imposed by Code Section 50053.'
3. To maximize management efficiency, new apartment projects typically include at
least 50 units.8 For the purposes of this analysis, KMA created a 50-unit
prototype apartment project, and estimated the affordability gap associated with
the imposition of low income rents on 10% of the units. The affordability gap was
then translated into the value reduction generated by the income and affordability
restrictions imposed by the Ordinance.
4. The Ordinance does not allow projects with more than nine units to pay the in-
lieu fee. However,given the dearth of small new apartment projects, it is
necessary to premise the affordability gap analysis on a larger project. The gap
derived from this analysis is.then adjusted to reflect the characteristics .
associated with a project that would qualify for the in-lieu fee payment option.
The tables that detail the rental analysis are located in Appendix B. and are organized as
follows:
Table 1: Apartment Rental Rate Comparables
Table 2: Affordable Rent for Low Income Households
Table 3: Project Value—100% Market Rate Units
Table 4: Project Value--100% Low Income Units
Table 5: Affordability Gap Calculation—Rental Projects
KMA assumed that developers will choose to provide low income units rather than very-low
income units.
8 Small investors will sometimes develop a smaller project to hold over the long-term. However, _
in the current market place it is far more financially advantageous to build a small condominium
project rather than a small apartment project..
To: Mary Beth Broeren,City of Huntington Beach January 23,2006
Subject: Inclusionary Housing Ordinance-In-Lieu Fee Page 9
Market Rate Rents
The vast majority of the recently constructed apartment projects in Huntington Beach
have been subject to long-term income and affordability restrictions. Given the lack of
new rental development, KMA gathered rent comparables for apartment buildings that
have been renovated since 2000. The following illustrates the average asking rents for
recently rehabilitated apartment units in Huntington Beach:
Unit Size Monthly
Unit T (Sf) Rents $1Sf
Studio Units 452 $1,000 $2.26
One-bedroom Units 723 $1,200 $1.67
Two-bedroom Units 988 $1,500 $1.50
Three-bedroom Units 1,364 $1,700 $1.27
Based on the current market and development trends, KMA assumed that a typical
apartment project would be focused on one-and two-bedroom units. Assuming a 15%
premium for new construction,the projected market rents for a new apartment project
are as follows:
Unit Size Monthly
Unit Type (Sf) $1Sf Rents
One-bedroom Units 750 $1.92 $1,443
Two-bedroom Units 1,000 $1.73 $1,729
Affordable Housing Rent Calculations
The Ordinance requires 10% of the units in a rental development to be subject to very-
low or low income and affordability restrictions. Historically,the City has applied the
Code Section 50053 affordable housing cost definition to the inclusionary housing rental
units. The calculations are presented in Appendix B—Table 2, and the results can be
-summarized as follows:
1. The household incomes are based on benchmark household sizes of two
persons for one-bedroom units and three persons for two-bedroom units.
2. The household income is set at 60% of the Median for low income units.
3. 30% of the defined household income is allocated to housing related expenses.
05G7026.H&-KHr:Lft9ba
1406&CCK012
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To: Mary Beth Broeren, City of Huntington Beach January 23, 2006
Subject:: Inclusionary Housing Ordinance-In-Lieu Fee Page 90
4. The maximum allowable rent must be adjusted to reflect the fact that the tenants
will be required to pay for interior utility costs. Based on the 2005 allowances
provided by the County of Orange Housing Authority, the utilities are estimated at
$32 per month for one-bedroom units and $40 per month for two-bedroom units?
5. The income and affordability covenants must be imposed over at least a 60-year
term_
The maximum allowable 2005 low income rents under the defined income categories are
as follows:
Monthly
Unit Type Rents
One-bedroom Units $877
Two-bedroom.Units $982
As a practical matter, tenants will not be willing to pay rent that exceeds the prevailing
rate in the market area_ As such, it is important to estimate the rents that could be
achieved by apartments that are not subject to'income and affordability restrictions_ As
can be seen in the following table,the projected market rents exceed the maximum
affordable rents by 39%to 43%. Thus, KMA has applied the defined affordable rents to
our affordability gap analysis.
Market t_ow
Unit Type Rate Income Difference
One-bedroom Units $1,443 $877 (39%)
Two-bedroom Units $9,729 $982 43%
Affordability Gap Calculations
The affordability gap calculations are presented in Appendix B. Table 3 provides a pro
forma analysis for a market rate project and Table 4 presents the findings for a low
income project. The assumptions that were applied to each scenario are:
1. The market rate and income restricted rents are based on the assumptions
discussed in the preceding section of this analysis.
2. The revenue analyses include $15 per unit per month in miscellaneous income
and a 5%vacancy and collection allowance.
s Rental utility allowances include gas and electric►ty expenses only.
14M.W4.012
To: Mary Beth Broeren, City of Huntington Beach January 23,2006
Subject: Inclusionary Housing Ordinance - In-Lieu Fee Page 11
3. The general operating expenses are estimated at$3,800 per unit and a$250 per
unit per year allowance is provided to fund an operating and capital reserve
account.
4. The property tax expense estimates vary among the market rate and income
restricted apartment projects_ The expense cost is equal to the value supported
by the project at a 1.1% property tax rate.
5. The net operating income(NOI)for both the market rate and income restricted
units was capitalized at a 6.01% rate to estimate the relative values supported by
market rate and low income units.
Based on the preceding assumptions,the values per unit are estimated as follows:
NO(]Unit Value/Unit
100% Market Rate $12,000 $200,000
100% Low Income $5,700 $95 000 .
Appendix B—Table 5 illustrates the affordability gaps per affordable unit,which are
summarized as follows:
Market Rate Scenario Value/Unit $200,000
(Less) Low Income Value/Unit (95,500)
Affordability Gap $105,000
lnclusionary Housing Obligation Cost
The Ordinance requires developers to set-aside 10%of the units in a rental project for
very-low or low income households. Based on the KMA analysis, the affordability gap is
estimated at an average of$105,000 per income restricted unit included in the project.
A developer that chooses to pay the in-lieu fee will not be providing any affordable units
within their market rate project. To translate the weighted average affordability gap into
an in-lieu fee payment per market rate unit, it is necessary to multiply$105,000 times the
10%inclusionary housing requirement. This equates to$10,500 per unit development in
a market rate project.
0507626.H8:KHH:JLR:gbd
14056.004.012
To: Mary Beth Broeren, City of Huntington Beach January 23, 2006
Subject: inclusionary Housing Ordinance-In-Lieu Fee Page 12
2006 MAXIMUM ALLOWABLE IN-LIEU FEES
The City's objective is to establish an in4ieu fee schedule that provides the City with
adequate funds to produce the indusionary units in similar locations and product types.
However, the primary reason the Ordinance allows projects with nine or fewer units to
pay an in-lieu.fee is that the City recognizes that the imposition of income and
affordability restrictions has a disproportionate impact on small projects. Therefore,it is
necessary to establish an in-lieu fee schedule that does not render small projects
economically infeasible.
In order to demonstrate the effective cost of ftAlling the Ordinance's production
requirements,the KMA financial analysis is based on the characteristics embodied by
larger projects than would be allowed to pay the in-lieu fee. This in turn provides the
foundation for creating an in-lieu fee schedule that does not render small development
financially infeasible:
1. The Base in-Lieu fee is calculated at the 100%estimated affordability gap for a
typically sized project.
2. Based on the survey data presented in this report, the average ownership unit is
estimated at 1,800 square feet in sue,and the average rental unit is estimated at
875 square feet in size.
3. The Base In-Lieu fees that correlate to the financial analyses presented in the
financial analysis (Base In-Lieu Fees) are as follows:
Per Per Per Sf of
Affordable Market Rate Building
Unit Unit Area
Ownership Projects $437,400 $43,700 $24
Rental Projects $105,000 $10 500 $12
KMA prepared comparative pro forma analyses of 30-unit and nine-unit"for sale'
projects to assist in understanding the financial characteristics of the different project
sizes (Appendix C—Table 1). Based on current projections,the developer profit per unit
is approximately 46% less for the nine-unit project than the projected profit for the 30-
unit project. To equalize the impact of the Ordinance's production requirement for
projects with 10 or more units, and the in-lieu fee option provided to projects with nine or
fewer units, KMA reduced the Base In-Lieu Fee by 46%.
05070¢6.t+e:KHRA.t:gba
14066.004.012
To: Mary Beth Broeren, City of Huntington Beach January 23,2006
Subject: Inclusionary Housing Ordinance-In-Lieu Fee . Page 13
The resulting fees for nine-unit projects'are:
Per Sf of
Builgqq Area
Ownership Projects $13
Rental Pro ects $7
It is important to recognize that the financial_impacts grow at a disproportionate rate as
the project size decreases. To reflect this, KMA created the following sliding scale for
three-to nine-unit projects:'°
Asa% of
Small Project
Project Size Base Fee
Three Units 67%
Four Units 64%
Five Units 71%
Six Units 79%
Seven Units 92%
Eight Units 93%
Nine Units 100%
The in-lieu fees that result from the sliding scale are:
Project Size Ownership Rental
Three Units $7 $4
Four Units $8 $4
Five Units $9 $5
Six Units $10 $6
Seven Units $12 $6
Eight Units $12 $7
Nine Units $13 $7
vo It is difficult to precisely project the financial impact generated at each project size..The
recommended sliding scale percentages are based on the scales currently being applied in West
Hollywood and Pasadena.
oso7o�.He:1a+H_.a 1t:9oa
14W&W4.092
To: Mary Beth Broeren, City of Huntington Beach January 23,2006
Subject: Indusionary Housing Ordinance-In-lieu Fee Page 14
IN-LIEU FEE COMPARISON ANALYSIS
To assist the City in setting the in-lieu fee payment amount, KMA compiled information
from other Southern California jurisdictions that have inclusionary housing requirements,
and that allow in-lieu fees to be paid. It is important to note, however,that the majority of
the surveyed cities calculate the in4ieu fee on a case-by-case basis. In addition, many
cities require the City Council to provide discretionary approval for a fee to be paid in-lieu
of producing the affordable units.
For the surveyed cities that have established fee schedules, the in-lieu fee is calculated
on one of the following bases:
1. Per square foot of building area included in the project;
2. Per unit developed in a market rate project; or
3. As a percentage of project or construction valuation.
The in-lieu fees charged in the surveyed cities are presented in the following tables:
Per Square Foot of Building Area
Jurisdiction In-lieu Fee Amount
Chino $2.72
Duarte $6.50
Pasadena i2
Rental Projects $12—$22
Ownership Projects $5-$41
San Diego 13 $1.25-$2.50
Santa Monica '" $22.33-$26.08
West Hollywood $6.70-$13.40
17 The in-lieu fee amount is only applicable to projects developed in the Preserve.
12 Projects with fewer than 10 units are exempt from the Program.
33 The lower fee is charged for projects with fewer than 10 units.
'¢The lower fee is charged for apartment projects and the higher fee is charged for ownership
projects.
1s An in-lieu fee can only be paid for projects with 20 or fewer units. The fee varies by number of
units in the project.
�om2s.�aoal:.a.R�a
14W&W4.U12
To: Mary Beth Broeren,City of Huntington Beach January 23, 2006
Subject: Inclusionary Housing Ordinance-In-Lieu Fee Page 15
Per Unit in a Market Rate Project
Jurisdiction In-lieu Fee Amount
Agoura Hills 16 - - $4,541 -$6,277
Laguna Beach " $7,047
Coronado $7,000
As a% of Pr 'ect 1 Construction Valuation
Jurisdiction In-Lieu Fee Amount
San Clemente 1.00%
San Juan Capistrano 1.00%
The in-lieu fees being charged by the surveyed cities vary widely. Moreover, since many
cities negotiate the in4ieu fee-on a case-by-case basis, it is very difficult to identify the
"typicar in-lieu fee being charged by cities that are implementing inclusionary housing
programs. However, based on the available information,the maximum supportable fee
in Huntington Beach is within the range of the fees currently being charged by other
Southern California cities.
IN-LIEU FEE RECOMMENDATIONS
The establishment of an in-lieu fee amount requires several subjective judgments and
decisions. To provide a framework for our recommendations, KMA considered the
following factors:
1. The City's primary objective is to attract sufficient housing to fulfill the affordable
housing production requirements imposed by Code Section 33413, and to
eliminate the unmet need for affordable housing identified in the Regional
Housing Needs Assessment(RHNA).
2. An inclusionary housing production requirement has a greater financial impact on
small projects than it does on large projects. To mitigate this, the provision of an
in-lieu fee option is an efficient method of enforcing the Ordinance without
stopping the development of smaller projects.
1
6 The lower fee is charged for apartment projects and the higher fee is charged for ownership
projects.
"The fee is set at$46,978 per affordable lot or unit. 15%of the units are required to be
affordable.
0507026_M:10 tJUt0d
44066 WCM2
To: Mary Beth Broeren, City of Huntington Beach January 23, 2006
Subject: inclusionary Housing Ordinance-In-Lieu Fee Page 16
The preceding-analysis indicates that the affordability gap is$24 per square foot for
ownership units and $12 per square foot for rental projects. However, it is the KMA
conclusion that fees of the this magnitude ace likely to render small projects infeasible.
To balance the City's objective to generate revenues to pursue affordable housing
activities, against the need to ensure that the in-lieu fee does not result in a constraint to
development, KMA recommends that the in-lieu fee schedule be set as follows:
Project Size Ownership Rental
Three Units $7 $4
Four Units $8 $4
Five Units $9 $5
Six Units $10 $6
Seven Units $12 $6
Eight Units $12 $7
Nine Units $13 $7
KMA also offers the following recommendations:
1. The City should create a mechanism for re-evaluating the in-lieu fee amount on a
periodic basis. KMA suggests that the re-evaluation be performed at least every
two years so that the in4ieu fee can keep pace with changes in the market place.
2. The Ordinance should be amended to provide the following clarifications:
a. The Ordinance should make it clear that developers can fulfill the
inclusionary requirements with Median income units for ownership
projects and low income units for rental projects;
b. The Ordinance should mandate that the affordable housing cost be
calculated in accordance with the Code Section 50052.5 standards for
ownership units and Code Section 50053 standards for rental units"; and
C. The Ordinance should only allow new development and substantial
rehabilitation, as defined by the Code Section 33413 affordable housing
production requirements,to fulfill the off-site inclusionary housing option
allowed by the Ordinance.
'$The City has set 100%of the Median as the maximum income for the moderate income"for
sale"units. This standard should replace the 110%of the Median applied in the Code Section
50052.5 affordable housing cost calculation.
05070 &H&K HRJLR_-9W
1406&004.012
APPENDIX A
OWNERSHIP ANALYSIS
APPENDIX A-TABLE 1
NEW CONSTRUCTION SALES COMPARABLES
IN-LIEU FEE ANALYSIS
HUNTINGTON BEACH,CALIFORNIA
Floorplans
Year Built/ Type Unit 1f of Unit Base
ProjectfAddress Sold Out HOA Fee Type Units . Size M Price $/Sf
1. Seabridge Villas 2003 Condo One-bedroom 72 485 $230,000 $474
Beach Blvd&Adams 2004 $350 One-bedroom 19 760 310,000 408
One-bedroom 83 765 300,000 392
One-bedroom 46 885 360,000 407
Two-bedrooms 24 970 335.000 345
Tiro-bedrooms 59 1.095 405,000 370
Two-bedrooms 8 1.100 340,000 309
Two-bedroorns 4 1,240 415,000 335
Two-bedrooms 29 1,285 470,000 366
Totals/Averages 3" 850, $330,974 $389
11. Bel Air 2004 Duplex Three-bedrooms 28 2,484 $910,000 $366
Gothard&Garfield $276 Three-bedrooms 25 2,497 898.820 360
Three-bedrooms 26 2,565 920,000 360
Three-bedrooms 23 Z636 907,855 344
TotaWAverages 102 2,539 $909,366 $368
Ill. Peninsula Point 2004 SFD Three-bedrooms 5 1,990 $869,900 $437
Main Street&Clay $95_ Three-bedrooms 7 2,174 899,900 414
Three-bedrooms 1 2,260 919,9m 407 .
TotaWAverages 13 2,110 $889,900 $422
IV. Sea Cove 2004 Townhomes One-bedroom 26 1.770 $838,990 $474
PCH&Goidenwest $405 Two-bedrooms 19 1,620 W919W 512
Two-bedrooms 21 1,845 917.990 498
Two-bedrooms 19 2,690 987,990 367
Three-bedrooms 21 2,460 1,014,990 414
Totals/Averages 106 2,058 $914,603 $445
V. lAttached Units/Large Projects 652 1,834 $863,140 $465
One-bedroom 246 811 $348,470 $430
Two-bedrooms 183 1,418 $567.019 $400
Three-bedrooms 123 2,524 $927,399 $367
VI. IDelachedUnirts I Small Project 13 2,110 $889,900 $422
Three-bedroom Units 13 2,110 $889,900 $422
Vll. JAII Units 665 1,841 $853,986 $464
One-bedroom 246 811 $346,470 $430
Two-bedrooms 183 1,418 $567.019 $400
Three-bedrooms 136 2,484 $923,814 $367
Source: Hanleywood Market Intelligence for the City of Huntington Beach.
Prepared by: Keyser Marston Associates,Inc.
Filename: In lieu-0123 06_xls;APPX A-T1;112312006
APPENDIX A-TABLE 2
AFFORDABLE HOUSING PRICES
IN-LIEU FEE ANALYSIS
HUNTINGTON BEACH,CALIFORNIA
One-bedroom Two-bedroom Three-bedroom
Units Units Units
1. Household Income @ 100%of County Median' $60,550 $68.150 $75.700
11. Income Available for Mortgage Debt Service
Income Allotted for Housing @ 35%of income 2 $21,200 $23,900 $26,500
(Less)Ongoing Expenses
HOA,Insurance,Maintenance 3 (3,792) (3,792) (3,792)
Utilities° (852) (984) (1.380)
Property Faxes @ 1.08%of Affordable Price 3 (2,262) (2,603) (2,914)
Income Available for Mortgage Debt Service $14,294 $16,521 $18.414
Ill. Maximum Mortgage @ 6.5%Interest Rate 5 $188,500 $217.800 $242,800
IV. Home Buyer Down Payment @ 10%Affordable Price 3 $20.900 $24,100 $27,000
V. Maximum Affordable Home Price $209,400 $241.900 $269,800
Based on the 2005 Orange County median incomes provided by HCD. Per the requirements imposed by California Health
and Safety Code Section 50052.5,the household size is set at three persons for two-bedroom units and four persons for
three-bedroom units. The Ordinance limits the moderate income units to households earning 1000/6 of the median.
2 Based on California Health and Safety Code Section 50052.5.
3 Based on the Redevelopment Agency's assumptions. The Agency calculates the affordable prices for the City.
Based on the current Orange County utility allowances. Includes gas,electricity,water and trash.
5 Based on the current 30-year fixed mortgage rate.
Prepared by. Keyser Marston Associates,Inc.
Filename; In fieu-0123 06xis;APPX A-T2;9/23l2006
APPENDIX A-TABLE 3
AFFORDABILITY GAP CALCULATION-OWNERSHIP PROJECTS
IN-LIEU FEE ANALYSIS
HUNTINGTON BEACH,CALIFORNIA
One-bedroom Two-bedroom Three-bedroom
Units Units Units
1. Affordability Gap Calculation
Market Sales Prices' $343.600 $559,700 $918,600
(Less)Maximum Affordable Sales Prices 2 (209,400) (241,900) (269.800)
Affordability Gap 1 Affordable Unit $134,200 $317,800 $648,800
Affordability Unit Type
11. Average Affordability Gap Calculation Gap Distribution 3
One-bedroom Units $134.200 25%
Two-bedroom Units $317,800 25%
Three-bedroom Units $648,800 WA
Average Affordability Gap I Affordable Unit $437,400
Ill. Affordability Gap I Total Unit Calculation
Average Affordability Gap/Affordable Unit $437,400
Affordable Units as a%of Total Units 4 100/0
lAffordabilitlGap I Total Unit $43,700
I Market rate prices are based on the following:800 sf one-bedroom units @$430/sf; 1,400 sf two-bedroom units
@$400/sf.and 2,500 sf three-bedroom units @$367/sf.
2 See APPENDIX A-TABLE 2.
3 KMA estimate.
4 Based on the City Ordinance.
Prepared by: Keyser Marston Associates,Inc.
Filename: in lieu-0123 06.4s;APPX A-T3;1/23/2006
APPENDIX B
-RENTAL ANALYSIS
I ,
APPENDIX -TABLE 1
APARTMENT RENTAL RATE COMPARABLES
IN-LIEU FEE ANALYSIS
HUNTINGTON BEACH,CALIFORNIA
Year
Zip Built/ Total Unit Base
Name&Address Code Renovated Units Type Rent SF/Unit $/SF
1 La Quints Hermosa 92647 1971 94 1/1 $1,155 726 $1.59
16211 Parkside Lane 2000 2/1 1,405 940 $1.49
211 1.415 945 $1.50
2/1 1.530 1.110 $1.38
2 Las BrisasArlda Del Mar Apartments 92649 1976 62 1/1 1.170 800 $1.46
16602 and 16552 Sell Cirde 2000 2/2 1,450 1,200 $121
3 Archstone Huntington Beach 92647 1986 152 1/1 1,300 725 $1.79
8945 Riverbend Drive 2000 211 1,650 925 $1.78
4 Huntington Breakers 92648 1985 324 0/1 1,050 450 $2.33
21270 Beach Blvd 2000 1/1 1,305 635 $206
1/1 1,355 625 $2.17
2/2 1,615 925 $1.75
2/2 1,655 900 $1.84
212 1,655 900 $1.84
5 Los Patos Apartments 92649 1973 71 0/1 1,000 400 $2.50
17172 Bolsa Chica 2004 111 1,200 700 $1.71
211 1,500 1,000 $1.50
6 Maddox Apartments 92647 1971 56 1/1 1,045 760 $1.39
7051 Maddox Dr 2002 2/1 1,300 980 $1.33
2/2 1,400 1,050 $1.33
7 Ocean Breeze Villas 92647 1975 288 111 1,125 718 $1.57
6401 Warner Ave 2000 1/1 1.150 800 $1.44
211 1,225 850 $1.44
211 1,276 SW $1.42
2l2 1,450 1,100 $1.32
3J2 1,700 1,288 $1.32
3/2 1,750 1,440 $1.22
8 Avalon At Pacific Bay 92647 1970 304 1/1 1,195 750 $1.59
6700 Warner Ave 1999 2/1 1.540 1.000 $1.54
212 1,495 1,000 $1.50
9 Huntington Creek 92647 1978 194 0/1 990 505 $1.96
8211 San Angelo Dr 2001 ill 1,190 729 $1.63
2N.5 1,510 1,075 $1.40
Sample Average Min. Max. Avg: Avg.
Size Units Rent Rent Rent 1
Studios 3 452 $1,000 $1,100 $1,000 $2.26
1-Bedroom Units 11 723 $1,000 $1,400 $1,200 $1.67
2-Bedroom Units 17 988 $1,200 $1,700 $1,500 $1.50
3-Bedroom Units 2 1,364 $1,700 $1,800 $1,700 $1.27
Source:RentNet.com,07106/05.
Prepared by: Keyser Marston Associates,Inc.
Filename: In lieu-0123 06.x1s;APPX 8-Ti;1/2312006
APPENDIX 8-TABLE 2
AFFORDABLE RENTS FOR LOW INCOME HOUSEHOLDS
IN4JEU FEE ANALYSIS
HUNTINGTON BEACH,CALIFORNIA
One-Bedroom Two-Bedrooms
Units Units'
1. Low Income
Income @ 60%County Median 2 $36,340 $40,880
%of Income Allotted to Housing 3 30.0°% 30.0%
Monthly Housing Expenses $909 $1,022
(Less)utilities Expenses 4 (32) (40)
Monthl Rent $877 $982
I . Based on the 2005 Orange County median incomes provided by HCD. Per the requirements imposed by California
Health and Safety Code Section 60053,the household size is set at two persons for one-bedroom units and three
persons for two-bedroom units-
2 Based on the 2005 Orange County median incomes provided by HCD and the requirements imposed by California
Health and Safety Code Section 50053.
3 Based on the City Ordinance.
4 Based on the current Orange County utility allowances. Includes gas and electricity.
Prepared by: Keyser Marston Associates,Inc.
Filename: In lieu-0123 06.)ds;APPX B-T2;1123t2006
APPENDIX B-TABLE 3
PROJECT VALUE-100%MARKET RATE UNITS
RENTAL PROTOTYPE
IN-LIEU FEE ANALYSIS
HUNTINGTON BEACH,CALIFORNIA
1. Rental Income
One-Bedroom' 25 Units $1,443 /Unit $433,000
Two-Bedrooms 2 25 Units $1,729 /Unit 518,800
Miscellaneous Income 50 Units $15.00 Knit 9,000
Gross Income $960,800
(Less)Vacancy Allowance 5.0% of.Gross Income (48.000)
Effective Gross Income $912,800
It. Opomflnq Expenses
General Operating Expenses 50 Units $3,800 /Unit ($190,000)
Property Taxes 3 50 Units $2,201 /Unit (110,000)
Operating&Capital Reserves 50 Units $250 /Unit (12.500)
Total Operating Expenses ($312,500)
Ili. Net Operating Income $600,300
Per Unit $12,000
IV. Project Value $1010051000
Per Unit $200,000
Assumes one-bedroom units at 750 square feet and rent at$1.92/sf.
Assumes two-bedroom units at 1,000 square feet and rent at$1.73/sf.
3 The value is projected based on a 6.0°/a capitalization rate. The property tax rate is set at 1.10%of value.
" The value is projected based on a 6.0%capitalization rate.
Prepared by: Keyser Marston Associates,Inc.
Filename: In lieu-0123 06.xls;APPX B-T3; 11=006
APPENDIX B-TABLE 4
PROJECT VALUE-100%LOW INCOME UNITS
RENTAL PROTOTYPE
IN-LIEU FEE ANALYSIS
HUNTINGTON BEACH,CALIFORNIA
1. Rental Income
One-Bedroom 25 Units $877 /Unit $263,100
Two-Bedrooms 25 Units $982 /Unit 294.600
Miscellaneous Income 50 Units $15.00 /Unit 9,000
Gross Income $566,700
(Less)Vacancy Allowance 5.0% of Gross Income (28,300)
Effective Gross income $538,400
IL Operating Expenses
General Operating Expenses 50 Units $3,800 ]Unit ($190,000)
Property Taxes 2 50 Units $1,041 /Unit (52,000)
Operaing&Capital Reserves 50 Units $250 Knit (12,500)
Total Operating Expenses ($254,500)
III- Net Operating Income $283,900
Per Unit55,700
IV- Project Values $4,732,000
Per Unit $95,000
See APPENDIX B-TABLE 2.
The value is projected based on a 6.0"/o capitalization rate. The property tax rate is set at 1.10%of value.
' The value is projected based on a 6.0%capitalization rate.
Prepared by: Keyser Marston Associates,fnc.
Filename: to lien-0123 06.)ds-,APPX B-T4-,1/23/2006
' t
APPENDIX B-TABLE 5
AFFORDABILITY GAP CALCULATION-RENTAL PROJECTS
IN-LIEU FEE ANALYSIS
HUNTINGTON BEACH,CALIFORNIA
Net Operating Project Affordability
L Affordability Gap Income Value Gap
Low Income Gap/Unit
Market Rate Scenario' $12,000 $200,000
Low Income Scenario 2 $5,700 $95,000
Affordability Gap/Unit $105,000
It, Affordability Gap I Total Unit Calculation
Affordability Gap/Affordable Unit $105,000
Affordable Units as a%of Total Units 10°A
lAffordability Gap I Total Unit $10,500
See APPENDIX B-TABLE 3.
2 See APPENDIX B-TABLE 4.
Prepared by: Keyser Marston Associates,Inc_
Filename: In lieu-0123 06.)ds;APPX B-T5;1/23/2006
APPENDIX C
IN-LIEU FEE CALCULATION
APPENDIX C-TABLE 1
SMALL PROJECT ANALYSIS
IN-L€EU FEE ANALYSIS
HUNTINGTON BEACH,CALIFORNIA
Prototype Project
I_ Pro€ected Sates Revenues #of Units Sales Prices Total Revenue
One-bedroom Units 5 $343,600 $1.718,000
Two-bedroom Units 5 559.700 2,799,000
Three-bedroom Units 20 918,600 18,372,000
Total Project Revenue 30 $762,967 $22,889,000
H. Land+Construction Costs $649,000 /Unit $19,456,000
Ill. Develooer Profit
Total 15% Sales Revenues $3,433,000
Per Unit $114,000
Small Project
#of Units Sales Prices Total Revenue
i_ Prolected Sates Revenues'
One-bedroom Units 2 $343,600 $687,000
Two-bedroom Units 2 559.700 1,119,000
Three-bedroom Units 5 918,600 4,693,000
Total Project Revenue 9 $711,000 $6,399,000
-11. Land+Construction Costs $649,000 /Unit $5,841,000
III. Developer Profit
Total $558,000
Profit Per Unit $62,000
Profit Differential Per Unit $52,000
%Difference %
See APPENDIX A-TABLE 3.
2 Based on stabilized return on total investment.
Prepared by: Keyser Marston Associates,Inc
Filename: In lieu-01 23 061ds;APPX C-T1;12312006
APPENDIX C-TABLE 2
2005 IN-LIEU FEE SUMMARY
IN-LIEU FEE ANALYSIS
HUNTINGTON BEACH,CALIFORNIA
I. Base In4ieu Fee /Total Unit 1Sf GBA
2005 In-lieu Fee-Ownership Projects $43,700 ' $24 2
2005 In-Ueu-Fee-Rental Projects $10,500 3 $12 a
Il. Base In4ieu Fee for Small Projects Ownership Rental
Base In-lieu Fee $24 $12
Loss in Profit$ 46% 46%
Base In-lieu Fee for Small Projects $13 $7
111. Sliding Scale as a%of the Base In-lieu Fee Ownership Rental
Three Unit Projects 57% 57%
Four Unit Projects 64% 64%
Five Unit Projects 71% 71%
Six Unit Projects 79% 79%
Seven Unit Projects 921% 92%
Eight Unit Projects 930/6 93%
Aline Unit Projects 100% 100%
N. 2006 Slidin-g Scale ln4ieu Fee Ownership Rental
Three Unit Projects $7 $4
Four Unit Projects $8 $4
Five Unit Projects $9 $5
Six Unit Projects $10 $6
Seven Unit Projects $12 $6
Eight Unit Projects $12 $7
Nine Unit Projects $13 $7
' See APPENDIX A-TABLE 3.
2 Assumes that the units average 1,800 square feet in size.
3 See APPENDIX B-TABLE 5_
4 Assumes that the units average 875 square feet in size.
S See APPENDIX C-TABLE 1.
Prepared by: Keyser Marston Associates,lnc.
Rename: In lieu-0123 06.)ds;APPX C-T2; 1/23/2006
ATTACHMENT #3
r
lam'i_It�J li
'-L—---- is
ADVISORS IN PUBLIC/PRIVATE REAL ESTATE DEVELOPMENT
MEMORANDUM
ADViSORS IN To: Mary Beth Broeren, Principal Planner
REAL ESTATE
REDEVELOPMENT City of Huntington Beach
AFFORDABLE HOUSING
ECONOMIC DEVELOPMENT
From: Kathleen Head
SAN I RANCISCO
A.JERRY KEYSER
TIMOTHYC. KELLY Date: April 9, 2007
KATE EARLE FUNK
DEBBIE M.KERN
ROBERT 1.WETMORE Subject: Inclusionary Housing Ordinance - In-Lieu Fee Update
OS ANGELES
CALVIN E.HOLLIS.II
KATIIILEN H.HEAD In a memorandum dated January 23, 2006, Keyser Marston Associates, Inc. (KMA)
JAMLSA.RAVE
PAUL C.ANDERSON recommended an in-lieu fee schedule for residential projects with nine or fewer units that
cREEVIN E.
NGSTRSoo-HOM are subject to the City of Huntington Beach (City) Inclusionary Housing Ordinance
KEVW E.ENGSTROM
JULIE L.ROMEY (Ordinance). The recommended schedule is presented in the following table:
SA''' DIEGO
GERALD M.TRIMBLE Project Size Ownership Rental
PAUL C MARRA Three Units $7 $4
Four Units $8 $4
Five Units $9 $5
Six Units $10 $6
Seven Units $12 $6
Eight Units $12 $7
Nine Units $13 $7
The KMA analysis also recommended that the City create a mechanism for re-evaluating
the in-lieu fee amount on a periodic basis. The periodic adjustment is intended to keep
the fee amount in sync with changes in new housing prices.
It is the KMA recommendation that the City apply an adjustment factor tied to the annual
change in new home prices in Orange County. This information is published by the Real
Estate Research Council of Southern California in a quarterly report titled Real Estate
and Construction Report.'
I The information source is Data Quick Information Systems. The original data are taken from
county records and the prices are calculated from the documentary transfer tax. Adjustments are
made to remove very high-end and very low-end sales.
500 SOUTH GRAND AVENUE,SUITE 1480 LOS ANGELES,CALIFORNIA 90071 `- PHONE 213 622 8095 FAX 213 622 5204
0704009.doc;HTB:KHH:gbd
WWW.KEYSERMARSTON.COM 14066.004/014
To: Mary Beth Broeren, City of Huntington Beach April 9, 2007
Subject: Inclusionary Housing Ordinance- In-Lieu Fee Update Page 2
KMA used the fourth quarter reports for 2006 and 2005 to derive the percentage change
in Orange County sales prices for new homes. That information indicates that the
median price in December 2005 was $707,500 and the median price in December 2006
was $792,000. This represents an 11.94% increase. If this increase is applied to the
fee schedule recommended by KMA in January 2006, the resulting schedule for 2007 is
as follows:
2007 In-Lieu Fee Schedule
Project Size Ownership Rental
Three Units $8.28 $4.48
Four Units $9.29 $5.04
Five Units $10.41 $5.60
Six Units $11.42 $6.16
Seven Units $13.32 $7.16
Eight Units $13.54 $7.28
Nine Units $14.55 $7.84
0704009.doc;HTB:KHH:gbd
14066.004/014
ATTACHMENT #4
Landscaping Tree wells adjacent to landscape parkways on the
e of curb is encouraged, however shall not
encroach into ' . 24 foot wide drive aisle.
Also see Chapter 232 Lan ng
230.26 Affordable Housing (3687-12/04)
A. Purpose.
1. The purpose and intent of this Chapter is to implement the goals, objectives and
policies of the City's Housing Element. It is intended to encourage very low, low-and
median income housing, which is integrated, compatible with and complements
adjacent uses,and is located in close proximity to public and commercial services.
(3687-12/04)
2. The affordable housing program is one tool the City utilizes to meet its commitment
to provide housing affordable to all economic sectors,and to meet its regional fair-
share requirements for construction of affordable housing. (3687-12/04)
B. Applicability. This section shall apply to new residential projects three(3)or more units
in size. (3687-12/o4)
1. A minimum of ten(10)percent of all new residential construction shall be
affordable housing units. (3687-12/04)
2. Rental units included in the project shall be made available to very low or low-
income households based on the Orange County Median Income, adjusted for
appropriate family size, as published by the United States Department of Housing
and Urban Development or established by the State of California,pursuant to
Health and Safety Code Section 50093, or a successor statute. (3687-12/04)
3. For sale units included in the project shall be made available to very low, low or
median income level households based on the Orange County Median Income,
adjusted for appropriate family size, as published by the United States Departmen
of Housing and Urban Development or established by the State of California,
pursuant to Health and Safety Code Section 50093, or a successor statute. (3687-12/)4)
4. Developers of residential projects consisting of nine or fewer units may elect to
pay a fee in lieu of providing the units on-site to fulfill the requirement of the
Section,unless the affordable housing requirement is outlined as part of a specific
plan project. (3687-12/04)
5. Developers of residential projects may elect to provide the affordable units at an
off-site location pursuant to subsection B unless otherwise outlined as part of a
specific plan project. If affordable units are off-site,they must be under the full
control of the applicant, or other approved party. (3687-12/04)
6. New residential projects shall include construction of an entirely new project or
new units added to an existing project. For purposes of determining the required
number of affordable housing units, only new units shall be counted. (3687-12/04)
Huntington Beach Zoning and Subdivision Ordinance Chapter 230 Page 17 of 5
C. Fees in Lieu of Construction.
1. Fees paid to fulfill the requirements of this Section shall be placed in the City's
Affordable Housing Trust Fund,the use of which is governed by subsection E.
(3687-12/04)
2. The amount of the in-lieu fees shall be calculated using the fee schedule
established annually by resolution of the City Council. (3687-12/04)
3. One hundred(100)percent of the fees required by this Section shall be paid prior
to issuance of a building permit. (3687-12/04)
4. Fees paid as a result of new residential projects shall be based upon the total
number and size of the new residential units which are to be constructed. (3687-
12/04)
D. Off-Site Construction of Affordable Units. Except as may be required by the California
Coastal Act and/or the California Government Code Section 65590 or a successor statute,
developers may provide the required affordable housing off-site,at one or several sites,
within the City of Huntington Beach. (3687-12/04)
1. Off-site projects may be new construction or major physical rehabilitation,equal
to more than one-third the value of the existing improvement,excluding land
value, of existing non-restricted units conditioned upon being restricted to long-
term affordability. "At Risk"units identified in the Housing Element or mobile
homes may be used to satisfy this requirement. (3687-12/04)
2. All affordable off-site housing shall be constructed or rehabilitated prior to or
concurrently with the primary project. Final approval (occupancy)of the first
market rate residential unit shall be contingent upon the completion and public
availability,or evidence of the applicant's reasonable progress towards attainment
of completion,of the affordable units. (3687-12/04)
E. Miscellaneous Provisions.
1. The conditions of approval for any project that requires affordable units shall
specify the following items: (3687-12/04)
(a) The density bonus being provided pursuant to Section 230.14,if any; (3687
12/04)
(b) The number of affordable units; (3687-12/04)
(c) The number of units at each income level as related to Orange County
Median Income; and (3687-12/04)
(d) A list of any other incentives offered by the City. (3687-12/04)
2. An Affordable Housing Agreement outlining all aspects of the affordable housing
provisions shall be executed between the applicant and the City and recorded with
the Orange County Recorder's Office prior to issuance of the first building permit
(3687-12/04)
3. The Agreement shall specify an affordability term of not less than sixty(60)years
(3687-12/04)
Huntington Beach Zoning and Subdivision Ordinance Chapter 230 Page 18 of 55
4. In a project requiring an in-lieu fee,the applicant shall execute and record an
Agreement to pay an Affordable Housing In-Lieu Fee. (3687-12/04)
5. All affordable on-site units in a project shall be constructed concurrently with or
prior to the construction of the primary project units unless otherwise approved
through a phasing plan. Final approval(occupancy)of the first market rate
residential unit shall be contingent upon the completion and public availability, or
evidence of the applicant's reasonable progress towards attainment of completion,
of the affordable units. (3687-12/04)
6. All affordable units shall be reasonably dispersed throughout the project unless
otherwise designed through a master plan, shall contain on average the same
number of bedrooms as the market rate units in the project, and shall be
comparable with the market rate units in terms of exterior appearance,materials
and finished quality. (3687-12/04)
7. Affordable Housing Trust Funds shall be used for projects which have a minimum
of fifty(50)percent of the dwelling units affordable to very low-and low-income
households, with at least twenty(20)percent of the units available to very low-
income households. Concurrent with establishing the annual fee schedule pursuan
to subsection C, the City Council shall by resolution set forth the permitted uses
of Affordable Housing Trust Funds.All units that obtain Affordable Housing
Trust Funds shall maintain the affordability of the units for a minimum of sixty
(60)years. The funds may, at the discretion of the City Council,be used for pre-
development costs, land or air rights acquisition,rehabilitation, land write downs,
administrative costs, gap financing, or to lower the interest rate of construction
loans or permanent financing. (3687-12/04)
8. New affordable units shall be occupied in the following manner: (3687-12/o4)
(a) If residential rental units are being demolished and the existing tenant(s)
meets the eligibility requirements,he/she shall be given the right of first
refusal to occupy the affordable unit(s); or (3687-12/04)
(b) If there are no qualified tenants,or if the qualified tenant(s)chooses not to
exercise the right of first refusal, or if no demolition of residential rental
units occurs,then qualified households or buyers will be selected. (3687-12/ )
F. Price of Affordable Units. Affordable units shall be sold or rented at prices affordable to
very low, low-or median-income households pursuant to terms of the Affordable Housin
Agreement. (3687-12/04)
230.2 eserved)
230.30 (Reserved)
Non-Residential Districts
230.32 Service Stations
The following supplemental development standards 1 apply to the Service Station use.
classification.
A. Minimum parcel size. 22,500 square feet.
Huntington Beach Zoning and Subdivision Ordinance Chapter 230 Page 19 of 55
ATTACHMENT #5
Affordable Housing In -Lieu Fee
May 7,, 2007
Request
oAdopt affordable housing in - lieu fee for
i small residential projects with 3 to 9 units,
pursuant to a study prepared by Keyser
Marston Associates ( KMA)
oDirect staff to process text changes to the
affordable housing ordinance
Background
') o City Council approved affordable housing
ordinance October 2004
o Ordinance allows for an in- lieu fee for
projects with 3 to 9 units
o City Council reviewed the in - lieu fee
nexus study at a Study Session May 2006
o City Council Ad Hoc Committee formed
and met July 2006
o Staff directed to process the in- lieu fee as
calculated by KMA and report on other
items
Existing Affordable Housing
Ordinance Requirements
I o Applies to new residential projects with
� 3 or more units
o Requires 10% of units as affordable (on -
site or off-site)
o Requires for-sale units at Median income
or lower; requires rental units at Low or
Very Low income
o Allows payment of in- lieu fee for only
projects with 3 to 9 units .
In-Lieu Fee Methodology
o Calculate Affordability Gap
o Difference between market rate prices and
income restricted (affordable) prices
o Calculate Effective Cost to Developer
o Affordability Gap per affordable unit x required
number of affordable units
o Establish Base In - Lieu Fee Amount
o Effective Cost / Total Sq . Ft. of Project
o Create a Small Project In- Lieu Fee
o Adjust Base In-Lieu Fee for small projects
In-Lieu Fee Methodology (cont'd
o Affordability Gap
o Ownership Project = $437,000
o Rental Project = $105,000
o Effective Cost to Developer (Gap x to%)
o Ownership Project = $43,700
Q Rental Project = $10,500
o Establish Base In-Lieu Fee (cost/Avg. sq. Ft.)
a Ownership Project = $24 per sq. ft.
o Rental Project = $12 per sq . ft.
o Create a Small Project In-Lieu Fee
(46% decrease in Base Fee)
• 9-unit Ownership Project = $13 per sq. ft.
0 9-unit Rental Project = $7 per sq . ft.
O In-Lieu Fee study calculations updated for inflation
a Ownership Project = $14.55 per sq. ft.
Q Rental Project = $7.84 per sq. ft.
Proposed In- Lieu Fee
In-Lieu Fee Per Square Foot
f Of Habitable Areal
Project Size Ownership Rental
(No. of Units) Projects Projects
Three $8.28 $4.48
Four $9.29 $5.04
Five $10.41 $5.60
Six $11 .42 $6. 16
Seven $13.32 $7. 16
Eight $13.54 $7.28
Nine $14.55 $7.84
'Habitable area excludes garage, porch, decks/
balconies.
Analysis
\� o In - Lieu Fee methodology based on well-
established , accepted practice
o Adoption would provide alternative means
for small projects to satisfy requirements
o In - Lieu Fee revenues would be deposited
in a Housing Trust Fund
o Revenues would be used for uses listed in
ordinance, including land acquisition ,
rehabilitation , gap financing , etc.
o Development community has expressed
interest in having the fee based solely on
rental projects due to cost/feasibility .
Analysis (cont'd )
� o KMA recommends that the City make
some changes to its affordable housing
ordinance, to improve clarity and
consistency with other regulations .
• Specify that ownership projects are at Median
income level and rental projects are at low
income levels.
o Specify the state code sections that would be
used to calculate affordable housing cost.
o Specific that only allow new development and
substantially rehabilitated units may be used
to fulfill off-site requirements.
Recommendation
� o Staff recommends the City Council :
o Adopt the Affordable Housing In -
Lieu Fee for small projects
o Direct that a zoning text
amendment be processed to
modify the affordable housing
ordinance pursuant to KMA"s
recommendations .
RCA ROUTING SHEET
INITIATING DEPARTMENT: PLANNING
SUBJECT: Affordable Housing In-Lieu Fee
COUNCIL MEETING DATE: May 7, 2007
RCA ATTACHMENTS STATUS
Ordinance (w/exhibits & legislative draft if applicable) Attached ❑
Not Applicable ❑
Resolution (w/exhibits & legislative draft if applicable) Attached
Not Applicable ❑
Tract Map, Location Map and/or other Exhibits Attached ❑
Not Applicable ❑
Attached ❑
Contract/Agreement (w/exhibits if applicable) Not Applicable ❑
(Signed in full by the City Attorney)
Attached El
Subleases, Third Party Agreements, etc. Not Applicable ❑
Approved as to form by City Attome
Certificates of Insurance (Approved b the City Attome Attached ❑
( pp Y Y Y) Not Applicable ❑
Attached ❑
Fiscal Impact Statement (Unbudget, over $5,000) Not Applicable ❑
Attached
Bonds (If applicable) Not Applicable ❑
Attached ❑
Staff Report (If applicable) Not Applicable ❑
11
Commission, Board or Committee Re ort If applicable Attached
p ( Pp ) Not Applicable ❑
s/Conditions for Approval and/or Denial Attached ElFindin
9 pP Not Applicable ❑
EXPLANATION FOR2 MISSING ATTACHMENTS
REVIEWED RETURNED FORWARDED
Administrative Staff
Assistant City Administrator Initial VE
City Administrator Initial )
-City Clerk
EXPLANATION FOR RETURN OF ITEM:
Only)(Below Space For City Clerk's Use
C4 54—:2e ` _ w -so
RCA Author: SH:MBB
NOTICE OF PUBLIC HEARING
BEFORE THE CITY COUNCIL OF THE
CITY OF HUNTINGTON BEACH
NOTICE IS HEREBY GIVEN that on Monday May 7, 2007, at 6:00 p.m. in the
City Council Chambers, 2000 Main Street, Huntington Beach, the City Council
will hold a public hearing on the following planning and zoning items:
❑ 1. AFFORDABLE HOUSING IN-LIEU FEE: Applicant: City of Huntington
Beach, 2000 Main Street, Huntington Beach, CA 92648 Request: To
establish an affordable housing in-lieu fee for new residential projects that
consist of three to nine units. Location: Citywide Proiect Planner:
Mary Beth Broeren
NOTICE IS HEREBY GIVEN that Items No. 1 is exempt from the provisions of
the California Environmental Quality Act pursuant to Section 15061(b)(3).
ON FILE: A copy of the proposed requests are on file in the Planning
Department, 2000 Main Street, Huntington Beach, California 92648, for
inspection by the public. Copies of the staff reports will be available to interested
parties at the City Clerk's Office on Thursday May 3, 2007.
ALL INTERESTED PERSONS are invited to attend said hearing and express
opinions or submit evidence for or against the applications as outlined above. If
you challenge the City Council's action in court, you may be limited to raising
only those issues you or someone else raised at the public hearing described in
this notice, or in written correspondence delivered to the City at, or prior to, the
public hearing. If there are any further questions please call the Planning
Department at 536-5271 and refer to the above items. Direct your written
communications to the City Clerk
Joan L. Flynn, City Clerk
City of Huntington Beach
2000 Main Street, 2nd Floor
Huntington Beach, California 92648
(714) 536-5227
D:\Documents and Settings\esparzap\Local Settings\Temporary Internet
Files\OLK106E\070507.doc
NOTICE OF PUBLIC HEARING
BEFORE THE CITY COUNCIL OF THE
CITY OF HUNTINGTON BEACH
NOTICE IS HEREBY GIVEN that on Monday May 7, 2007, at 6:00 p.m. in the
City Council Chambers, 2000 Main Street, Huntington Beach, the City Council
will hold a public hearing on the following planning and zoning items:
❑ 1. AFFORDABLE HOUSING IN-LIEU FEE: Applicant: City of Huntington
Beach, 2000 Main Street, Huntington Beach, CA 92648 Request: To
establish an affordable housing in-lieu fee for new residential projects that
consist of three to nine units. Location: Citywide Project Planner:
Mary Beth Broeren
NOTICE IS HEREBY GIVEN that Items No. 1 is exempt from the provisions of
the California Environmental Quality Act pursuant to Section 15061(b)(3).
ON FILE: A copy of the proposed requests are on file in the Planning
Department, 2000 Main Street, Huntington Beach, California 92648, for
inspection by the public. Copies of the staff reports will be available to interested
parties at the City Clerk's Office on Thursday May 3, 2007.
ALL INTERESTED PERSONS are invited to attend said hearing and express
opinions or submit evidence for or against the applications as outlined above. If
you challenge the City Council's action in court, you may be limited to raising
only those issues you or someone else raised at the public hearing described in
this notice, or in written correspondence delivered to the City at, or prior to, the
public hearing. If there are any further questions please call the Planning
Department at 536-5271 and refer to the above items. Direct your written
communications to the City Clerk
Joan L. Flynn, City Clerk
City of Huntington Beach
2000 Main Street, 2nd Floor
Huntington Beach, California 92648
(714) 536-5227
D:\Documents and Settings\esparzap\Local Settings\Temporary Internet
Fi1es\0LK106E\070507.doc
Easy Peel Labels !A i A See Instruction Sheet
Use Avery®TEMPLATE 59"-Ue 'I i j&W I?@RWKLIsr wm— for Easy Peel Feature 1 WAWRY'j3)5960TM
1
MAILING LABELS-
President Roger Kinoshita Kerry Smith
H.B.Chamber of Commerce 500 N.State College Blvd. Ste. 100 Harbinger Homes
19891 Beach Blvd.,Ste. 140 Orange,CA 92868 2728 17d,St.
Huntington Beach,CA 92648 Huntington Beach,A 92648
Dave Stefanides William D. Holman Dave MacLeod
Orange County Assoc.of Realtors PLC 19671 Beach Blvd.,Ste. 101
25552 La Paz Road 19 Corporate Plaza Drive Huntington Beach,CA 92648
Laguna Hills,CA 92653 Newport Beach CA 92660-7912
Bijan Sassounian Dick Harlow Michael C.Adams Associates
21190 Beach Blvd. 1742 Main Street PO Box 382
Huntington Beach,CA 92648 Huntington Beach,CA 92648 Huntington Beach,CA 92648-0382
Duf Sfreddo Dick and Kevin Kelter Jeff Bergsma
5622 Research Dr. 518 Oceanhill Dr_ Team Design/Construction
Huntington Beach,CA 92649 Huntington Beach,CA 92648 221 Main St.,Ste.S
Huntington Beach,CA 92648
President Keith Dawson Gil Aousizerat
Huntington Beach Tomorrow 15581 Placid Cir. 17912 Gothard St.
PO Box 865 Huntington Beach,CA 92647 Huntington Beach,CA 92647
Huntington Beach,CA 92648
Julie Vandermost Ed Bonnani Hearthside Homes
BIA-OC 5622 Research Dr. Ed Mountford
17744 Sky Park Circle,#170 Huntington Beach,CA 92649 6 Executive Circle,Suite 250
Irvine CA 92614-4441 Irvine,CA 92614
Richard Spicer Michael Gagnet Joe Gergen
SCAG Makar Properties,LLC 211-B Main St
818 West 7th, 12th Floor PO Box 7080 Huntington Beach,CA 92648
Los Angeles,CA 90017 Newport Beach,CA 92660
Sarah Phan Bob Reed John&Kathy Zehnder
2500 S. Fairview St,#P 528 14f St, 614 20d,St.
Santa Ana,CA 92704 Huntington Beach,CA 92648 Huntington Beach,CA 92648
JCC Homes John Laing Homes Dave Oddo
Steve Schwartz Celena Chen 815 Main St
3480 Torrance Blvd.,Ste. 300 3121 Michelson Dr.,Ste. 200 Huntington Beach,CA 92648
Torrance,CA 90503 Irvine,CA 92612-7672
Shea Homes Dave Birt Larry Brose
Ron Metzler John Laing Homes Robert Mayer Corp.
603 S.Valencia Ave. 6401 Warner Ave.Apt.408 660 Newport Center Dr.,Ste. 1050
Brea,CA 92823 Huntington Beach,CA 92647 Newport Beach,CA 92660
/0 �- — �
Etiquettes faciles a peter A !N — Z Consultez la feuille www.avery.com
Utilisez le gabarit AVERY@ 5960' Sens de chargement Winstruction 1-800-GO-AVERY
CITY COUNCILlREDEVELOPMENT AGENCY PUBLIC HEARINGREQUEST
SUBJECT: a-t0 C._,
DEPARTMENT. MEETING DATE: • U�]
CONTACT. PHONE:
N/A YES NO
Is the notice attached?
( ) ( ) Do the Heading and Closing of Notice reflect City Council(and/or
Redevelopment Agency)hearing?
( ) ( ) Are the date,day and time of the public hearing correct?
( ) ( ) If an appeal,is the appeilant's name included in the notice?
( ) ( ) If Coastal Development Permit,does the notice include appeal language?
( ) ( ) Is there an Environmental Status to be approved by Council?
( ) ( ) Is a map attached for publication?
i
( ) ( ) Is a larger ad required? Size
r o-t cep';rem ,16 4 V-557Z t,.. C---,
( ) ( ) Is the verification statement attached indicating the source and accuracy of the
mailing list?
( ) ( ) Are the applicant's name and address part of the mailing labels?
( ) ( ) Are the appecant's name and address part of the mailing labels?
( ) ( ) If Coastal Development Permit,is the Coastal Commission part of the mailing
labels?
( ) ( ) If Coastal Development Permit,are the Resident labels attached?
1 ( ) ( ) Is the33343 report attached? (Economic Development Dept. items only)
Please complete the following:
1. Minimum days from publication to hearing date C�
2. Number of times to be published
3. Number of days between publications 'J- -
-�� NOTICE OF F?UBLIC HEARING '!
BEFORE THE CITY COUNCIL OF THE
CITY OF HIJNTINGTDN BEACH
NOTICE IS HEREBY GIVEN that on Monday May 7, 2007,at 6:00 p.m. in the City ii .
Council Chambers,2000 Main Street, Huntington Beach,the City Council will hold!a
public hearing on the following planning and zoning items:
i
1. AFFORDABLE HOUSING IN-LIEU FEE: Applicant: City of,'Huntington Beach,
PROOF OF PUBLIC _ 2000 Main Street,Huntington Beach, CA 92648 Request:To establish an
affordable housing in-lieu fee for new residential projects that consist of three to
nine:units. Location: Citywide Project Planner: Mary Beth Broeren'
NOTICE IS HEREBY GIVEN•that,Items No. 1 is exempt from the provisions'of the 't
STATE OF CALIFORNIA) California Environmental'Quality:Act pursuant to Section 15061(b)(3).
�. ON FILE:'A copy of the proposed requests are on file in the Planning Department, 2000
COUNTY OF ORANGE Main Street, Huntington Beach, California 92648,for inspection by the public. Copies
of the staff reports will be available to interested parties at the'City Clerk's Office on,
Thursday May 3, 2007. j
}
am a Citizen of the United! ALL INTERESTED PERSONS are invited to attend said hearing and express opinions or
submit evidence for or against the applications as outlined above. If you challengelthe .
resident of the County afG City Council's action in court,you may be limited to raising only those issues you or
over the age of eighteen ye'' . someone else raised at the public hearing described in this notice, or in written ±'
a t0 or Interested In the correspondence delivered to the City at, or prior to,the public hearing..If there are Any
p further questions please call the iPlanning Department at 536-5271 and refer to the!
matter. I am a principal above items. Direct your written communicationsJo,the City Clerk
HUNTINGTON BEACH IN ,loan L. Flynn, City Clerk �!
a newspaper of generc City of Huntington Beach 4
2000 Main Street, 2nd Floor II
printed and published in Huntington Beach;California 92648
Huntington Beach, Count (714)536-5227
---
i
State of California, and that attached- -
Notice is a true and complete copy,,as
was printed and published in the
Huntington Beach issue of said
nevispaper C will'the Issuefsi C":
APRIL 26,.2007
I declare, under penalty of perjury, that
the foregoing is true and correct.
Executed on APRIL 26, 2007
at Costa Mesa, California.
Signature