Santa Cruz Legislative Watch: October, 2001 – Affordable Housing

OCTOBER, 2001

COUNTY OF SANTA CRUZ

September 25, Public Hearing Establishes the Year 2002 Growth Goal

Each year, the County is required, through implementation of the Growth Management System, to set an annual growth goal for the upcoming year. As part of that process, staff prepares a Growth Goal Report for consideration by the Planning Commission and the Board of Supervisors. The Year 2002 Growth Goals Report includes the following findings:

  1. Population Trends – During 2000, the County’s unincorporated population grew at a rate of 0.8 percent which is higher than the 2000 adopted percent growth goal of 0.5 percent. The County, as a whole, grew at 0.7 percent. The entire State of California grew at a rate of 1. 7 percent.
  2. Growth Impacts – The most significant development impact on resources in the County consists of the potential and actual water supply shortfalls countywide. Water agencies countywide are discussing these issues.
  3. Housing Goals – Over the last 22 years, 14. 9 percent of the new residential development in the unincorporated area has been constructed as affordable housing.

Affordable Housing production as a percentage of total housing production in the first eight months of 2001 is 15 percent. The Year 2002 Growth Goal Report recommends a continuance of the .50 percent growth goal established for 2001.

Current status of the 2001 building permit allocation shows, as of September 1, 2001, the 2001 allocation set by the Board of Supervisors for Urban 1-4 bedrooms is 76, for Urban 5+ bedrooms is 76 and for Rural is 75. Actual committed allocation for Urban 1-4 bedrooms is 31, for Urban 5+ bedrooms is 50 and for Rural is 59. The balance available for allocations for Urban 1-4 bedrooms is 4, for Urban 5+ bedrooms is 26 and for Rural is 16. The Board of Supervisors agreed to the Planning Department’s recommendation for a .50 percent growth goal for 2002 carryover, but not utilization of unused 2001 market rate housing allocations at this time, and a distribution of housing allocations by project location, type and size as distributed in previous years. This matter will be referred to the Planning Commission for consideration and recommendation to the Board of Supervisors. The public hearing will be continued to December 4, 2001, with direction to staff to return to the Board of Supervisors with the Planning Department’s recommendation and a resolution for action. An additional directive with regard to 2001 permits states if they utilize any of the prior year’s reserves as a part of this year’s requirement, staff would return to the Board with a report on potentially increasing the affordable requirement as it relates to the use of those reserved permits, provided that it’s more than one unit. “Watch”!

Board of Supervisors approves the Planning Department Advanced Planning Work Program 2001/2002.

On September 25, the Board of Supervisors reviewed and approved a work program for the Advanced Planning Section of the Planning Department. The purpose of this program is to establish priorities and provide direction for land use policies and regulations, various planning studies and special projects. To date, this special department has developed an Urban Services Limit Line along the Watsonville City Limits consistent with a Memorandum of Understanding between the County, City and Coastal Commission, has amended the Ben Lomond Town Plan regarding septic system requirements and a specific park site and roadway alignment; has amended and rezoned the General Plan/Local Coastal Plan (GP/LCP) to designate two properties (McGregor and Moran Lake) as future park sites, has completed a draft of the Seacliff Village Plan, has completed the first phase of the update to the County’s Historic Resource Inventory and has cleaned-up amendments to the General Plan/Local Coastal Program (GP/LCP) regarding geologic hazard definitions.

Projects that are currently in progress include Timber Ordinance amendments pending resolution of litigation, “Early Notification” to the public for discretionary projects, ongoing advanced planning tasks involving the development of the GP/LCP, LAFCO annexation reviews preparation of Historic Resource Commission materials’ Inter-agency Technical Advisory Committee participatio􀀵 in the Santa Cruz Regional Transportation Commission, Census preparation, growth goals and monitoring of the environmental goals as stated in Chapter 16.92 of County Code. Ongoing housing tasks include all work associated with the Housing Advisory Commission (HAC), the Measure “J” Program oversight, preparation of the Housing Element and Second Unit monitoring.

First Priority Projects are General Plan Update timeline; Housing Element preparation and completion by December 2002; HAC changes to the “in lieu” fee program and affordable housing calculation method to increase the production of affordable housing; amendments to the Design Review Ordinance; local version of the State Right-to-Farm law; Rezoning/Land Use Designation Amendments to provide “clean up” actions on specific properties in Aptos and Carbonera; Rural Density Matrix Amendments to address the procedure for reviewing technical documents related to groundwater recharge areas.

New projects that are of secondary pnonty include Davenport Town Plan; Aptos Village design Framework Revision; Family Daycare Center Ordinance amendments· non-conforming non-residential uses ordinance; amendments; Agricultural Preserve/Open Space Easement combining zone clean-up; Congregate Care/ Assisted Care Facilities policies and ordinance amendments. *NOTE: Public Hearing at Planning Commission meeting on October 10. “Watch”!

Combined Affordable Housing Meeting

The County Board of Supervisors will host City Council members of the Cities of Santa Cruz, Capitola, Scotts Valley and Watsonville at 1:30 pm on October 2, at 701 Ocean Street, Supervisor’s Chambers. “Watch”!

CITY OF WATSONVILLE

City Council Adopts Resolution For the 2001 Housing “In Lieu” Fee on 9/25

The new Affordable Housing Ordinance specifies that the City Council establish the affordable housing in-lieu fee by resolution. Thereafter, the in-lieu fee is to be adjusted annually by fifty percent of the annual percentage increase in the Housing Price Index (published from time to time by the Office of Federal Housing Enterprise Oversight). Throughout discussions with both the Housing Safety Committee and the Housing Task Force, formed specifically to review the original Affordable Housing Ordinance, the sentiment was expressed that the existing affordable housing in-lieu fee was not sufficient to encourage developers to build affordable units rather than pay an in-lieu fee. For this reason, the ability for developers to pay an in-lieu fee was eliminated from the new Affordable Housing Ordinance with the exception of residential development projects or land divisions that include six or fewer new units or lots, commercial and industrial development projects exceeding one thousand square feet of gross floor area or condominium conversions.

The City first imposed an Affordable Housing in-lieu fee in 1991 with the adoption of the first Affordable Housing Ordinance. At that time, a fee schedule was adopted for land divisions, residential developments and commercial/industrial projects. The fees, which have since been adjusted annually pursuant to the Consumer Price Index are; Original Land Division fees – $.80 for the first 20,000 sq. ft. ofland, $1.00 per square foot thereafter; Original Residential development fees – single family detached $2.50 per sq. ft., townhome/condo $4,000 per unit for the first four units, $5,000 per unit thereafter; Original Commercial/Industrial fees – $.25 per sq. ft. up to 10,000 sq. ft, $.50 per square foot thereafter.

For comparison, the minimum required per unit in-lieu fee charged by the City of Santa Cruz is $25,000, while Santa Cruz County charges $160,000. In an effort to encourage in-fill, considering the severe housing shortage, the Housing Task Force requested that in-lieu fees not be increased to such an extent as to discourage residential development. The Housing Task Force and the planning staff generally endorsed and recommended establishing the 2001 Affordable Housing in-lieu fees in the amounts of; Residential Development or Land Divisions including six or fewer new units or lots – Single Family Detached – $10,000 per unit, . Multi-family (includes apartments, townhouses, cooperatives and condominiums) – $5,000 per unit; Commercial and Industrial Developments – 0-1, 000 gross sq. ft of floor area – $0.00 per sq. ft., 1,001 and more gross sq ft. – $0.35 per sq. ft.; Condominium Conversions – $5000 per unit for those projects that did not pay an in-lieu fee when initially constructed.

The in-lieu fees are to be adjusted annually equivalent to 5 0 percent of the annual percentage change in the House Price Index. In-lieu fee proceeds are restricted to projects that increase or improve the affordable housing stock, which is a specific goal of the City Council. While the inlieu fees are substantially less than the actual cost of producing the affordable housing unit, the in-lieu fees will generate revenue for the City’s Affordable Housing Fund. “Watch to see if this generates more affordable units!”

CITY OF SCOTTS VALLEY

Skypark Town Center

Developers George Ow, Jr. and Barry Swenson attempted a retail project on property with frontage on Mount Herman Road and Kings Village Road, but could not proceed, partly due to two propane companies who refused to move their businesses. Bill Brooks is now stepping into the ring to take on the challenge with New Leaf Market as the anchor tenant. Because Mr. Brooks is doing a smaller project than the Ow/Swenson proposal, the propane businesses are not an issue. However, the existing specific plan and environmental framework reqmre modification to implement the most recent version of the master plan. Existing mitigation and traffic measures need to be updated. The project has been designated as a part of the Critical Habitat Zone for the zayante bandwinged grasshopper and new environmental analyses will be needed. This will be one to “Watch”!

Glenwood Update

Keenan Land Company, owner of the Glenwood property, in a letter to the Friends of Glenwood, states, “Now that the Glenwood residential project has been approved by the Scotts Valley City Council, we are in a position to offer the property for sale to those interested in preserving the land for open space. In anticipation of this possible sale, and following the council’s decision on August 15, we immediately began discussions with the Santa Cruz County Land Trust and the State Wildlife Conservation Board (WCB). These parties have expressed interest in purchasing the property in the past and have indicated a desire to pursue an acquisition at this time.” The owner is getting the property appraised and has offered the Land Trust, WCB and the Friends of Glenwood, an exclusive right to negotiate to purchase the land for open space until January 1, 2002. “Watch” this one!

CITY OF CAPITOLA

Miscellaneous Housing Contracts Approved by RDA Board of Directors

Carolyn Flynn has been contracted since September 1997 and will continue to assist in the coordination and management of Community Development Block Grant funds (CDBG). These funds are used for various housing programs such as Habitat for Humanity, Loma Vista Mobile Home Park Resident Acquisition, First Time Homebuyer Program, Housing Rehabilitation Program, Security Deposit/Last Month’s Rent Assistance Program and the Emergency Housing Assistance Program.

The 2001/2002 Redevelopment Agency (RDA) Housing Set-Aside Fund activity and budget was also approved for an amount exceeding $1.4 million. The Housing Authority of the County of Santa Cruz was approved to continue to provide professional technical services on RDA and Statefunded programs and projects . ·

The Community Action Board (CAB) will also continue to be funded by the RDA to implement the Emergency Housing Assistance Program within the City of Capitola. The Emergency Housing Program is a “homelessness prevention” program that assists both renter and homeowner households in avoiding eviction due to unemployment, sickness, accident or similar emergency through no fault of their own. Assistance is available for up to two months rent or mortgage payments, paid directly to landlord or lending institution. The criteria for emergency housing assistance includes an income qualification of less than 130 percent of poverty level for the Santa Cruz area, that children are members of the assisted household or that the qualifying household member has a temporary or permanent disability. During FY 00/01, CAB assisted 17 households to avoid eviction in the City of Capitola. In total, those households included 35 individuals, including six individuals with disabilities. Of the 17 households served, 11 of the households had children. For the first time since the program began in 1997, CAB reported a dramatic increase in the request for these services from qualified households and a large increase in the amount requested to fund this program over the next fiscal year compared to last fiscal year.

CITY OF SANTA CRUZ

West Cliff Drive Widening

West Cliff Drive Owner’s Association protested the widening of the bike/pedestrian path, to no avail. City Council voted to approve the plan despite a petition from the Owner’s Association with over 500 signatures. Between Bay Street and Swanton Boulevard, the path will be widened to 14 feet which will narrow the road to 22 feet. The Regional Transportation Committee is providing $1 million and supports the plan. Meanwhile, the West Cliff Drive Owner’s Association plans to continue their protest by filing an appeal to the Coastal Commission. “Watch”!

Proposed Affordable Housing Preservation Ordinance

With the continuing housing crisis, the City presented a draft “Housing Preservation Ordinance”. Upon testimony from various property owners of affordable units, the public hearing resulted in referring the ordinance to a “closed session”. For the time being, this ordinance has been shelved.

Several owners felt the proposed ordinance was a violation of their property rights and a restraint of trade. The staff report that describes the draft ordinance, says that even though 11 percent (2200) of the city’s housing stock now has income and/or rent restrictions, 27 percent (600) of these units are located in multi-family housing projects that have various types of affordability agreements or assistance programs that are set to expire in the near future . Of these units, 25 percent (150) are at risk of experiencing a dramatic escalation of rents to market rate when the loan agreements, contracts or covenants protecting their affordability are fulfilled or expire. According to the staff report, market rents are averaging $1,122 for a one bedroom and $1,709 for a two-bedroom apartment. The loss of these at-risk units could force residents to either leave the community or allocate an increasingly disproportional percentage of their income to housing.

The proposed ordinance was modeled after an ordinance used in the City of San Francisco and covers any multifamily rental housing comprised of four or more rental units receiving any public subsidy or any such units that have received a similar subsidy for which affordability covenants remain in place.

One of the provisions that owners opposed was the need for submitting a Notice of Intent to the Planning Director 18 months prior to taking any action to terminate the affordable status of the project . Then, within 21 days of sending the Notice of Intent, the owner would have been required to provide information to the City to allow it to evaluate the status of the tenants, assess the fair market value of the property and conduct other analyses of the project, with owner’s consent to reasonable inspection of the property and review of financial records pertaining to the development. This would be followed by required public hearings and forwarding of findings to the City.

October, 2001 

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