Back on November 27, the council put forward interim provisions for extending the city’s affordable housing requirement. But they also put forward potential changes to the requirements for vertical mixed-use developments which were previously exempt from affordable housing requirements.
The proposal that came up was the idea that they would replace current exemptions with a more flexible requirement for projects located within the core area with a lower threshold for project located outside of the core area, with a 5 percent target for low income housing.
In addition, the council wishes to clarifying alternative affordable rental requirements by explicitly stating that “the City Council may adjust the inclusionary percentage up or down based on project size and/or the income/rent levels provided.”
Councilmember Will Arnold said that at the bottom line, “we want to see these things built.” He was concerned that if they made the requirements too high, nothing would be built.”
He stated, “35 percent of nothing, is nothing. So if the thing doesn’t get built because we’ve put an onerous requirement on there, then no one gets to live there… So that’s the balancing act that we have in front of us.”
The question was what the right level is and there he was less certain. “Fifteen percent is not feasible,” he said. But, then again, “zero percent is unacceptable.” He said, “I would be hard pressed to approve either of (the current proposed mixed use projects) if the affordable number were zero.”
Mayor Brett Lee recommended eliminating the full vertical mixed-use exemptions and suggested they set the number to five percent, but, as a nod to the fiscal difficulty, only require that five percent be for low income (as opposed to very low or extremely low) income people.
“The idea here is that it’s not zero,” he said. “We’ll work with you.”
Will Arnold pushed for a core area carve out, which he felt along with adding flexibility “gives me a comfort level.” He said, “We don’t want people not to redevelop because of this.”
Brett Lee stated that “while vertical mixed-use and stacked flats (in the core) do not have a numerical requirement, there is an expectation that they will provide some level of resources for the city’s affordability program.”
Thus at the November 27 discussion, the council decided that “the inclusionary requirements for vertical mixed-use and stacked condominiums should be lower than other residential development prototypes” and “the inclusionary requirements for vertical mixed-use and stacked condominiums should be more flexible in the core area than other parts of the City.”
The language then is that residential development constructed as either vertical mixed-use or stacked condominiums “are exempt from the standard and alternative affordable housing requirements as long as they provide an individualized affordable housing plan.”
The plan must comply with one of the following stipulations. For projects within the core area, they are required to provide “some percentage of on-site affordable units, bedrooms, or beds, some payment of in-lieu fees, or another mechanism as deemed appropriate by the City Council.”
For those projects outside of the core area: they must provide “a target of 5% low income units, bedrooms, or beds or another mechanism as deemed appropriate by the City Council.”
Staff notes that if a developer submits an application “that is eligible for the by-right process and the project is located within the City’s core area, staff will incorporate the determination of an appropriate inclusionary amount into its administrative review process.”
In addition, “the proposed amendment will not impact applications currently under review.” That means neither the University Research Park nor the University Mall are impacted by this change. Staff adds, “the amendments will only apply to applications submitted after the ordinance takes effect, which will be 30 days following the ordinance’s second reading.”
Finally, the council has codified in its alternative affordable housing requirements “that the City Council has the discretion to adjust the inclusionary percentage up or down based on project size and/or the income/rent levels provided.”
Staff notes that “This change is meant to address and acknowledge that larger sized projects may have greater economies of scale and therefore may be able to provide more affordability than smaller sized projects. This change is also meant to address and acknowledge that providing units, bedrooms, or beds at the very low and extremely low income levels is more costly than providing units, bedrooms, or beds at the low income level.”
—David M. Greenwald reporting