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HomeMy WebLinkAbout2008/05/07 - Minutes - SpecialMay 7, 2008 CITY OF RANCHO CUCAMONGA CITY COUNCIL MINUTES SPECIAL JOINT MEETING WITH THE PLANNING COMMISSION ' ~ A. CALL TO ORDER -~ ~~ A special joint meeting of the Rancho Cucamonga City Council and Planning Commission was held on Wednesday, May 7, 2008, at City Hall, Tri-Communities Room, 10500 Civic Center Drive, Rancho Cucamonga, California. Mayor Donald J. Kurth, M.D. called the meeting to order at 5:05 p.m. Present were Councilmembers: Rex Gutierrez; Diane Williams (arrived at 5:10 p.m.), Sam Spagnolo, Mayor Pro Tem L. Dennis Michael and Mayor Donald J. Kurth. Present were Planning Commissioners: Howdyshell, Munoz and Wimberly, Vice Chairman Fletcher and Chairman Stewart. Also present were: Jack Lam, City Manager/Executive Director, Pamela Easter, Assistant City Manager; and James Markman, City Attorney/Legal Counsel; Linda Daniels, Redevelopment Agency Director; Tranda Drumwright, Housing Programs Manager; and Kathryn L. Scott, Assistant City Clerk. NOTE: Due to the poor quality of the recording system, inaudible statements are not reflected in the minutes. B. PUBLIC COMMUNICATIONS ~ `. , 61. Frank Williams, Executive Director, Building Industry Association, spoke regarding green building programs. He said the County of San Bernardino was the first County to adopt the "California Green Builder Program." He said it is an incentive-based program to promote more green building within the State of California. He said the BIA is taking the lead to go to each City Council within the County to look at the "California Green Building Program" to consider for adoption. He said he would like to come back at a later time to present the program that the County adopted. C. ITEM(S) OF BUSINESS C1. REVIEW AND DISCUSSION OF INCLUSIONARY HOUSING ORDINANCE A PowerPoint presentation, which is on file in the City Clerk's office, was given by Linda Daniels, Redevelopment Agency Director. Linda Daniels stated that the proposed ordinance is very different from what other cities in the State. of California have adopted in that it does not apply to all residential development. She said in some cities, it applies to every residential development regardless of the number or the zoning. She said the proposed Special City Council/Planning Commission Meeting May 7, 2008 Page 2 ordinance submitted for consideratidn is a limited application and would only apply to three types of residential applications. She said the goal of the ordinance is to provide units on the site that is being developed; it is the goal of the City to disperse units throughout the community by providing the units on the site. She said if it is determined that it is not feasible to provide the units on site, there are alternatives available to both the City and the developer to discuss. A developer may construct new units at a different site or they could acquire and rehabilitate units at a different location; it could be new construction or acquisition rehab, but at a different location than the site that is being proposed for development. She said another alternative is to buy covenants with an existing multi-family project. She said a last alternative, the one that is least desirable to fulfill the requirements of the ordinance, is to pay an in-lieu fee. She said it is the least desirable option, as then the City has the responsibility to go and find sites, which is very time intensive for staff. She said this is not the only tool that will be used; we will continue to use all of the other resources that the Agency and City have available; it is one tool to add to our tool chest for workforce housing. She said the proposed ordinance would also act as the one additional tool in the efforts to meet the workforce housing needs; the City sharing in the development benefit will help to provide the City's workforce housing that is required to provide through State Law. Linda Daniels clarified that an inclusionary ordinance is not required; it is an option the cities can consider Jim Markman stated that if the RHNA (Regional Housing Needs Assessment) numbers are not met, potentially the City would not have a viable, legal housing element of the General Plan that would meet the standards of HCD (State Department of Housing and Community Development), which in turn could mean that they could lock down the redevelopment program, among other things, and Federal funding could be lost. He said the housing element has to try to deal with ways to meet the RHNA requirements. He said this has become fairly ordinary in California for cities to do this. He said this is a very low level entry into the area of inclusionary housing zoning in that it only applies if somebody is trying to generate more housing that wasn't allowed before by seeking legislation, essentially, from the Council. Councilmember Gutierrez asked what other cities in the Inland Empire have inclusionary zoning. Linda Daniels, RDA Director, stated that Claremont is the closest. Frank Williams, BIA, stated there are two cities in San Bernardino County -City of Chino Hills and City of Montclair. Jim Markman, City Attorney, stated that there are six cities in the Inland Empire who have an ordinance: Beaumont, Desert Hot Springs, Hemet, Indio, Laverne, Perris, and the County of San Bernardino. Councilmember Gutierrez stated he and Councilmember Michael are the members of the Housing Subcommittee. He asked about the progress made on affordable units compared to other cities in the state. He said he is curious how much land in the City is available that would potentially be impacted. Linda Daniels stated with the 1700 units, we are about 60% in reaching the goal. She said in other cities that have Redevelopment Agencies, we are in the market-not high, not low. She said most cities in San Bernardino County are within 50 to 60 percent. She said other cities that have had inclusionary ordinances, such as Brea, Irvine, and Palo Alto, are well above our numbers in terms of percentages. She said she will do amore specific study and follow up with a memo to the Commission and the City Council. Linda Daniels stated that had the ordinance been in place in the year 2000, the City would have generated about 491 units; 100 of those would have been single family, with the majority of them multi-family. Jim Markman, City Attorney, stated that Rancho Cucamonga has a fantastic Redevelopment Program. He said some high percentage of the city was put in redevelopment when it wasn't even developed. He said that's a great thing, as the cash flow is fantastic, which also carries with it, however, a tremendous housing requirement. Special City Council/Planning Commission Meeting May 7, 2008 Page 3 Councilmember Gutierrei stated he can see where the building industry comes from when they say that this type of measure discourages housing; what it does is encourage them to not seek more density on a project or encourages them not to go from commercial to residential. He said what if we asked the builders if they would rather contribute to a fund than purchase these foreclosed properties throughout the city and apply those to our affordable housing element. Jim Markman, City Attorney, stated that is happening in Brea. Linda Daniels said if it is not feasible or if the developer offers an alternative, they can apply the housing units, multi-family or single, off site. She said they are looking for units. She said if you are building a 3-bedroom house and can provide a 3-bedroom house somewhere else in the city and it's cheaper, that's fine. If you are building a home but you want to provide your ordinance obligation through multi-family rental units, and not home ownership, that's fine. She said both of those alternatives, buying covenants in apartments or replacing a home that you're building as a home off site, is totally acceptable based on the ordinance that has been drafted. Jack Lam, City Manager, said it is being applied only to the projects where someone is coming in asking for higher value. Whatever it is, you can still ask for the density bonuses and get additional incentives that way. Jim Markman, City Attorney, said the first thing ought to be that the long range decision to be made is an appropriate planning decision. He said you have complete legislative control over any application of this ordinance. He said if somebody comes in and there's an appropriate range of density they could have but they need the legislative action to move to the higher end of that range, which would generate more units and more profit, the question you have to answer is it appropriate at this very low threshold level to ask that developer to share some of that additional financial benefit by contributing to the low and moderate income housing stock in this city. That's the policy question. Mayor Pro Tem Michael stated the subcommittee started off with an inclusionary zoning ordinance that was mirrored more like most all other inclusionary zoning ordinances. He said the consultant gave them information, and then he realized that this is not Rancho Cucamonga. He said they came to the conclusion that it only would be for very restricted cases. He said he is conflicted because he does not see himself increasing densities at will when we know our community is already struggling with every project that comes forth. He needs to hear why this is not good. He said he doesn't know where we go from here, because it's as bare as it can possibly be. Commissioner Fletcher stated it is like a tax; there is no analysis of the cost of doing this. He said he doesn't think it is fair to make a policy irregardless of cost. He said there is a need but he would much rather see it satisfied through incentive programs, and there are several incentive programs available. He said the need to provide this housing is something that is pushed by the State on to the City, and we have not looked at any numbers. He said there is a breakdown of the number of units that we need for very low income, low income, moderate income and above moderate income houses, but it doesn't show what the cost of a house should be for a very low income purchaser. He said he would like to know that. Linda Daniels, Redevelopment Agency Director, said in terms of the Redevelopment Agency, every time a project occurs it will increase the 15% requirement, and to the extent there is no offset or workforce housing provided to balance it, it will be an ever-growing number. She said that they started looking at inclusionary ordinances in 2005/06, so it's been a long, well researched and thought out process; some of the initial conversations with the subcommittee were much more aggressive than what is being presented tonight. She doesn't want to leave them with the thought that the reason for the inclusionary ordinance is because the agency is fairly well committed with housing; she said that was not the catalyst for initiating the ordinance. Kathy Head, Keyser Marston Associates, who provided the financial analysis, stated the trend over the last several years of inclusionary housing ordinance adoptions went from being 130 four years ago to 170 now; went from being 64 to 130 in the previous few years. She said there were master-planned developments that picked up a lot of those units as a result of the inclusionary housing being adopted. She said the big ticket item is a lot of cities in their last housing element cycle, added inclusionary housing ordinances to their tool box because they are trying to meet these RHNA goals. She said it is a combination of both requirements and Special City Council/Planning Commission Meeting May 7, 2008 Page 4 incentives. She said at the end of the day, the idea where you're only doing it on zone changes, only doing it on density enhancements, is the incentive. She said that is getting lost a little bit in the discussion. You're not taking something away from somebody; you're giving them something and not giving them quite as much as they would get if you didn't have this policy. She said the landowner or the developer always has the choice to build what was allowed by zoning. Linda Daniels, RDA Director, stated that there has been a very high housing growth in the last four years; so the multiplication of cities that have had ordinances in place in the last four years has grown significantly, almost 60 percent. She said because of the limited application of the inclusionary ordinance, we do not expect our RHNA numbers to be satisfied by the inclusionary alone; we need to continue to use our tools, the RDA, our non-proft partners who have access to other funding, home grants, tax credits. She said every unit counts. Commissioner Fletcher stated that one of the reasons that we asked for a joint meeting was because Frank Williams, BIA, came to a Planning Commission meeting with surveys that had a lot of negative comments on inclusionary housing and the fact that it doesn't satisfy the real problem, which is supply and demand. He asked why it is the government's prerogative to say we are going to tax you to solve this need when there could be other solutions available. Councilmember Gutierrez stated that for those of us who have the philosophy anti high-density, until the Council changes or becomes more pro higher density, then we probably are not going to have any opportunities to use this ordinance. Linda Daniels said looking at the market rate for residentially zoned properties applying the inclusionary ordinance would be a significant impact, which is the basis of the reason why the subcommittee identified applying it only to when zone changes are requested so that the developer can take into account the affect of property values. Linda Daniels said there are incentives involved, and density bonus is one of them, to help offset the requirements for workforce housing; there are tools that the developer has to use, as well as the City, in providing workforce housing within a project. Councilmember Michael stated that he and Councilmember Gutierrez have been working with staff to get this ordinance to its present state. He said the one thing that has been absent from all of this is hearing from friends of the Building Industry about their sense of what this will mean to them as home builders. Frank Williams, CEO, Building Industry Association, said he is delighted to hear this discussion about affordable housing. He said in their research that was provided to staff, the study done by San Jose State University shows that inclusionary zoning is indeed a failed public policy. He said there is a philosophical issue and a policy issue that needs to be addressed when we are looking at programs like inclusionary zoning; he said the affordable housing problem is not a development community problem--it's a societal problem. He said if we are serious as a community about providing affordable housing, we should get community support for affordable housing programs. He said some cities in this County have made attempts to address it through inclusionary zoning, but with what the City is trying to do here, it will take a hundred years. He said a joint authority or task force should be put together with every city to consider an affordable housing bond issue so the cost of the programs would be borne by all the residents of the County. He read an excerpt (page 9) and provided a handout, which is part of the record, entitled "IF' (on file in the City Clerk's Office), which addresses the housing policy issues of the Building Industry Association. The article states that "inclusionary zoning is an income-transfer program, but the income that it transfers, from the market-rate home to the subsidized home, comes from a hike in the price of the market-rate home; which means only rich and poor people benefit from inclusionary zoning and middle-class buyers remain locked out of housing markets." Mr. Williams stated that to better address the affordable housing issue, he would recommend doing what the City of Chino Hills did; he said the HUD website recommends that cities go through the same process. He said the Building Industry is committed tc work with the City to come up with a reasonable solution to correct the inadequacies of the affordable housing problem that exists throughout the County. He recommended Special City Council/Planning Commission Meeting May 7, 2008 Page 5 that the City bring in the authors from San Jose State to give them a presentation, as they are experts in this area. He said the industry wants to work with the City to solve this affordable housing problem and come up with a real solution. He said the industry sees this as a new house tax and that it is a failed public policy. Mayor Pro Tem Michaels asked Mr. Williams what he means be a "failed public policy." Mr. Williams said it is because it doesn't produce the number of units that you want and it increases the cost of other housing. He said in his opinion, that's a failure. He said it costs too much money; it didn't do what it was supposed to do; it increased houses and fewer homes were built. Commissioner Munoz stated that what seems to be getting lost is the purpose of the inclusionary housing. He said he doesn't think it is totally unreasonable to ask the building industry to help in mitigating the problem that we have; we are not asking them to bear the full brunt. He said he is open to .other tools, but that doesn't mean that the tool we are considering tonight is a totally useless piece of paper. (Note: Due to the inaudible tape, the above paragraph reflects /ragmented comments,) Commissioner Howdyshell stated in looking at housing from the standpoint of where it is today and what she sees, we have to look at affordability. She said she sees value in this document. She said Commissioner Munoz stated it very well in terms of the partnership of the building industry along with the community and redevelopment in terms of what we can put in place is a viable tool for the community so that future residents who want to reside here have the opportunity in the future. She thinks we do need to have a strong partnership. She said this is a very sensitive topic but, at the same time, very vital. She is looking for more data to really see the big picture--what do we have left to develop; how it is currently zoned; where are the possibilities that exist and what can we put in place or look for in terms of our vision for the future. Chairperson Stewart stated this is a very complex issue; she said she looked over the Internet at affordable housing, inclusionary housing, LA County and San Diego, and she came across extremely comprehensive ordinances. She said in looking at ours, we are at the complete opposite end of that spectrum. She said it is a very lenient ordinance compared with other cities. She said the reason the Commission wanted it returned to a meeting such as this is because they didn't feel they had enough information about it at the Commission Meeting and didn't feel that the BIA had a chance to weigh in on this, along with other concerned parties. She said after hearing all of this, she thinks this is a minor enough tool that can be implemented. She does not think that it is going to be that harmful. She said maybe this is going to do a good job in helping us to integrate affordable housing throughout this community. She said after ell this discussion, doing the research that she has done, and listening to a great staff presentation, listening to the councilmembers who have been a part of this subcommittee, she thinks this is a very lenient tool; it's probably something that is one piece of a toolbox. She said we could get with the BIA and put all the tools together to come up with one great component. Commissioner Fletcher said he agrees with Chairperson Stewart in that it's one tool, and probably a minor tool, in meeting the goals for affordable housing. He doesn't think the fact that it has a minor effect, or a larger effect, is a reason to approve it. He said he has to feel comfortable with the fact that it is effective to begin with. He doesn't know if taxing the developer is the appropriate response to a social problem. He feels more comfortable, as staff refutes the concerns and the additional studies that were attached to the agenda, because all of them state that it is a failed policy and it provides other problems as far as prices of the houses. He said he has a problem with a land use change, if it triggers inclusionary housing, from non-residential and to residential and mixed use land, because he likes to restrict the General Plan amendments. He doesn't want to see our commercial and industrial be converted to residential. He said if the location was right and the whole thing satisfied affordable housing, then he could go for that. He said there are all sorts of adjacent problems that the ordinance may have, even if it's only going to be used in certain situations. Councilmember Spagnolo said he thinks he would prefer to have another workshop on this. He said some of the reports that Frank Williams left were five years old, and he would like to look at more current data. He has a problem with the density issues--where is that going to apply and are we going to have a say if a developer wants to increase density in a residential area. He said it is another tool in the tool box, and that's not a bad thing to have if it's nothing that we would be locked into using. He said he would like a little more information. Special City Council/Planning Commission Meeting May 7, 2008 Page 6 Councilmember Williams said she agrees that that is a far more complex issue than a simple statement is going to make. She, too, would encourage another workshop and she would like to see the BIA get more involved. She said we all want more affordable housing and we want, especially the moderate income families, to be able to afford housing, but we don't want to do it at the cost that we don't get anything built. What would happen if we become so onerous on this that builders walk away from us. She is no way near ready to put a final stamp on this. Councilmember Michael stated that he believes inclusionary zoning is to builders and to a lot of cities what affordable housing is to neighborhoods that exist where a neighborhood is being impacted by affordable housing. He said what they tried to do here was to present to everybody an ordinance that isn't the typical inclusionary zoning. He said for him this was strictly another tool that we could partner with the builders. He said no builder is going to come in and ask for a change in zoning or an increase in density without frst penciling out what makes that project financially viable for them. He said he is still interested in looking at all the avenues that we have available as a legislative body that has goals and state mandates that we need to meet, and if this doesn't meet the muster of the test of information, maybe there is a different approach. He agrees that it needs more review and more work. He said staff has done an incredible job with respect to the time and effort put into this to bring back what is far diluted from where we started several months ago. He said in the end, we need to make this a win for our community, a win for the people who provide the housing for our community and the win for our city and the public that we want to live here. Mayor Kurth thanked the subcommittee, staff, the consultant, the Planning Commission and the building community. He said more discussion is needed. He is a little concerned about increasing density and he's a 100 percent in favor of affordable housing, as he thinks we have a moral commitment to it. He said we need to find a way to do it without increasing the density, as we also have a commitment to the quality of life of our citizens. He said we need to find a way to accomplish our affordable housing goals without eroding our standard of living too. ACTION: Item referred back to Subcommittee D. ADJOURNMENT The meeting adjourned 6:52 p.m. Re pecttully submi ted a pu/tC/~//~'_~C- ~~~~o~ K thry~ n'L. Scott, CMC Assistant City Clerk Approved by Planning Commission: September 10, 2008 Approved by City Council: September 7, 2008