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HomeMy WebLinkAbout2008/03/26 - Agenda Packet - Planning Commission ,t • r 1 LJ THE CITY OF RANCHO CUCAMONGA _ PLANNING COMMISSION AGENDA RANCHO MARCH 26 2 cUCAMONGA ~ 00$ 7:00 PM Rancho Cucamonga Civic Center Council Chambers 10500 Civic Center Drive Rancho Cucamonga, California Ic - CALLTO ORDER Roll Call Chairman Stewart Vice Chairman Fletcher Munoz_ Howdyshell _ Wimberly - II:., .ANNOUNCEMENTS ~ ,;;_ ~:.~ _ . TH'.. ~A~EPROVA~LOFMIN'UTES ~~', ~~~~'~ ~-' March 12, 2008 Regular Meeting Minutes March 12, 2008 Workshop Meeting Minutes IV.. `PUBL'IC HEARINGS ~ `" - The following items are public hearings in which concerned individuals may voice their opinion of the related project. Please wait to be recognized by the Chairman and address the Commission by stating your name and address. All such opinions shall be limited to 5 minutes per individual for each project. Please sign in after speaking. A. ENVIRONMENTAL ASSESSMENT AND CONSIDERATION OF INCLUSIONARY HOUSING ORDINANCE DRC2008-00074 -A request To add Chapter 17.42 to the Rancho Cucamonga Development Code pertaining to Inclusionary Housing requirements for certain residential projects. Staff has prepared a Negative Declaration of environmental impacts for consideration. This item will be forwarded to the City Council for final action. 1 of 4 _ PLANNING COMMISSION AGENDA MARCH 26, 2008 RANCHO cUCAMONGA 'V' . DIRECTOR'$REPORTS' B. RESOLUTION OF DENIAL FOR USE DETERMINATION DRC2008-00179 _ - LEGG MASON REAL ESTATE INVESTORS, INC. -Per the direction of the Planning Commission (March 12, 2008 meeting), the adoption of a resolution of denial for a Use Determination fora "Fresh 8~ Easy' market to be categorized under the "Specialty Food Store" land use category within the Specialty Commercial District of the Foothill Boulevard Specific Plan (Subarea 2). VI. ` PUBLIC COMMENTS This is the time and place for the general public to address the commission. Items to be discussed here are those that do not already appear on this agenda. VIL COMMISSION-BUSINESS/COMMENTS ~~ ~~~`~'~ ~:~. -VIII. A~DJOURNIVTENT The Planning Commission has adopted Administrative Regulations thatset an 11:00 p.m. adjournment time. If items go beyond that time, they shall be heard only with the consent of the Commission. 1, Lois J. Schrader, Planning Commission Secretary of the City of Rancho Cucamonga, or my designee, hereby certify that a true, accurate copy of the foregoing agenda was posted on March 20, 2008, at least 72 hours prior to the meeting per Government Code Section 54964.2 at 10500 Civic Center Drive, Rancho Cucamonga. 3-'~r O • 2 of 4 • • _ PLANNING COMMISSION AGENDA MARCH 26, 2008 jjANCeo CUCAMONGA If you need special assistance or accommodations to participate in this meeting, please contact the Planning Department at (909) 477-2750. Notifcation of 48 hours priorto the meeting will enable the City to make reasonable arrangements to ensure accessibility. Listening devices are available for the hearing impaired. INFORMATION FOR THE PUBLIC TO ADDRESS THE PLANNING COMMISSION The Planning Commission encourages free expression of all points of view. To allow all persons to speak, given the length of the agenda, please keep your remarks brief. If others have already expressed your position, you may simply indicate that you agree with a previous speaker. If appropriate, a spokesperson may present the views of your entire group. To encourage all views and promote courtesy to others, the audience should refrain from clapping, booing or shouts of approval or disagreement from the audience. The public may address the Planning Commission on any agenda item. To address the Planning Commission, please come forward to the podium located at the center of the staff table. State your name for the record and speak into the microphone. After speaking, please sign in on the clipboard located next to the speaker's podium. It is important to list your name, address and the agenda item letter your comments refer to. Comments are generally limited to 5 minutes per individual. If you wish to speak concerning an item not on the agenda, you may do sounder "Public Comments." There is opportunity to speak under this section prior to the end of the agenda. Any handouts for the Planning Commission should be given to the Planning Commission Secretary for distribution to the Commissioners. All requests for items to be placed on a Planning Commission agenda must be in writing. The deadline for submitting these items is 6:00 p.m. Tuesday, one week prior to the meeting. The Planning Commission Secretary receives all such items. AVAILABILITY OF STAFF REPORTS Copies of the staff reports or other documentation to each agenda item are on file in the offices of the Planning Department, City Hall, located at 10500 Civic Center Drive, Rancho Cucamonga, California 91730. These documents are available for public inspections during regular business hours, Monday through Thursday, 7:00 a.m. to 6:00 p.m., except for legal City holidays. APPEALS Any interested party who disagrees with the City Planning Commission decision may appeal the Commission's decision to the City Council within 10 calendar days. Any 3of4 _ PLANNING COMMISSION AGENDA MARCH 26, 2008 RANCeo CUCAMONGA appeal filed must be directed to the City Clerk's Office and must be accompanied by a fee of $2,039 for maps and $2,141 for all other decisions of the Commission. (Fees are established and governed by the City Council). Please turn off all cellular phones and pagers while the meeting is in session. Copies of the Planning Commission agendas and minutes can be found at http:/Iwww.ci.rancho-cucamonga.ca.us • • 4of4 Vicinity Map • B ~A - City W ide Q City of Rancho Cucamonga N • Planning Commission Agenda March 26, 2008 y J~ ~~ ~yi ~ ~;~ ~~. rJ~ J~ T H E C I T Y O F R A N C 11 O C U C A M O N G A Staff Report DATE: March 26, 2008 TO: Chairman and Members of the Planning Commission FROM: James R. Troyer, AICP, Planning Director BY: Rina Leung, Senior Planner SUBJECT: ENVIRONMENTAL ASSESSMENT AND CONSIDERATION OF INCLUSIONARY HOUSING ORDINANCE DRC2008-00074 - A REQUEST TO ADD CHAPTER 17.42 TO THE RANCHO CUCAMONGA DEVELOPMENT CODE PERTAINING TO INCLUSIONARY HOUSING REQUIREMENTS FOR CERTAIN RESIDENTIAL PROJECTS. STAFF HAS PREPARED A NEGATIVE DECLARATION OF ENVIRONMENTAL IMPACTS FOR CONSIDERATION. IF APPROVED, THIS ITEM WILL BE FORWARDED TO THE CITY COUNCIL FOR FINAL ACTION. • BACKGROUND: Over the last 25 years the City has grown in population, jobs, and housing units. In the early years of the City's growth, Rancho Cucamonga was viewed as a haven for affordable land and housing compared to Orange and Los Angeles County areas. While prices for land and housing in the City remain lower than neighboring counties, the ability for median income families to purchase and rent housing has changed dramatically in recent years. The growth in the City has also expanded the employment opportunities; thus, creating a need for workforce housing. The ability for people to live and work in the community has far reaching social and economic benefits to the City and the families/employees. In addition, in seeking a job/housing balance, the State has required Cities to produce and set aside a certain number of housing units for. affordable housing throughout California. This ordinance therefore facilitates the development of affordable workforce housing . Cities throughout California are struggling to meet the affordable housing requirements under State Law. While the City of Rancho Cucamonga has made great strides in addressing its affordable housing obligations a tremendous need still exists. The following summarizes the Agency's State Housing Production Requirements as well as the City's Regional Housing Needs Assessment (RHNA) Production Requirements. ITEM A PLANNING COMMISSION STAFF REPORT DRC2008-00074 -CITY OF RANCHO CUCANIONGA March 26, 2008 Page 2 Workforce Housing Requirements and Efforts: Redevelopment Agency State Housing Production Requirements Based on the State Housing Production Requirements, the Redevelopment Agency has a responsibility of providing approximately 2,755 units of affordable housing in the Project Area. The Agency is currently receiving credit for 1,596 units, or approximately 58% of the number of units that should be available in the Project Area. Recently, the Agency has entered into Agreements for 2 residential developments which will provide 303 additional workforce housing units in the near future. The Agency will not receive credit for these units until they are made available; however for purposes of identifying the units that will be available are included. r~t,io ~• i~ i~!i4fforda6'le Housing Units' ~'f ' ~ ~~ ;~, Re ui"red b 'State~Housm Pr'oiiuction',~iRe ui~ements s` ~~' Credit for existin units 1,293 Antici ated units in transition 303 Deficient 1,159 ' Total Required 2,755 City's Regional Housing Needs Assessment (RHNA) Production Requirements State law requires that jurisdictions provide their fair share of regional housing units that benefit the very low to moderate income individuals and families. According to the Southern California Association of Governments (SCAG), the City of Rancho Cucamonga will need to produce 1,282 new units by June 30, 2014. The 1,596 units already completed will not help the City meet its RHNA requirements. The following table outlines the SCAG Regional Housing Plan for the City. Table 2• Southern California Association of Governmental Regional°Housing Needs Allocation'for°" - , f. ~. 4 - .., ~'A i Sri s a -^~~r~. ~ -- ~ i 4i iq hN K ~\ Cucamonga from January;1;,2006~toJune 30, 2014x' ~~+~~,~z< ~~~` the City of Rancho . =~ ; ~i~ ; . i • h.~..... K .v'.151 ~'1~ .~ .{..~4°aa. "':a .~v.liY, !'.~.1Nf ..n S ~ l Number of very Number of low Number of Number of above Total low income income moderate income moderate income households households households households 317 216 245 504 1,282 In addition to the above data tables, it is important to note the following information. • CJ The Redevelopment Agency has expended approximately $158 million dollars and has pledged more than $425 million dollars from its housing set aside fund in order to provide the affordable credited units cited in Table 1. The Agency's resources are nearing capacity as the Project Area and tax increment reach the limits of the Redevelopment Plan. • A-2 PLANNING COMMISSION STAFF REPORT DRC2008-00074 -CITY OF RANCHO CUCAMONGA March 26, 2008 • Page 3 • Unlike the early 1980's when the City was seeing tremendous moderately priced housing growth, the majority of the units that are beirig constructed today are not considered to be affordable to low or moderate income families. The Agency can provide affordable housing by either obtaining covenants on existing. units or through the new construction of units. At the minimum, 50% of the units provided must be through new construction methods, and no more than 50% of the units can be acquired through covenants on existing projects. ANALYSIS: Given the need to provide a balanced community and recognizing there are limited resources remaining to provide workforce housing (available land and funding), the adoption of an Inclusionary Housing Ordinance would facilitate additional housing opportunities. The City Council has acknowledged that the adoption of an Inclusionary Housing Ordinance will not, by itself, solve the City's workforce housing needs. However, an Inclusionary Housing 'Ordinance will contribute towards providing workforce .housing. According to the research conducted by the Redevelopment Agency, over 130 jurisdictions in California currently have Inclusionary housing programs as a component of their overall affordable housing strategies. Thus, many Cities are utilizing an Inclusionary housing program;to contribute to their affordability requirements. • After several meetings with the Housing Subcommittee (Council members Gutierrez and Michael), and after consideration by the City Council at a workshop held on October 17, 2007, it was directed that staff facilitate the development of an Inclusionary Workforce Housing Ordinance that applies to projects that request the following types of discretionary approvals: • Aland use change from anon-residential land use to a residential or mixed use land use; • An increased density on residentially designated land; and • A map revision to allow a conversion from apartments to condominiums. It is important to emphasize that the Ordinance will apply only to projects that propose residential uses which are not permitted based on the property's zoning designation. The Subcommittee and City Council have previously discussed at meetings and workshops whether an Inclusionary Housing Ordinance should apply to all residential developments. iri the community. The conclusion of those discussions was that it would be an economic impact if the Ordinance applied to land that was currently zoned for residential uses. This conclusion was further supported by staff and consultant analysis. Another point that staff wants to address is that if a project must comply with the Inclusionary Housing Ordinance, the Development Code provisions of the Affordable Housing Incentives Ordinance could be available to a developer. This includes the opportunity to request density bonus and other "incentives to offset the provision of the workforce housing. u A-3 PLANNING COMMISSION STAFF REPORT DRC2008-00074 -CITY OF RANCHO CUCAMONGA March 26, 2008 Page 4 • The proposed Ordinance would not apply if any of the following conditions are met: • Applications deemed complete prior to the effective date of the Ordinance; • Residential projects that have a Development Agreement which excludes the Inclusionary requirements; • Projects that have an approved Regulatory Agreement with the Redevelopment Agency; and • Projects which contain 5 residential units or less. During discussions and strategy development with the Housing Subcommittee, staff retained the services of Keyser Marston Associates to assist staff in analyzing the economic impact of the proposed Inclusionary Workforce Housing Ordinance. As part of that review, the analysis considered the economic impact of the workforce housing requirement, the median income, and the value of land to determine if a significant economic impact was created. Because the Ordinance only applies to land that is zoned non- residential, or land that is requested for residential intensification, it was determined that a 15% workforce housing requirement could be required without a significant economic impact. As a result of the analysis, the following table summarizes the Inclusionary housing unit percentages that would be required for a development that is built under the Inclusionary Housing Ordinance. Income and Affordability Restrictions would be applied as follows: • Income level Ownershi Projects Rental Projects A artments Ver Low 50% Medium Income 7.5% Moderate 110% Medium Income) 15% 7.5% In addition, the proposed Ordinance also considers alternatives to providing the workforce housing units within the project. The alternatives include: • Constructing or substantially rehabilitating units on another site. • Purchasing equivalent affordable housing covenants for units in existing multi-family projects. Payment of an in-lieu fee for projects with 20 or fewer units, and projects of more than 20 units upon approval of the City Council based on findings that the cost of providing the units on-site would substantially exceed the amount of the applicable in-lieu fee. In December 2007 a workshop was held to discuss the proposed Ordinance. A flyer advertising the workshop was posted at several public places, including the Planning, Engineering, and Building and Safety counters, as well as being mailed to several local developers, the Building Industry Association, Chamber of Commerce, and realtors. Staff presented information at the meeting to the attendees, which included several realtors and a representative of the Chamber of Commerce. Following the workshop, staff met with Lewis Operating Corp. to review the proposed Ordinance. Since the workshop, the • Building Industry Association has submitted a letter regarding the City's consideration of an Inclusionary A-4 PLANNING COMMISSION STAFF REPORT DRC2008-00074 -CITY OF RANCHO CUCAMONGA March 26, 2008 • Page 5 Housing Ordinance. The letter, dated March 14, 2008, is attached. The attachments to the letter are available in the Planning Department office. FACTS FOR FINDING: The purpose of the proposed Inclusionary Housing Ordinance would provide additional affordable housing opportunities and assist the City in meeting its affordable housing requirement. The proposal will further Programs 9 and 10 of the Redevelopment Agency's Housing Plan of the Housing Element in the General Plan, which includes goals for investigating the feasibility of an affordable housing overlay zone and a mixed use overlay zone in order to create new opportunities for affordable housing. Prior to the approval of any amendment to the Development Code, the Council, based upon the recommendation of the Planning Commission, must make a finding of the consistency with the General Plan. ENVIRONMENTAL DETERMINATION: The Planning Department has prepared an Initial Study pursuant to the California Environmental Quality Act (CEQA). As indicated on the attached Initial Study, there is no substantial evidence that the project would have a significant affect on the environment; thus, a Negative Declaration has been prepared and circulated along with a public hearing notice. CORRESPONDENCE: This item was advertised as a public hearing in the Inland Valley Daily Bulletin newspaper with aone-eighth page ad because more .than 1,000 properties would be affected by the citywide scope of the amendment (all residential districts). In addition, the Chamber of Commerce, Building Industry Association (BIA), non-profit housing organizations, and local developers were notified. .RECOMMENDATION: Staff recommends that the Planning Commission adopt the attached Resolution recommending approval of Development Code Amendment DRC2008-00074 to the City Council for final action. Respectfully submitted, Jams R. Tro er, AICP V Y Planning Director JRT: RL/Is Attachments: Exhibit A -October 17, 2007 City Council Staff Report with attachments Exhibit B -Keyser Marston Report August 13, 2007 Exhibit C -Keyser Marston Report June 18, 2007 Exhibit D - Building Industry Association Letter March 14, 2008 (attachments available for review in the Planning Department offices) Draft Planning Commission Resolution for Development Code Amendment DR2008-00074 Recommending Approval to City Council Draft Ordinance for Development Code Amendment DR2008-00074 A-5 1V~EMORANDUM Rrvr--~ r_LOn~~ENT Acr_tic~~ Date: October 17, 2007 To: Mayor and City Council Members Jack Lam, AICP, City Manager From: Housing Subcommittee: Agency Members Gutierrez and.Michael Subject: Draft Inclusionary Workforce Housing Ordinance 1` .~~ ~r ~ j ~,_~h ~~ RnNCHo C,UCAIVIONGA BACKGROUND: Over the past several months, the Housing Subcommittee has been meeting with staff and counsel to discuss the feasibility of implementing an Inclusionary Workforce Housing Ordinance based on the City Council's direction during their July 2006 workshop. As we all know, the production and preservation of affordable housing is a State requirement imposed on California cities, but it is unrealistic to think that cities can meet affordable housing requirements solely using local funding sources. Our research has shown that over 130 jurisdictions in California currently include inclusionary housing programs as a component of their overall affordable housing development. Rancho Cucamonga has made great strides in addressing its affordable housing obligations • primarily through the use of Redevelopment Agency Housing Setaside funds. Despite these efforts which have produced over 1700 units of affordable housing, a tremendous need still exists. Given the need to provide a balanced community and recognizing there are limited resources (both in terms of available land and finances) it is apparent that private developers should be encouraged to share some responsibility in providing affordable housing. The Redevelopment Agency's Housing Production Plan, which is part of the Housing Element of the City's Gerieral Plan, recognized the need for a mechanism to engage the development community in the production of affordable housing. Many cities have addressed this issue by incorporating Inclusionary Zoning Ordinances that require developers to either provide affordable units or pay an in-lieu fee as part of the entitlement process. The Housing Subcommittee reviewed and discussed the various policies and programs, and concluded that a limited approach to inclusionary zoning could be considered in Rancho Cucamonga. During the July 2006 workshop, the City Council discussed with the Housing Subcommittee and staff the concept of an Inclusionary Workforce Housing Ordinance and concurred with the Subcommittee that an inclusionary requirement could be used on a limited basis as a tool to assist the City and Agency in meeting affordable housing production requirements. At the conclusion of the workshop, the City Council requested further research on the financial impacts of applying the inclusion requirement to future projects based on the following goals: • Achieve an inclusionary workforce housing requirement within all land use categories in the City; • Based on the Redevelopment Agency State requirement for housing production within the Redevelopment Agency project area, consider a.minimum 15% of total number of units . within a project to be restricted to affordable incomes; EXHIBIT A A-6 INr,i,USU>t~'':~ity \C%OIt1U~Okr;if I-IUUSIi~'O \\2>ItI:C~ SOP Oc'rt n+i at 17, 3007 h:,cr: 3 u • Achieve an inclusionary workforce housing requirement within all land use categories in the City; • Based on the Redevelopment Agency State requirement for housing production within the Redevelopment Agency project area, consider a minimum 15% of total number of units within a project to be restricted to affordable incomes; • Provide a balance of units affordable to income levels hasad nn tha Redavalnnmant Agency's income restrictions of 35%, 45%, 60% and 90% of the median incomes. In order to evaluate this approach, staff was directed to obtain the consulting services of Keyser Marston Associates to assist the Housing Subcommittee and staff in determining the feasibility of a proposed Inclusionary Workforce Housing Ordinance. The Housing Subcommittee has met on several occasions with Agency staff, the economic and financial consultant, and City Attorney to discuss the inclusionary concept and has reviewed and accepted the attached draft Inclusionary Housing Ordinance. The Housing Subcommittee recommends that the Ordinance be forwarded to the City Council for review and further direction. ANALYSIS: Ms. Kathleen Head of Keyser Marston Associates was retained to conduct a Feasibility Analysis of a potential inclusionary requirement based on the Council's previously identified goals. The Feasibility Analysis is provided as an attachment to this Memorandum. Ms. Kathleen Head concluded that because of the significant gap between the County's median income, which the • Agency and City are required to use for housing purposes, and the sales and rental prices in the City, the impact of imposing an affordable inclusionary requirement on residentially zoned land developed at its approved density significantly impacts a land owner of the economic value of their property. Ms. Head advised that in order to reduce the economic impact on residentially zoned land to an acceptable level, the analysis indicates that the percentage of required affordable units would need to be reduced from the proposed 15% to 5% of the total development and restricted to only moderate incomes. The financial modeling also indicated that to achieve an acceptable economic value that would not constitute a taking of property without just compensation under State and Federal Constitutions, the ownership projects could provide units affordable only at the moderate income level of 110% of the area median income, which is the State definition of moderate income afforded to the City. Rental units could provide 7.5% of the units at moderate income (110% of the median income) and 7.5% of the units at very low income levels (50% of median income). Ms. Head explained that a project could apply for financial assistance from the Redevelopment Agency in order to further reduce the income levels to meet the Agency's requirements. It is important to note that affordable units constructed at these income levels within the Redevelopment Project Area and without Agency assistance will qualify towards the State 15% affordable housing production requirement in Redevelopment Project Area that must be met prior to the expiration of the Redevelopment Plan. Ms. Head analyzed and explained that applying a 15% Inclusionary Workforce Housing requirement on land which was not residentially zoned, but would require a zone or General Plan change to allow residential, was economically reasonable. Ms. Head explained that the same analysis held true for a project that requested a greater level of density than what it would be entitled to under the current zoning. Ms. Head further explained that the analysis indicates that an imposition of the • inclusionary requirement on a proposal involving a change in land use or density on any project of 20 units or less, regardless of density, creates a significant economic impact to the value of the A-7 INCLU$It)N;\Itl' \VQItRI'UHCI(HOUti7NG \UC RKSI KJP QC "rUI I~:R 17, 3007 I 1?.\crs 3 property and advised the City to allow those projects to pay an in-lieu fee by right. Additionally, the consultant recommended that projects proposing five (5) or fewer residential units should be excluded from the inclusionary requirement. SUGGESTED PROVISIONS: Based do the analysis and presentation of the consultant, as well as input from staff and the City Attorney, the Housing Subcommittee supported the consultant's conclusions and refined the direction to staff to pursue the development of an Inclusionary Workforce Housing.Ordinance that incorporated the following key points: • Requires 15% of any proposed residential development to include affordable housing units at various income ranges if a discretionary approval is required to allow: o an increase in density; o a change in zoning regulation that does not permit residential use to one that does permit residential use; o conversion of rental units to condominium ownership. • Income and Affordability Restrictions would be applietl as follows: Income Level Ownershi Pro'ects Rental Pro ects Single- Townhomes Family Apartments Very Low (50% Median, Income) 7.5% Moderate (110% Median Income 15% 15% 7.5% • Provides exemptions for: o applications deemed complete prior to the effective date of the ordinance; o residential projects that have a Development Agreement which excludes the inclusionary requirements; o projects that have an approved Regulatory Agreement with the Redevelopment Agency; o projects which contain 5 residential units or less. • Provides the following alternatives to producing units within the project: o Constructing or substantially rehabilitating units on another site; o Purchasing equivalent affordable housing covenants for units in existing multi-family projects. o Payment of an in-lieu fee for projects with 20 or fewer units, and projects of more than.20 units upon approval of the City Council based on findings that the cost of A-8 1 NC:LUS~r)\':\121' IC~QRI:PURCIL HOUSI,\'G \\%ORla IiOP Or,'rc)Hr:a 17, 2U07 P;1G1 d • providing the units on-site would substantially exceed the amount of the applicable in-lieu fee. Under advisement of the City Attorney's office, the Housing Subcommittee supported the inclusior of an in-lieu fee calculation for small projects, or on a limited basis those projects which receive a hardship determination from the City Council. The primary intent of the Ordinance is to require that the development provide the units on-site, build units at another approved location in the City, o) p'_. _...~,._ ........ ........ .f ., ..... .... ..., .~.....~:,.~ .y ~~..~.~-~..~~ ..'y' r.r.~)c w. ~ nc vny ~uvu,cy'o vn wc.cw,acu that the inclusion of a methodology to calculate the fee would ensure fairness and consistency from project to project. Ms. Head subsequently provided a proposed methodology to calculate an in-lieu fee for projects proposed with 6 to 20 units, and for projects meeting certain hardship requirements. The in-lieu fee methodology is also attached for your reference. During the October 17, 2007 workshop the Housing Subcommittee also requested a discussion with the City Council regarding: • Adoption of Resolution of Intention to impose the inclusionary requirement on projects submitted in the interim time period of the Ordinance becoming effective; • Notification process to development organizations and companies of the City's interest in adopting an Inclusionary Workforce Housing Ordinance; and How to address the requirement for Inclusionary Workforce Housing as part of the General Plan process where land that is not currently zoned residential, but which may be changed • as part of the General Plan process to permit residential (including mixed use), is proposed. If you have any questions about the attached information, please feel free to contact the Housing Subcommittee or staff prior to the City Council workshop, on October 17, 2007. Attachments: Draft Ordinance Keyser Marston Feasibility Analysis July 6, 2006 Housing Subcommittee Memo with attachments 1 to 7 A-9 1VIEMORANDUM }-- ; REDEVELOPMEN'1':1GP_NC1' RArrceo Date: July 6, 2006 C,UCAMONGA To: Mayor and City Council Members p Jack Lam, AICP, Executive Directo~o~`~( ~~' 1~ Subject: INCLUSIONARY ZONING WORKSHOP -4:00 P.M,(JULY 19, 2006 Over the past several months, the Housing Subcommittee-has been meeting with staff and counsel to diswss the City and Agency's obligations and opportunities in providing affordable housing. As we all know, the production and preservafion of affordable housing is a State requirement imposed on redevelopment agencies and cities, but it is unrealistic to think that local communities can meet affordable housing requirements solely using local funding sources. Rancho Cucamonga has made great strides in addressing its affordable housing obligations primarily through the use of Redevelopment Agency Housing Set-aside funds. Despite these • efforts, which have produced approximately 1700 units of affordable housing (1,320 through Redevelopment and fhe balance through City/County Agreements), a tremendous need still exists. During the approval of the Redevelopment Agency's Housing Production Plan {Attachment 1), which is part of the Housing Element of the City's General Plan, 12 potential programs to assist in providing affordable housing were identified. Programs 9 and 10 present goals For investigating the feasibility of an affordable housing overlay zone and a mixed use oveday zone in order to create new opportunities for providing affordable housing. Given the need to provide a balanced community and recognizing there are limited resources remaining to provide affordable housing {both in terms of available land and finances) the Subcommittee is proposing the. City Council discuss creating a limited Inclusionary Zoning Ordinance. The policies which the Subcommittee is proposing for discussion will also help accomplish the program goals of fhe Housing Production Plan and the Housing Element. Many cities have adopted an Inclusionary Zoning Ordinance that requires developers to either provide affordable units (on or off-site) or pay an in-lieu fee as part of the entitlement process. The Housing Subcommittee has reviewed and discussed several Inclusionary Zoning options and concluded that a limited approach to Inclusionary Zoning could be considered in Rancho Cucamonga. The Subcommittee has requested a workshop on Wednesday, July 19'" at 4:00 p.m. to discuss with the full City Council the status of our affordable housing efforts and potential policies for a limited Inclusionary Zoning application. To facilitate the discussion, the following background material and information has been provided in advance of the workshop. CJ A-10 IiJCLUSIONARI' 70NING WO]ti4SFiOP - 4:00 P.Ivf.,]ULY 19, 2006 P.AGr: 2 JULY a, 2(706 WHAT IS AFFORDABLE HOUSING AND WHY IS IT IMPORTANT TO A COMMUNITY As the City Council is aware, aver the past 25 years the City has grown in population, jobs and housing units. In the eady years of the City's growth, Rancho Cucamonga was viewed as a haven for affordable land and housing for young families as compared to the Orange and Los Angeles tilnJl itY a1CtlJ. vVl~ulc iii ~i:co Ni iaiw ai,i, ~wumi~y 6; ,~.,a~,..,w vuw-v~~ya ;.a uuu ,_ ,....... .`u.i b~ring~fOnttes-the`abtttty'fo-purctrase-an>trenrtrousirrg-= the-martcet-rate-affordabiiit)* =has------ changed dramatically. in recent years. How many times have you heard your friends and neighbors say they wouldn't be able to afford the home they are in today? The Housing Subcommittee is also aware that the growth in the City has begun to expand the employment opportunities and thus the wage eaming opportunities in the City. In the past 10 years the City has seen significant growth in office and higher end jobs that are generally assodated with higher wage eaming capabilities. The City has also seen a significant increase in the number of retail, service/restaurant and hospitality (hotel) jobs. The Subcommittee has frequently discussed the value to the community in providing affordable workforce housing for the residents, and employees of companies in Rancho Cucamonga. The ability for people to live and work in the community has far reaching social and economic benefits to the city and the families employees needing affordable housing. For 2006, the median income for the County of San Bernardino for a family of 4 is $57,500. While • the median income for Rancho Cucamonga is much higher, approximately $72,525, it is the County median income figure that is used to calculate eligible incomes and affordable housing rates. During the Subcommittee meetings information was discussed regarding wages and job types that would be considered affordable wages. Attached #2 to Phis memo is a small sampling of the types of jobs which at entry level would typically qualify as being an affordable income assuming a family size of 4. The Subcommittee also noted that using the lowest income possible, minimum wage at $6.75 an hour, a single person household would have to work 115 hours per week in order to achieve the median income. While this is an extreme example of wage eaming, it is important to note That even at an hourly rate of $15, a single person would have to work 52 hours a week in order to achieve the median income. The following table illustrates the various eligible income limits, based oh family size. Famil Size County of S. B. MedianlnCOme 35°k income 45%income 60%income 90%iricome 1 540,300 $14,105 $18,135 $24,180 $36,270 2 546,000 $16,100 $20,700 - $27,600 $41,400 3 $51,800 $.18,130 $23,310 $31,080 $46,620 4 $57,500 $20,125 $25,875 534,500 551,760 5 $62,100 $21,735 $27,945 $37,260 $55,890 6 $66,700 $23,345 $30,015 $40,020 $60,030 7 $71,300 $24,955 $32,085 $42,780 $64,170 8 $75.900 $26,565 $34,155 .545,540 $68,310 • A11 INCLUStONARY %ONING WOW<SHOP-4:00 P.M., JULY 19, 2006 juLY 6, 2006 - PAGE 3 These family incomes Translate into the following affordable monthly rental rases, inGuding the amount allocated for utilities. FAMILY SIZE 36% income 45% income 60% income 90% income 1 $353 ~ $453 $605 I $907 L cuo ccnn f1 n'1r -..$953-._ $S$3_..~ ..__$7.77.------x_$1.166 4 $503 $647 $863 $1,294 5 $543 $699 $932 $1,397 6 $584 $750 $1,001 $1,501 7 $624 $802 $1,070 $1,604 8 $664 $854 $1,139 $1,708 As a comparison, the current average rental rate for an apartment in Rancho Cucamonga is $1,166 per month. Attachment #3 shows a listing of some of the rental complexes and rental rates in Rancho Cucamonga that are advertised on www:apartments.com. The average existing home price im the Ciry is $533,930. At an interest rate of 6%, a 30 year mortgage and a down payment ranging between 10% ($53,400) and 20% (106,800); a family of 4 would need an income between $102,450 and $115,245 in order to qualify for the mortgage . payment. These incomes are almost double the current County median income for 2006. Attachment #4 shows a comparison of incomes to existing and new home prices for the past 10 year period of time. The chart shows that housing costs have increased significantly more than increases in income, which impacts home ownership affordability. BACKGROUND DATA AMD INFORMATION Attachment #5 is a summary table which the Subcommittee has reviewed with staff regarding our achievements in the providing affordable housing. Attachment #6 is information summarizing the Regional Housing Needs Assessment and identifies the number and distribution by income category of affordable units that were expected to be provided in the City between 1999 and 2005. A review and explanation of this information will be part of the staff presentation at the workshop. The more critical data that is important for the City Council to be aware of are the following: Based on the Stale Housing Production Requirements, the Agency has a responsibility of providing approximately 2,755 units of affordable housing to meet the 15% minimum affordable housing requirement for the Project Area. • The Agency has directly provided 1,025 units, and another 295 units are proposed (1,320 total units). Through multi family bond financing, another 268 units have been provided which the Agency can receive credit for. The total number of units the Agency receives credit for is 1,588 units; approximately 6B% of the number of units that should be available. The Agency has an existing 1,167 unit shortfall In the number of affordable housing units. • Between 1999 and 2005 the Regional Housing Needs Assessment (RHNA} estimated the need for 7,700 units to serve families who were paying more than 30% of their income on A~12 I1vCLCJSIONARY ZONING WOKKSEfOP - 4:OCi P.Af., JULY 1 J, 2006 IULY G, 2006 PAGE 4 • housing. Of these units, approximately 79%, or 6,110, were for families earning 60% or less of median income. during this time period the CitylAgency was able to obtain covenants for i44 units for families eaming 60% or less of median income - or 2% of the need. • The RHNA numbers for the City for 2006-2011 time frames are currently being developed, but have not been distributed. Staff expects the Citv's "fair share" numbers for housing for families earning 90% or less of the metlian income to be aafustee to accoun[ ror me famines ---tFai had unmefneeds in i e -999=20D imeframe approximate y ami ies}; as well as -"-- the projected families that will need affordable housing in the upcoming 5 years based on the City's growth- • The Agency has expended or pledged more than 5232 million from its housing set aside fund in order to provide the 1,320 units. The Agency's resources are nearing capacity as the Project Area and tax increment reach the limits of the Redevelopment Plan. • Unlike the early 1980's when the City was seeing tremendous moderately priced housing growth, the majority of the units that are being constructed today are not considered to be affordable to low or moderate income families. • The Agency can provide affordable housing'by either obtaining covenants on either existing units or through new construction of units. At a minimum, 50% of the units provided must be through new construction methods, and no more than 50% of the units can be acquired through covenants on existing projects. • The Agency is required to spend housing set aside monies on family/senior projects in proportion to the City's population. Based on the 2000 census, the City's senior population (65 and older as defined by State law) is 5.5% and its family age population (64 and under) is 94.5%. At the workshop, staff will present maps that identify properties that could be affected by an lnclusionary requirement and a vacant land summary that clearly identifies the limited opportunities for construction of new housing units. Attachment #7 is a listing of cities in the State of California that have some form of lnclusionary Zoning Requirement; Attachment #8 is a sampling of artiGes that discuss the issue of affordable housing in the local communities. PURPOSE The purpose of an lnclusionary Zoning Ordinance is to require private development projects to provide a share of housing that is affordable to low and moderate income households. These housing units are fo be provided without financial assistance from local sources. Some cities require lnclusionary units as par! of any residential development, and other cities have required lnclusionary Zoning be accomplished on a more limited practice. After many meetings of discussion and review of affordable housing material, the Subcommittee is suggesting the City Council consider developing a limited lnclusionary Zoning requirement which would only apply to projects that request the following types of discretionary approvals: • Land Use change from aNon-Residential land use (Open Space, Flood Control, Industrial, or Commeraal) to a Residential or Mixed Use land use; • • A-13 INCLUSIONARY ZONING WORKSHOP -4:00 P.M., JULY t9, 20U6 Pncr_ 5 • JULY G, 2006 • Land Use change from Residential to Commercial; • An increased density on Residential land; • A Map revision to allow a conversion from apartments to condominiums. TIw 5~~6rnmrpittee'slEaspnjf~_Ixehind_tbis-ap~roach_is that a pro op sed re-zoning could add value __ to the property, and the community wuld also add value through the provision of affordableT housing. Additionally, property owners that convert apartments to for-sale condominiums are removing rental units from the market and potentially driving up the rents of the remaining rental housing in the City. The Inclusionary Zoning requirement could compensate the community for the loss of affordable housing rental stock when this occurs. Requiring affordable units as part of an increased residential density application ensures that the increase in housing units is in proportion with the overall affordable housing need. The requirement for providing affordable housing when a land use change is proposed to convert a residential site to commercial is also sound because you are removing potential housing opportunities for residents. When this type of zone change is requested, the opportunity to provide housing on-site would be limited to those instances where a mixed use designation is granted. Otherwise, the developer would have to provide the required affordable housing off-site, or pay in-lieu fees since a commercial zoning does not permit residential land uses. Through a limited Inclusionary Zoning practice, the city could gain workforce housirig for the empbyees of the proposed commercial development and the city as a whole. The Subcommittee felt it was important that any Inclusionary Zoning requirement nat be applied to property that is currently allowed to be developed for residential uses. If a developer must receive an approval to a proposed development that they would not otherwise be entitled to, then the City should be able to share in the benefits of that development through the provision of affordable housing. RECOMMENDED STANDARDS The Subcommittee and staff have compiled the following standards that could be considered as part of an inclusionary requirement. The Subcommittee is suggesting these standards as a starting point for discussion only, and could be modified or enhanced during the workshop, and any subsequent public workshops. 1. When a land use or density change application is made, as part of the entitlement process the developer would be allowed to meet the Inclusionary Zoning requirement in one of four ways, subject to City approval: • construct the affordable units as part of the proposed project • donate land and/or construct the required affordable units on another residentially zoned site • acquire units or covenants in another property • pay an in-lieu fee 2. The minimum percentage of inclusionary units should be 15% of the total residential units • proposed as part of the zone or density change. The Subcommittee has proposed that 50% A~14 I?vCLL'S10NARY ZONLNG WORKSHOP - 4:00 P.D4, JULY 19, 2006 PnG G • IDLY 6, 2006 of the Ind~Sionary units provided be affordable to families earning 50% or less of median income. 3. Through recorded covenants, incfusionary units produced could be legally restricted to occupancy by affordable income households for a minimum of 55-years For rental units and 45-vears for owner-occupied units. d~Ail'in~r. usionary units sfi"oul3-6e cons-Eructed afld occllptetl -conctmerttty-with-or'prtorto ttre----- construction and occupancy of proposed project. In phased developments,. inclusionary units could be constructed and occupied in proportion to the number of residential or commercial units in each phase of the development. 5. Developer would be required to enter into an Affordable Housing Agreement with City/Agency to ensure on-going maintenance and preservation of units. &. Within a proposed rental project, the number of bedrooms of the restricted units should be in the same proportion to the non-restricted units. 7. In the case of a for sale single family affordable unit, the resale requirements of the Agency's first time home buyer program will apply. When an affordable single family unit is sold at a proft and not to an income qualified family, the seller will be required to share a percentage of the equity for reinvestment back into the affordable housing program for future single family home purchases. 8. Rental and Home Ownership Inclusionary units should be indistinguishable from market-rate units; they should be of similar construction and contain similar amenities. The minimum bedroom unit size for any rental Inclusionary unit should be 1 bedroom and there will be a need for a percentage of the units to be 2 and 3 bedrooms as determined by RHNA goals at the time a project is proposed. The bedroom mix for an Inclusionary home ownership unit will be based on the ratio of bedrooms in the project that is being proposed. 9. A Development Agreement will be required as part of the land use or density change entitlement process which approves the location and method for meeting the Inclusionary Zoning requirement. POLICY QUESTIONS The Housing Subcommittee has identified the following as the 2 initial policy questions for discussion by the City Council: • Is there Council support for continued discussions on possible implementation of a limited Inclusionary Zoning Ordinance? • Should the Ordinance apply only to applications for zone or density changes? Following the discussion. by.the City Councl i would recommend that the Council discuss the the needed direction to work with legal coui Zoning Ordinance. f these two policy questions, the Subcommittee recommended standards in order to provide staff sel on the framework of a limited Inclusionary l J u A-15 • INCLUSIONAP.Y ZONU+G WORKSHOP -4:00 P.M, JULY 19, 2006 PAGE i Jtn r ~, wog CONCLUSION: At the conclusion of the workshop, should the Council recommend moving forward with the limited Inclusionary Zoning concept, the Housing Subcommittee would suggest that staff be directed to begin a series of meetings with the Building Industry Association (BIA), non-profit housing nmanizatinns. Chamher of Commerce. local developers, and brokers fo gather input on polices and recommendations for Council's consioeranon at a ruture meeting. • A~16 At+a,chment ~ I co X I W _.. ~ C7 G W R ~ N m LV. O N m C (6 J C t6 U f4 Qz ~ N r i a a ~ E_ _ ~ ~~ 0 0 ~u£= 3 iL~ - m c'° = .-_-.___-- . - - y_ ~ ~ ~ . i ~ .- ~ ~ ~ v~=ate cu~i ` '°' a J ~ m v ..A,r~~ m a w y p N s C ~~ m 1 F p a N ~ T.l9 .C 09 m .m ~ U ~ u g ¢> F~5 ~ O > [~ !\ ~ ~~® g 6Y ~ \ ~ Q c \ ~ easr ~ r i ~ C 3 o ,M ~ ~ ~ w ~ c T 0 - ~ C '.:.; 1 ' O . : %' ; :;;i r ~ m <l: ~ 1 X e 'i! il '~41'%~ w;y 4 ' ' l ;:. . ~; ro ) ~>, r ~_ ~ I s"{. `-' o .: ~ ' ~ w X ~ ~~ y T ~. M.~ . T' . T: r ' 7 1 :w ~.. 1 r" + 1 n ~ A-17 Redevelopment Agency's Housing Producflort Plan • C. HPP PROGRAMS AND IMPLEMENTATION MEASURES, JULY 1, 2000, THROUGH JUNE 30, 2005. Having examined the mandatory production requirement and the resources available to meet the requirement, programs and quantitative goals for the period July 1, 2000, through June 30, 2005, are set forth below. These programs shall be consistent with the General Plan, the cpttlomant with tha Wastam Center for faw and Poverty. and with Article 34 of the State As stated above, the projected production.requirementftom the formation of the RDA through June 30, 2005, is 1 ,024 units. As of January 1, 2000, a total of 675 units have been provided. In addition the RDA has a current unmet obligation of 911 new or substantially rehabilitated restricted, affordable units. The discussion of programs, including aerogram-by-program quantification and timetable for implementation Is included below. Tables X-9 and X-t0 illustrate the program quantification. Eleven programs are recommended. Program 1: Neighborhood Non-Profit HDC To meet the needs of specific neighborhoods, the RDA shall facilitate the development of Non- profit, 501(c)(3), Neighborhood Hous~g Development Corporations. Special neighborhood needs may include areas of long-term residential overcrowding, special infrastructure needs, or historic neighborhood identification. Implementation This program is underway. During the 1992-1993 fiscal year, the RDA facilitated incorporation of the NHDC to serve the Northtown ne(ghborhood. The RDA shall continue to work with the NHDC through the 2005 reporting period. Program 2: Land Bank The RDA continue to seek Non-Profit Housing Development Corporations to assist in the development of affordable housing on property that the agency has banked to date for affordable housing. No new land bank purchases are planned since the program has not meet planned expectations. implementation This program is underway. As of June 30, 2000 a total of 38.9 acres of land capable of accommodating up to 359 affordable units had been purchased by the RDA (sea Table X-7 and Figure X-4). Of the 38.9 acres, 4 acres are currently being devebped by NHDC. The RDA is seeking Non-profit Devebpment Corporations to assist in the development of the remaining 34 acres. X - 14 (uvne toot) A~18 Redevelopment Agency's Housing Production Plan Program 3:. RDA Assisted Multi-Family Project Development The RDA shall work with property owners, financial institutions, public agencies, non-profit housing development corporations, and for-profit corporations to construct new restricted, affordable rental units within the redevelopment area. 1-he RDA shall also work with private for- profit corporations to achieve affondable' housing goals. for and given to city-based housing development corporations, then to non-profit housing devebpmen corporations with experience in the area. Also, consistent with the HAS, tax credit participation shall be encouraged as the primary, but not the only, role of for-prafi! corporations. Consistent with the State Density Bonus Requirement for Affordable Housing, the RDA anticipates that affordable housing will be developed at 125% of the maximum density for the residential zone. Consistent with the HAS, a minimum of 40% of the units shall be restricted, affordable units. Implementation This program is underway. The RDA is assisting the SCHDC and the NHDC has developed 88 restricted, affordable units from land bank resources. The goal for this program is development of a total of 400 units of restricted, affordable rental housing units between Juty 1,2000 and June 30, 2005. Program 4: RDA Assisted Multi-Family Protect Acquisition The RDA shall identify and purchase, or facilitate purchase, of existing multi-family projects that become available for sate. On a case-by-case basis, the RDA shall lease, purchase, or by other means secure affordability restrictions for individual units within existing and new construction multi-family units. The purpose will be to increase the supply of restricted, affordable units. Consistent with HAS policy, 40% of the units shall be affordable to low and moderate income renters. lmplerrientation This program is underway. By June 30, 2000, the RDA had assisted the SCHDC with acquisition of 1,096 units. Consistent with HAS policy, 504 units (45%} are restricted, affordable units for low- and moderate-Income families. The RDA also assisted in the development of Willa del Norte, an BS-unit apartment complex, where all units are held as affordable. The goal of this program is to assist in conversion of one additional multi-family project to 40% restricted, affordable status between July 1, 2000 and June 30, 2005. Progrem 5: RDA Assisted Conservation of Multi-family Units at Risk of Conversion To Market Rate As required by law, the City has completed a study of the restricted, affordable multi-famiy units that are at risk of conversion to market rate. The RDA shall enter into discussion with property X-15 (June 2001) A~19 Redevelopment Agency's Housing Production Plan • owners regarding acquisition and/or conservaiion of the 79 units-at-risk that are k>cated within the redevelopment area. Ymplementation This program is underway. As of June 30, 2000; the RDA has conserved 592 units-at-risk. The RnA si,atl outer into discussion with orooertv owners regarding acquisition and/or conservation of units at risk during the next reporting period. Ot the 40a units-at-risK of conversion, i9 are locatea~wit i~ 'Ti'n the redevelopmen area. Program 6: RDA Assisted Existing Single-Family Acqulsklon and Rehabilitation The RDA shall assist non-profit agencies with the purchase of existing single-family homes that may then be offered for resale with affordability restrictions on future sales. Under this program, opportunities shall be explored to acquire homes that become available through mortgage foreclosure. Toward this goal, the RDA shall open communication with FHA, as well as with banks and mortgage companies, indicating interest in suitable purchases. In instances where rehabilitation is required as a condition of resale, acquisition and resale may be coordinated with the Cit~ls Housing Rehabilitation Program. These homes shall be incorporated into affordable owner or renter programs. Owner programs shalt be combined with limtted equity strategies to maintain affordability for the I'rfetime bf the project. Implementation This program is underway. Three units have been purchased, substantially rehabilitated, and sold with restricted affordability provisions. The goal of this program is to assist with the purchase and, ~ necessary, substantial rehabilitation of up to 20 units between July 1, 2000 and June 30, 2005, which shall then be rented or resold with affordability restrictions. Program 7: RDA Assisted Single-Family New Construction The RDA shall facilitate new construction single-family ownership programs, including but not limited to, single-family Infill projects, as well as condominium and townhouse developments. These projects may be rented or sold. Owner programs shall be combined with limited equity strategies to maintain affordability for the lifetime of the project. Implementation The goal of this program is 65 units of sktgle-family new construction between July 1, 2000 and June 30, 2005. These units may be rented or sold with restricted affordability provisions. X-16 I~u~B ~,i ,.~ • ._. • A ~20 • RedeveiopmentAgency's Housing Production Plan Program 8: RDA Assisted Single-Family Home Ownership The RDA shall continue to provide down payment assistance to qualified households through several programs, first-time homebuyer programs Including the program admiriistered by the Neighborhood Housing Services and NHDC. The NHDC operates a first time homebuyer program where homes are offered to buyers earning up to 90% of the area median income. The goal of this program Is to assist 75 qualifed single-family homebuyers July 1, 2000, and June 30, 2005. Program 9: Affordable Housing Overlay Zone The RDA shall investigate the feasibility of establishing an Affordable Housing Overlay Zone using the Senior Housing Overlay Zane as a model as recommended by the HAS (I-D-F>). The purpose of an overlay zone would be to facilitate the siting of affordable housing. Implementation Between Juty 1, 2000, and Juna 30, 2005, if adequate funding is available, or upon request by a developer, the RDA and the Cityrs Planning Division shall investigate the feasibility of establishing an Affordable Housing Overlay Zone to facilitate the siting of affordable housing. ', ~ Program 10: Mixed-Use Tha RDA and the City shall investigate the feasibility of a mixed-use overlay zone to facilitate the development of affordable housing. The primaryfocus shall be to ihtroduce residential use into commercial and possibly industrial districts where design opportunities would allow residential units above ground level n multi-{evel commercial buildings or behind commercial strips. Also, part of this study would investigate the feasibility of rezoning industrial areas for mixed industrial, commercial, and residential use. The study for this program may be combined w'rlh the Affordable Housing Overlay District Study. implemenfation Between July 1, 2000, and June 30, 2005, if adequate funding is available, or if requested by a developer, the RDA and the City's Planning Division shall research and develop a mixed use overlay zone, including an analysis of the benefits of a mixed use overlay zone compared with rezoning. X-17 A -21 (Juno 2W71 Redevelopment Agency's Housing Production Plan Program 11: Financial Mechanisms The RDA shall utilize a variety of financial mechanisms to assist deveopment of affordable housetg units including, but not limited to, the following: Loan write-down, mortgage revenue bonds, state iax credits, on-site improvement rusts. nff-site imornvemr~nt nests. and Citv fee waiver. and as well as a schnnl 4aa waiver for Senior Implementation This program is undervray. Between July 1, 2000, and June 30, 2005, the RDA shall continue to use the above financial mechanisms to assist with the development of restricted, affordable housing units. Program i2. Community Outreach A Community Outreach Program is desirable. An outreach program goes further than legally required public partic[pation and notice. It can serve as an educational tool to inform the community of the RDA's legal obligation to provide aflorciable housing as well as to inform the comrtiunity of the RDA's past actions which resulted in affordability to first time owners and first time renters. Further, a Community Outreach Program could enlist community direction on which programs and actions should be emphasized to reach mandated affordability goals. implementation Between July 1, 2000, and June 30, 2005,rf adequate funding is available, or if requested by a developer, the RDA, and the City's Planning Division shall oversee a community outreach program. TABLE X-7: Restricted, Affordable Housing Production in the Redevelopment Area from December 23 1981, throw h June 30, 2000 Program ., Total Total tn¢ome t.evet l,lnits Attcrd- . I . It. ` !tl W . Protected a61e Below 35°.6 36.45% 4&-so% . 6~-9Q%' Program 4: RDA Assisted 1,326 548 140 148 142 118 Muhfi-Family Acquisition Program 5: RDA Assisted 592 592 126 170 170 126 Conservation Units-At- Risk Program 6: Substantial 3 3 1 0 0 2 Rehabilitation F~cisting Single Family Units Program 7: RDA Assisted 65 65 4 11 21 29 Single Family New Construction Total 1,986 1,2Da 271 329 333 275 X-18 (,June 20011 ~^ • .` r A ~22 • ~A~-tach meat ~2- The following is a partial list of common job titles whose entry level salaries (national/state averages) are considered to be wages that qualify as a low or moderate income. This information was obtained from a variety of sources including a survey by USA Today, the City of Rancho Cucamonga General Plan anri the California Emolcvment Development Department. Accommodations (hotel) Administrative and support services Amusements, gambling, and recreation Apparel manufacturing Auto Mechanic Bank Tellers Bookkeeper) Building material and garden supply stores ClerklTypist ' Clothing and Clothing _ accessories stores Cook Credit intermediation and related aCtIV111e5 Dental Assistant Dental Hygienist Electrical equipment and appliances mfg. Electronics and appliance stores Fabricated metal products manufacturing Firemen Food and beverage stores Food manufacturing Food services and drinking places furniture and home furnishings stores Furniture and related products mfg. Gasoline stations General merchandise stores Groundskeeper Health and personal care stores Machinist Miscellaneous manufacturing Miscellaneous store retailers Museums, historical sites, zoos, and parks Nurse Aid Nursing and residential care facilities Personal and laundry services Plastics and rubber products manufacturing Police Officers Primary metals manufacturing Printing and related support activities Real estate Rental and leasing services Repair and maintenance Retail. Manager Scenic and sightseeing transportation Secretary Social assistance, incl. daycare Sporting goods, hobby, book, music stores Stock Clerk Teachers Tolley Transit and ground passenger transponation Truck Driver W aiter~Naitress Warehousing and storage Welder Wholesale trade, nondurable goods , A ~23 ~-a.dn rnent ~'3 • The following is a sampling of apartment complexes and their rents as shown on ~.vww.apartments.com This is not a complete listing of apartment units that are available in the City of Rancho Cucamonga. Apartment Complex Rental Unit Range The Reserve at Empire Lakes $1180 - $2030 I IL IV YUI JIICCI RUIIU IU liUl.4n,VI R~P, Verano at Rancho Cucamonga $1100 - $2536 Town Square 8200 Haven Ave. Rancho Cucamonga, CA 91730 Chambray at Victoria Arbors $1105 - $2025 7828 Day Creek Blvd. Rancho Cucamonga, CA 91739 Heritage at Victoria Arbors $1140 - $2040 7922 Day Creek Blvd. Rancho Cucamonga, CA 91730 Sierra Heights $1050 - $1845 10801 Lemon Ave RANCHO CUCAMONGA, CA 91737 Heritage Park Alta Loma Senior $750 - $995 Community 9601 Lomita Ct- Alta Loma, CA 91701 The Terrace Apartments $875 - $900 8383 Fir Dr. Rancho Cucamonga, CA 91730 Miramonte $968 - $1773 10757 Lemon Ave. Rancho Cucamonga, CA 91737 Ironwood At Empire Lakes $1185 - $1985 1 1100 4th Street Rancho Cucamonga, CA 91730 AMLI at Empire Lakes $1060 - $1920 9200 Milliken Ave. Rancho Cucamonga, CA 91730 A -24 LJ Barrington Place 7650 Etiwanda Ave. Rancho Cucamonga, CA 91739 Camino Real 7951 Etiwanda Ave. Rancho Cucamonga. CA 91739 . 8255 Vineyard Ave. RANCHO CUCAMONGA, CA 91730 Waterbrook Apartments 10400 Arrow Rte. Rancho Cucamonga, CA 91730 Village ort the Green 9400 Fairway View PI. Rancho Cucamonga, CA 91730 Victoria Woods 8496 Etiwanda Ave. Rancho Cucamonga, CA 91739 $1215 - $2035 $1210 - $2160 $113b' ='$'x480------ $1045 - $1520 $905-$2025 $1000 - $1530 • A-25 C d E Q • Q ~. c~ i Q U U O ~..~ Z Z c~ C U Z y W U d C7 _Z S ~~ w ~ --- .` \ \ ~--- W ~ \~ -- t_ _ I _ ~ I__f . _ ~~~~~~,,,,,,(( ~ ~ ~ u~ w ~ \ ~ ~ w ~ ~ N o\ gOg ~ iF ~ O w qq rn D O ~ w ^' o m ` C ~i o ^ } ~ x i 0 _ A `~ I w o ~i, ~b ~ w .r ~ ~I ~~ N R1 ~' w t u, O R 0 N S N N O N 0 r ~' m rn Oi g g g S S o o $ r» O O O O O O O O O O O O O O O O ~ ~ w w ~ ~ w to A-26 e N N C ~,y T U ~ ~ N ~ E o E m L ~ N K 4~ O n ~ 3 L cna m ~ m _- ~ o` _ _ d N y~l ' ~ E o c~ .' W ~ a n rn ~ `m ~' c Ul .- vl C T N ~ ~ O L i ~ L ~ IE ~ ~ ~ v c 3 E ~ ~ ~ ~ n o ~ E o ~ N ~ ~ U o L 0 ~ d ~ U ~ N_ C ~ O L ~ ~ C ~ C d ~ U 'p C d ~ n ~ C 0 rj ~ d N 6 O E 'O v °J m o ~ ~ y (4 /i N ~ ~ ~ ~ p ~ Q .~ ` y 'C m ~ _ U R r ~ .C T ~ E ~ a~i Q-° ~ v r w ° ti ~ aTi ' m ~ ~ y > d a~ a> ~ o y a ~ lV N Q ~ .a ~ ~ v ~' c0 E ` ~ rn ~ °' c U f0 >. C E y C 10 ~ 'K N M ~ E in ~ Q ti ~ L ~ ~ a N c ~ ~ S ~ 3 L c9 ~ C d C U ~ ~` T O O m n~ Ta° C M N U O U ni ~ O ~- N QQ y C c'S c~v n ~ ~ ~ 1 .~m~ ~ 5 REDEVELOPMENT AGENCY 15% HOUSING PRODUCTION REQUIRMENT* Very Low Low Moderate Pro'ect Tenure Less than 50% .50.79% 80-120% Unit Total Villa del Norte Rental 47 41 88 Las Caritas Rena] 14 0 14 Rancho Verde Village** Rental 26 10 16 52 Mountainside Rental 96 _ _ __ 48 __ ___ 44 ___ ___ 188 ___ _ _ _____ Monterey Village ~ __ __ Rental ____ 56 28 26 1l0 Sycamore Springs** Rental 30 IS 3 48 Pepperwood Rental 100 130 230 Villa Pacifica *` Rental 0 79 0 79 Heritage Pointe*" Rental ] 2 I2 24 Olen Jones Sr. Apartrnents** Rental ZZ 26 48 Woodhaven Manor ** Rental 30 28 58 Pazkview Place -Terra Vista Rental 30 30 Mountain View -Terra Vista Rental 54 54 Sycamore Terrace -Terra V. Rental 26 26 Evergreen -Terra Vista Rental 79 79 Waterbrook Rental 79 79 First Time Homebuyets Owner 2 9 75 86 Total 435 426 432 1293 Percentage ofTotal Units 34% 33% 33% *Based on 2001 General Plan projection of 18,368 residential units in the project area at buildout 2,755 affordable units will be required to meet Redevelopment Project Area reduirements. ** These units are outside the Pro~ect Area and have been calculated as 1 unit er 2 units roduced. Proposed Projects Tenure Very Low Low Moderate Total NHDC FoothilllEast " Rental 55 27 28 110 SCHDC Rancho Verde Ex Rental 6 13 19 Foothill Vistas Rental 83 83 166 Pro osed Pro ect Total 144 123 28 Cumulative Total 579 549 460 1588 Cumulative Percenta e 36°~ 35% 29°~ unit numbers are estimates Very Low 50-120% Total State f~landate 1,102 1653 2,755 A enc Totals 579 1009 ~ 1,588 Unit Deficit 1,167 2001 GP Project Area Unils 18,368 2005 Existing Units i 7,791 96% Built Out Unbuilt Residential Units 577 58% snsnoos A ~27 ~ m~ ~~ ~ ~ ~ n m d ~ ~ N (O 'r~0D2D w o 3 '{ O ~ Z d (D O n z f • • O G N ~ ~ ~ D `° -. w C w;,~=. G p~ N N N 3 m °m~ om 2 a m C O N d N N ~ m Cn n N ~ J O_ ~ (D o N_ T Z d N ~ ~ ~ O O C -.. ~ a ---- ~ 2- --- - ------ a o- m O ~ N O ~ ~ X ~ O a o m - d C ~ N Z O N ~ O 0 c ~ <~ ~ A ~ W V r O V W cO W r O U, N o C ~, o F o a° o e J ~ ~ , ~ J ~ O O ~ 7' " ~ O ~ D N T ID N 41 d ~ s C V ~ a p c i lD W V (D D p O V N m Z ~ `~ k' f °~ o ~ m ~ ~ 0 ~° ~ a N rn T 3 N ~ W m W m '"^ -~ ~ n o ~+ - ~ N_ ~ ~ V C A Vt o ~ ' ~ O ~ Oa O A O ? ~ ~ ~ ~ o o W ~ C O ~ j N ~ ( D^ Z ~ C .. ae O~ m d - a N rn Z r 2 O IC .j , f~ Z /\ tD Y/ o m o rn ~" v D N m '~ Y/ m Z A ~28 ~rHzzchment ~7 • 3 . ., ... . ~ . i S -- ; ,~ .' F r..... v rt.l ..~ '/~ 'aY~ `~ ..~w~a ...~. ta~~ '• '.v~pc:~ y -: Sci ~ ~_ ~~ t $~nb. City with inclusionary housing program County with inclusionary housing program °d~ Map provided by Greeninfo Netw-or}c. Research Methodology CCRH and NPH initiated the ?002/03 survey to reassess the use of inclusionaty housing practices across California.The survey ques[ionnaire used in CCRH's 1)94 lardy was modified, updated and expanded to include detail on housing production and.othcr progrun features. Local advocates, planning official and academics were consulted W [hcse revisions and a fma questionnaire was distribu[ed by mail in early April ?OOZ.AlI planning agencies listed in the California Planners' Wormation Network were contacted, including 58 counties and 467 cities (San Francisco is counted as both s city and county). ~~ e• _- ___- _- -..-•~ -' IaM ~ _ &IX~ ~~ _ __ ___ 1 .. ~\,ti ,.,.c... .~...,_.~ a. :• - - it ~ _. - t A49 To increase the response rate, two rounds of follow-up surveys were conducted. In • June 2002, the ques[ionnaire was again mailed and [elephone contact was made with nonresponding jurisdictions reported to have local programs. In January 2003, a short follow-up survey was prepared and forwarded to responding jurisdictions seeking additional information on methodology for determination of in-lieu fees, total fees collected, income targeting goals and production numbers. ?n total, 98 jurisdictions returned completed questionnaires accounting for 92 percent of known programs in California. Based on previous s[udies and Internet searches of jurisdiction Web sites, another nine jurisdictions [hat did not return completed questionnaires are judged to have some form of indusionary housing. Findings ~ A. Number of Inclusionary Jurisdictions As of March 2003, 107 California jurisdictions are known to use local Inclusionary practices to provide affordable housing outside of the requiremrnts of State redevelopment law. These include cities and counties that require affordable construction through an ordinance, general plan or permit approval process.ZThis Gst consists of 12 counties (21 - percent of all counties) and 95 cities (20~percent of aB cities). , The spread of Inclusionary programs is most dramatic among cities, which represent 41 of the 43 new programs. As the map (see p. 11) cJeazty demonstrates, indusionary housing is most prevafen[ in high-cos[ housing markets in the coastal counties. The most sigrtificant clusters are in the San Francisco Bay Area, metropolitan Sacramento, and San • Diego County.At Icast two dozen other Califorra jurisdictions are presently considering adopting Inclusionary housing, including the largest city Los Angeles. Figure ~1 shows the increasing popularity of Inclusionary housing in the 1990s. Neazly half (48 percent) of all programs were adopted during that decade compazed to about one-third (37 percent) in the 1970s and 1980s.The trend is continuing in thr 2000s. 12 A30 Figure 1: Year of Adoption ~ ua ,ou~~u~im umi uavc au iiiw uo,vum r uv,m u,c~ a ...b.,.,,. ,Turisdictions that have an In~.usionary Honsing Program Inclusionary housing programs req~jre developers to subsidize affordable housing as a condition of project royal. This may include making a percentage of the project available to law and moderate income ~idents or payment of an in-lieu fee. The following cities and counties report that they have some form of an inclusionary housing program. Agoura Hills American Canyon Arroyo Grande Bakersfield Beaumont „_,~ .~~., tseimont Benicia Berkeley Blythe Brawley Brea Buellton California City , Calistoga • Carlsbad Chula Vista Clayton Clovis hnga usa County Corcoran Coronado Corte Madera Cupertino Daly City Davis De] Mar Del Norte County De[ Rey Oaks ' Desert Hot Spruigs East Palo Alto Encinitas Escondido Fam~crsville Fort Bragg ,. Gonza]es Grover Beach Half Moon Bay Hawthorne Healdsburg et en Hills o lister Huntington Park Indio lone A~31 jurisdictions that have an tnctusior~ry riousmg rrugiaui Irvine La Habra La Quinta ' La Verne Lakewood Larkspur Lathrop Livermore Los Altos Los Angeles Los Gatos Mammoth Lakes Mann ~ounry Mendota Menlo Park Mill Valley Mono County Monterey Napa County. Newport Beach Novato Oceanside Palo Alto Paramount Patterson Penis Petaluma • Pico Rivera Placer County Pleasant Hill Port Hueneme . Portola Valley Poway Rancho Palos Verdes Redwood City Ripon Rolling Hiils Estates Salinas San Anse]mo San Bernardino County San Carlos San Clemente San Francisco San Gabriel San Jacinto San Juan Capistrano San Leandro San Luis Obispo San Marcos San Mateo County • San Rafael Santa Barbara County Santa Cruz Santa Cruz County A32 ~LL11JUll; L1UI1J Lllal llaVC 6I1111U UD WLaIy uvuou,J 1 ivY~.t uu, Santa Monica Sebastopol _ Shasta County final Hill lana Beach Sonoma South Gate Sutter County Vista Waterford Watsonville West Hollywood WP~f c~..~<,,,, ~.,1., -Jv iiiiis Winters Woodland Yolo County Yorba Linda Yountville ~ Web Search ~ Comment ~ LUPiN Home ~ CERES Home ~ A-33 ~~x Gil>o ~,~ F :. F ~[v.J L. C~ ~s:' s ~~r t`~J -t. ~~ t ~~ tl: J it ~ ~ P l T.Y. A~ /' ADVItiORS IN I't;ALI C/PRIVATE RCAL FSTSrL DIiV ELO I'M ENT MEMORANDUM ADVISORS IN: tu:u esc+rE To Rroevra.orMEwr nFeortnnnl.r HouslNe ecoNOMlc Uev[torelsNr SAN rINNCISCO ~~ JENIY KlY;l it TIMOTHY C. V:ELLY KATL FARIC FUNK UFilftll A4. Y.LItN RUQCP.T f. WETMORF. LOS / NGGLES Cn LVW E. HULLIS. II Kti I)~u:lN H.Ii rnn JAA1r5 A. IlAIIF, tool. C. .A n~DSaaoN cikrGORY D. Sou-I loo SAN D7 EGo . UID M.~TRIM 61.r. I:SUL C. MARVd Appendix A Ownership Projects Table 1: Affordable Sales Price Calculations Table 2: In-Lieu Fee Calculations Table 3: In-Lieu Fee Example Appendix B Rental Projects Table 1: Affordable Rent Calculations Table 2: In-Lieu Fee Calculations Table 3: In-Lieu Fee Example EXHIBIT B Linda Daniels, Redevelopment Agency Manager City of Rancho Cucamonga Frorn: Kathleen Head Date: August 13, 2007 Subject: In-Lieu Fee Methodology The City of Rancho Cucamonga is currently considering the adoption of an Inclusionar~ Housing Ordinance that will impose affordable housing requirements on certain residential projects. The draft "Ordinance" alloy/s developers to pay a fee in lieu of fulfilling the requirement in a limited number of cases. At your request, Keyser Marston Associates (KMA) has created a methodology to be used to calculate the in-lieu fee on a project-by-project basis. The purpose of this memorandum is to provide parameters for developers and the City to follov/ when calculating the in-lieu fee. The following describes the organization of the KtvlA analysis, v/hich is located at the end of this memorandum: Los, r:ceLSS. cAUroaw,a 90077 r rxo;. e: Zt3 G7.2 R09; r- rv;: 273 G72 5204 070a014Ldoc; P,C:KHH:ybd I aooo ooaioo 1 A34 To: Linda Daniels, City of Rancho Cucamonga Subject: In-Lieu Fee Calculation Methodology ORDINANCE OVERVIEW The Ordinance requirements apply to the following project types. August 13, 2007 Page 2 Residential projects that apply for an increase in density above the level allowed NY ,..c cc~a~crro~ra s~,~ s z~~ ~~~ ~y. 2. Mixed-use projects that apply to increase in the percentage of residential development allowed by the site's zoning. 3. Proposals to change the zoning on commercial or industrial sites to allow the development of residential uses. 4. The conversion of rental units to condominium ownership units, The following summarizes additional Ordinance parameters: 1 2 3. The Ordinance requirements are imposed on projects that include five or more units. The income and affordability requirements are: a. Ownership projects: 15% of the units must be set aside for moderate income households. b. Apartment projects: 7.5% of the units must be allocated to very-low income households and 7.5% of the units must be set aside for moderate income households. c. If the calculation results in a fraction of a unit, the total inclusionary units are rounded up to the next unit The inclusionary units must be a. Reasonably dispersed throughout the residential project; b. Proportional, in size, number of bedrooms, and location, to the market rate units; and c. Comparable to the market rate units included in the residential project in terms of design, materials, finished quality, and appearance. • u 0708014.doc; RQKHH:abd A35 isooo.oosrooi To: Linda Daniels, City of P.ancho Cucamonga August 13, 2007 Subject: In-Lieu Fee Calculation Methodology Page 3 • 4 Projects with six to 20 units are entitled io pay a tee in lieu of constructing the required income restricted units. Larger projects will only be allowed to pay the in-lieu fee in extraordinary circumstances, and then only with City Council approval. The in-lieu fee calculation methodology is based on the affordability gap associated v/ith _~.. _:._ a, _~! J_L~_ L -..L:.-~ 1. aL- /l-J:- .. ,_.__. _.....~ ..._ _... _ ......... .......~ .. ..- i ~ a requirements. The proposed methodologies for ov/nership and rental projects are described in the following sections of this analysis. OWNERSHIP PROJECT IN-LIEU FEE CALCULATION The proposed methodology for calculating the in-lieu fee for ov/nership projects is based on an affordability gap analysis that can be described as follows: The inclusionary requirement for the project is calculated. 2. The developer should be required to provide an independently prepared market study to establish the projected market rate sales prices for each product type • included in the project. 3. The maximum moderate income sales prices will be established by the City quarterly. 4. The projected market prices are compared to the maximum moderate income price to identify the financial gap created by each moderate income unit required to be included in a market rate project. The difference between the market sales price for a unit and the affordable price represents the affordability gap. 5. The affordability gap per unit is multiplied times the number of units that must be set-aside for moderate income households to quantify the effective cost of fulfilling the Ordinance requirements. 6. The amount of the total affordability gap represents the in-lieu fee payment to the City. Maximum Affordable 2007 Sales Prices (Appendix A-Table 1) The Ordinance applies the California Health and Safety Code Section 50052.5 (Section 50052.5) affordable housing cost definition to the moderate income inclusionary housing units. The calculations included in the Section 50052.5 definition are: u 0708Gi4.doc; P,C:KHH:ctd . i sooo.oos-roo f A-36 To: Linda Daniels, City of Rancho Cucamonga August 13, 2007 Subject: In-Lieu Fee Calculation Methodoloyy Page 4 1. The household incomes are based on benchmark household sizes of one person more than the number of bedrooms. 2. The household income is set ai 110% of the San Bernardino County median income (Miedian) for the benchmark household sizes. Z ThirFv_fiva n of /Z{o/1 of }ho .: ofinc.J hnrrc oL. nlA i ollnn o5o.1 fr. hn~,clnn related expenses. These expenses are defined as mortgage debt services payinenis, property taxes, maintenance costs, insurance costs and utility costs. For purposes of this analysis, these costs have been estimated as follovds: a. The insurance and maintenance costs are estimated as follows: Unit Tyge /Month /Year One Bedroom $125 $1,500 Two Bedrooms $150 $1,800 Three Bedrooms 5175 $2,100 Four Bedrooms 5200 52,400 b. The utility allowances include gas, electricity, trash and water expenses as provided by the San Bernardino County Housing Authority, as follows: Unit Tyoe /Month /Year One Bedroom $97 $1,164 Two Bedrooms $119 $1,428 Three Bedrooms $142 $1,704 Four Bedrooms $176 $2,112 c. The property tax cost is estimated ai 1.1 % of the projected affordable price for the units. 4. The mortgage amount that can be supported is based on the 30-year Farn~ie Mae rate. The current interest rate is estil„ated at 6.5%. 5. The home buyer down payment is set at 5% of the home's affordable price. As shown in Appendix A -Table 1, the maximwn 2007 affordable sales prices are estimated as follows: Unit Tyne _ Affordable Price One Bedroom $187,700 Two Bedrooms $208,200 Three Bedrooms $228,600 Four Bedrooms 5241,900 }_ • • • 070E014.doc; RQKHH:?btl A37 ~sooo.oos;oa • To: Linda Daniels, City of P.ancho Cucamonga Subject: In-Lieu Fee Calculation Methodology In-Lieu Fee Calculations (Appendix A -Tables 2 and 3) August 13, 2007 Page 5 Appendix A -Table 2 is a blank in-lieu fee calculation ~.vorksheet for developers to complete and submit to the City. Appendix A -Table 3 provides the calculations for a hypothetical project to assist tl~e developers in understanding the methodology. _. _ .. . I fIC GIICIj~JIJ SIC~JJ hall UC UGJUI lucu as Ivuv vva. 1. The moderate income unit requirement is calculated by multiplying the total number of units in the project times 15%. 2. The inclusionary requirement is allocated on a pro rata basis across the unif mix included in the project. 3. The difference between the market rate price and the affordable price for each unit type is calculated. This represents the affordability gap per unit. 4. The affordability gap per unit is multiplied times the number of income restricted units in each category. 5. The affordability gaps for each unit type are added together arrive at the total affordability gap. This represents the in-lieu fee for the project. The sample calculations are presented in Appendix A -Table 3, and can be summarized as follows: Total Units 15% Moderate UnltTVpe in Project Income Two Bedrooms 13 2 Three Bedrooms _ 13 _ __2 Totals 26 4 The market sales prices and resulting affordability gaps are as follows: Market Moderate Affordability Unit Types __ Prices Income Prices Gaps /Unit Two Bedrooms $380,000 $205,800 $174,200 Three Bedrooms 5405,000 $226,000 $179,000 To arrive at the in-lieu fee payment, the affordability gap per unit is multiplied times the required moderate income units. The folloviing summarizes the resulting in-lieu fee payments for the example project: o~oaors.aoo: ac:~c;~N 96a 1 a000.OG3!001 A-38 To: Linda Daniels, City of Rancho Cucamonga August 13, 2007 Subject: In-Lieu Fee Calculation Methodology Page G Affordability Inclusionary Total Affordability Unit Tvnes Gap /Unit ____ Units Gap ___~ Two Bedrooms 5174,200 2 5348,400 Three Bedrooms 5179,000 2 5358,000 Total Affordability Gap 5706,400 J unit in the market rate project, or 5176,G00 per inclusionary unit required in the project. APARTMENT PROJECT IN-LIEU FEE CALCULATION The proposed methodology to calculate the affordability gap for a rental project can be described as follows: 1. The inclusionary requirement for the project is calculated. 2. The developer should be required to submit an independently prepared market study to support the projected rent for each product type in the project. 3. The City will establish the allowable very-low income and moderate income rents annually. 4. The net operating income (NOI) for the project, excluding debt service payments, are estimated for: a. The project assuming all the units are rented at market rates, and b. The project assuming the inclusionary housing requirements are fulfilled. 5. The project's value is calculated based on the NOI capitalized at a rate consistent with current market conditions. The City will set the capitalization rate quarterly. . G. The difference between the project's value with all market rate units is compared to the value supported by the project with the inclusionary units to arrive at the affordability gap. 7. The amount of the affordability gap represents the in-lieu fee payment to the City. u • • Oi0801v'.doc; RC:KHH:gbd A-39 ~swo.oos~ooi • • To: Linda Daniels, City of Rancho Cucamonga Subject: In-Lieu Fee Calculation iJlethodology Maxirnurn Affordable Rents August 13, 2007 Page 7 The Ordinance applies the California Health and Safety Code Section 50053 affordable housing cost definition to the inclusionary housing units. The following summarizes the calculation methodology: ~i. i ne nousenoiu niconies ate uase~ ~n v~ncnniain IIUUJCIIUIU JIGCJ V~ UIIC'JGIJVII more than the number of'bedrooins. 2. The household income is set at 50% of the Median for very-loud income units and 110% of the Median for moderate income units. 3. 30% of the defined household income is allocated to housing related expenses. 4. The maximum allowable rent must be adjusted to reflect the utilities paid by the tenants. Based on the current allowances provided by the San Bernardino County Housing Authority, the utility allowances are as follows: Monthly Utility Unit Tyges Allov/ances Studio Units $32 One Bedroom $46 Two Bedrooms $59 Three Bedrooms $72 As shown in Appendix B -Table 1, the following summarizes the 2007 maximum affordable rents: Unit Ty~e Studio One Bedroom Two Bedrooms Three Bedrooms Maximum Rents ow Income _ Moderate Income $486 $1,107 $547 $1,258 $607 $1,407 $668 $1,556 Tire Ordinance imposes income and affordability restrictions on 15% of the units. The requirement is divided equally between very-lov/ and moderate income units. The resulting weighted average rents are: Unit Tunes Allowable Rent Studio Units $797 One Bedroom $903 Two Bedrooms $1,007 Three Bedrooms _ $1,112 A ~40 0708014.d°c; RCZKHH:abd 18000.003/001 To: Linda Daniels, City of Rancho Cucamonga August 13, 2007 Subject: In-Lieu Fee Calculation t~4ethodology Page 8 • h1-Lieu Fee Calculations (Appendix B -Tables 2 and 3) Appendix. B -Table 2 is a blank in-lieu fee calculation worksheet for developers to complete and submit to the City. Appendix B -Table 3 provides the calculations for a sample project to illustrate the calculation methodology. The analysis steps can be described as follows: 1. The inclusionary unit requirement is calculated by multiplying the total number of units in the project dines 15%. 2. The inclusionary requirement is allocated on a pro rata basis across the unit mix included in the project. 3. The difference between the NOI generated by the market rate project and the inclusionary project is calculated by comparing: a. The effective gross income (EGI) and b. The ongoing operating expenses. 4. The NOI is capitalized to quantify the project's value. The difference in value between the market rate and inclusionary scenarios represents the total affordability gap. 5. The total affordability gap represents the in-lieu fee for the project. The sample calculations are presented in Appendix B -Table 3, and can be summarized as follows: Total Units Inclusionary Unit Tti~pe _ in Project _Units One Bedrooms 27 4 Two Bedrooms 36 6 Three Bedrooms __ 27 4 Totals 90 14 The market rate rents used in the analysts are: One Bedroom Units 01,360 Two-bedroom Units $1,700 Three-bedroom Units 02,200 • D708014.doc; RC:KHH:gbd E1 ~ ~ 18000.003/001 To: Linda Daniels, City o` Rancho Cucamonga Subject: In-Lieu Fee Calculation Methodology August 13, 2007 Page 9 The total affordability gap is calculated as follows'. Market Rate Net Operatinglncome $1,138,000 Capitalization Rate 5% incwsionary Scenario $1,041,000 5% jrroectvalue a«,7oi,vvv 3~J,bbG,vOv a1,951,Ow i Based on the identified assumptions, the total in-lieu fee is $1,931,000. This equates to $21,500 per unit in the market rate project, or $137,900 per inclusionary unit required in the' project. u A~12 0708014.tloq RC:KHH:abd 160GD.CD3l001 n onto niv n OWNERSHIP EXAMPLES • 0708014.doc, P,C:KHH~.gbd A-43 laooo,ooaiool APPENDIX A -TABLE 1 AFFORDABLE SALE PRICE CALCULATIONS • INCLUSfONARY HOUSING IN-LIEU FEE METHODOLOGY RANCHO CUCAMONGA. CALIFORNIA 1-Bdrm 2-Bdrm 3-Bdrm 4-Bdrm I. 2007 San Bernardino County Median Income $47p00 $53,300 $59,200 563,900 ^^ Household~lncome @ 110% Median 552,140 $58,630 $65,120 $70,290 Income Allotted ro housing @ 35%, of Income $18,249 520,521 $22,792 $24,602 Onqoinq Expenses Maintenance & Insurance $1,500 $1,800 $2,100 $2,40D Utilities ' 1,164 1,428 1,704 2,112 Property Taxes @ 1.1% of Affordable Price 2,065 2,290 2,515 2,661 Total On-going Expenses $4.729 $5,518 $6.319 $7,173 III. Income Available for Mortgage $13,520 $15,003 $16,473 $17,429 Affordable Housing Price Supportable Mortgage @ 6.50% Interest ~ 5178,300 $197,800 $7.17.200 52.29,800 Down Payment @ 5% of Affordable Price 9,400 10,400 11 X00 ~ 12,100 Maximum Affordable Purchase Price 5187,700 5208,200 5226.600 5241,900 Based on 2007 San Bernardino County Housing Authority allowances. Assumes gas heating and cooking; basic electricity; air conditioning; vdafer and water heating; trash; and seveer. ` Based on file rate charged for FannietJ~ae 30-year fixed rate fully amortizing loans. • ?repay=_d dy; Keyser Marston Associates, Inc. File name: In-lieu Fee_d_13_O i.rls; APP Al A-QQ APPENDIX A -TABLE 2 LIEU FEE CALCULATIONS WNERSHIP PROJECTS-15% MODERATE INCOME INCLUSIONARY REQUIREMENT INCLUSIONARY HOUSING IN-LIEU FEE METHODOLOGY RANCHO CUCAMONGA, CALIFORNIA I. Project Descri ption q, Project Name B. Project Address II. On-Site Inclusionary Requirement A. Required Number of Inclusionary Units Total Project Units Inclusionary Requirement as °/ of Total Units Total Inclusionary Requirement (Round-upj Total Project % of Total, B. Inclusionary Unit Distribution Units Units' One-bedroom Units Two-bedroom Units Three-bedroom Units Four-bedroom Units • Totals Moderate III. Affordability Gap !Unit Calculation Market Prices Income Price One-bedroom Units ~ ~ $187,7D0 Two-bedroom Units ~ $208,200 Three-bedroom Units ~ $228,600 Four-bedroom Units 5241,900 - Affordability Inclusionary IV. Affordability Gap Calculation Gap I Unit Units One-bedroom Units Two-bedroom Units Three-bedroom Uniis Four-bedroom Units Total Affordability Gap 15% ;Required # of Inclusionary Units z Affordability Gap / Unit Total Affordability Total In-Lieu Fee' Per Total Unit Per Income Restricted Unit This column must add up to 100%. A4u!tiply the °/ of Total Units times the Total Inclusionary Requirement. The Total In-Lieu Fee is equal to the Total Affordability Gap Prepared by. Keyser PPZrs(on Associates. - Filename~ In-lieu Fee_8_13_07.x1s; AFP A2 A~45 APPENDIX A -TABLE 2 IN-LIEU FEE EXAMPLE OWNERSHIP HOUSING EXAMPLE INCLUSIONARY HOUSING IN-LIEU FEE METHODOLOGY RANCHO CUCAMONGA, CALIFORNIA I. Prolect Description A. Project Name B. Project Address 11. On-Site Inclusionary Requirement A. Required Nmnber of Inclusionary Units Total Project Units Inclusionary Requirement as % of Total Units Total Inclusionary Requirement (Round-up) B. Inclusionary Unit Distribution Two-bedroom Units Three-bedroom Units. Totals III. Affordability Gap I Unit Calculation Two-bedroom Units Three-bedroom Units IV. Affordability Gan Calculation Two-bedroom Units Three-bedroom Unils Total Affordability Gap Ovenership Example Rancho Cucamonga 26 15% 4 Required # of Total Project % of Total Inclusionary Units Units ' Units z 13 50% 2 13 50% 2 26 100% 4 Moderate ~ Affordability Gap I Market Prices Income Price Unit $380,000 $208,200 $171,800 $405,000 $228,600 $176,400 Affordability Inclusionary Total Affordability Gap /Unit Units Gap $171,800 2 $343,600 $176,400 2 $352,800 $696,400 Total In-Lieu Fee' $696,400 Per Total Unit - $26,800 Per Income Restricted Unit $174,100 ' This column must add up l0 1D0%. z Multiply the % of Total Units times the Total Inclusionary Requirement. } The Total In-Lieu Fee is equal to the Total Affordability Gap. • Prepared by: Keyser tnarton Associates Filename. In-lieu Fee_8_t3_07.x1s; APP A3 q-46 APPENDIX 8 -TABLE 1 . FFORDABLE RENT CALCULATIONS NCLUSIONARY HOUSING IN-LIEU FEE h1ETHODOLOGY RANCHO CUCAMONGA. CALIFORNIA I. 2007 San Bernardino County Median Income II. Very-Low Income Rents lJ..~~echnl.! Innnmc r1 Fno/ Ol~arii~n Income Allotted to Housine @ 30% of Income IJ~aximum Monthly Flousing Cost (Less) Monthly Utility Allowance Maximum Very-Low Income Rent III. Moderate Income Rents Household Income @ 110% Median Income Allotted to Housing @ 30% of Income Studio 1-Bdrm 2-Bdrm 3-Bdrm $41,400 $47,400 $53,300 $59,200 A9n 7M $93 70D $7F 650 $2.9.600 56,2.10 57,110 $7,595 $8,880 $518 $593 $666 5740 (32) (46) (59) (72) $486 $547 5607 - 5668 $45,540 552,140 $58,630 $65,120 513,662 $15,642 $17,589 519.536 Maximum Ivtonthly Housiny Cost $1,139 51,304 51,466 $1,628 (Less) Monthly Utility Allowance ' (32) (46) (59) (72j • Maxiin um Moderate Income Rent 51,107 51,256 51,407 $1,556 IV. Weighted Average Affordable Rent $797 $903 51,007 $1,112 Based on 2007 San Bernardino County Housing Authority allowances. Assumes gas heating and cooking; bzsic electricity, and air condillonina. - Based on 50% of the affordable unlts at very-low income and 50% of the affordable units at moderate income. Prepared by. Keyser Marston Associates, Inc. File name: In-lieu Fee_6_13_07.x1s; HPP B1 - /{-4] APPENDIX B -TABLE 2 IN-LIEU FEE CALCULATIONS • RENTAL PROJECTS -7.5% VERY-LOW INCOPAE & 7.5% fr1ODERATE INCOME IWC LUSIONARY REQUIREMENT INCLUSIONARY HOUSING IN-LIEU FEE METHODOLOGY RANCHO CUCAMONGA, CALIFORtJIA I. Pro iect Description A. Project Name _ _____ R PrnierV 4rl rlrocc II. On-Site Inclusionary Requirement A. Required Number of Inclusionary Units Total Project Unils Inclusionary Requirement as % of Total Units Total Inclusionary Requirement (Round-up) B. -Inclusionary Unit Distribution Studio Units One-bedroom Uniis Two-bedroom Units Three-bedroom Units Totals III. Rent Assum ptions Studio Units One-bedroom Units Two-bedroom Units Three-bedroom Units Total Project Units %of Total Units I Market Rent ' This column must add up to 100%. 2 1:4uliiply the % of Total Units times the Total Inclusionary Requirement. Weighted Avg Affordable Rent $797 $903 $1,007 $1,112 15% Required # of Inclusionary Units ~ u Prepared hy: Keyser Marston Associates Filename: In-lieu Fee 8_73_l)7.x15; APP 82 A-48 Page 5 of E APPENDIX B -TABLE 2 LIEU FEE CALCULATIONS ~ENTAL PROJECTS -7.5% VERY-LOW INCOME & 7.5 % MODERATE INCOME INCLUSIONARY REQUIREMENT INCLUSIONARY HOUSING IN-LIEU FEE METHODOLOGY RANCHO CUCAMONGA, CALIFORNIA IV. Protect Value Comparison o....a i..,........ Market Rate Units Studio Units One-bedroom Units Two-bedroom Units Three-bedroom Units Rent Restricted Units Studio Units One-bedroom Units Two-bedroom Units Three-bedroom Units Total Rent Income B. Effective Gross Income Total Rent Income (Less) Vacancy Allowance Effective Gross Income (EGI) C. Operating Expenses (Excluding Debt Service) General Operaliny Expenses Property Tazes Total Operating Expenses D. Net Operatiny Income (EGI -Operating Ezps) E. Project Value Net Operating Income Capitalization Pale Project with 100%@Market Inclusionary Rent Standards' Difference Total Project Value V total In-Lieu Fee ` Per Total Unil Per Income Restricted Unil a Based on BS% of the units at market rents and 15% of the units at the v+eighted averaye affordable rents. ' The Total In-Lieu Fee is equal to the difference between the project's value vdith 100% market rents and the value with the inclusionary housing obligation. Prepared by: Keyser Marston Associates Filename: In-lieu Fce_8_13 07.xIS; APP B2 A~9 Paye 6 of 8 APPENDIX B -TABLE 3 IN-LIEU FEE EXAMPLE RENTAL PROJECT INCLUSIONARY HOUSING IN-LIEU FEE METHODOLOGY RANCHO CUCAMONGA, CALIFORNIA I. Project Description A. Project Name B. Project Address Apartment Example Rancho Cucamonga II, On-Site Inclusionary Requirement A. Required Number of Inclusionary Units Total Project Units Inclusionary Requirement as °/o o(TOtal Units Total Inclusionary Requirement (Round-up) B. Inclusionary Unit Distribution One-bedroom Units Two-bedroom Unils Three-bedroom Units Totals Total Project Units % of Total Units' 27 30% 36 40% 27 30% III. Rent Assumptions One-bedroom Units Two-bedroom Units Three-bedroom Units 90 100% Weighted Avg Market Rent Affordable Rent 51,360 5903 51,700 ~ 51,007 52,200 51,112 ' This column must add up to 100°io. ` IVluliiply the % of Total Units times the Total Inclusionary Requirement. 90 15% 14 Required # of Inclusionary Units Z 4 6 4 i4 • • Prepared by: Y.eyser Marston Associates Filename'. In-lieu Fee 8_13_07.x1s; APP 63 Page 7 0`, 8 A-50 APPENDIX B -TABLE 3 ~N-LIEU FEE EXAMPLE ENTAL PROJECT INCLUSIONARY HOUSING IN-LIEU FEE METHODOLOGY RANCHO CUCAMONGA, CALIFORNIA Project with 100% @ Market Inclusionary IV. Proicct Value Comparison Rent Standards A. Rent Income FAarket Rate Units One-bedroom Units 27 23 Two-bedroom Units 36 30 Three-bedroom Units 27 23 Rent Restricted Units One-bedroom Units 4 Two-bedroom Units 6 Three-bedroom Units 4 Total Rent Income ~ 90 90 • Difference B. Effective Gross Income Total Rent Income $1,887,840 51,7G3,784 $124,056 (Less)Vacancy Allowance (94,392) (88,189] (6,203) Effective Gross Income (EGI) 51,7934gg 51,675,595 Si17,853 C. Operating Expenses (Excluding Debt Service) General Operating Expenses $405,OD0 $405,OOD > 50 Property Taxes 250,4D0 229,100 21,300 Total Operating Expenses ($655,400) ($634,100) (521,300) D. Net Operating Income (EGI -Operating Exps) E. Project Value Net Operating Income Capitalization Rate 51,138,048 51,041,495 $96,553 $1,138,048 $1,O~i1,495 5.0°/ 5.0% $22,761,000 $20,830,000 $1,931,OD0 Total Project Value V btal In-Lieu Fee' $1,931,000 Per Total Unii - $21,50C Per Income Restricted Unlt $137,90C a Based on 85% of the units of market rents and i 5"~5 of the units at the weiyhted average affordable rents. n The Total In-Lieu Fee is equal to the difference between the projects value vdith 100% market rents and the value with the inclusionary housing obliyaCion. Preparod by: Ysyser Pdarston Associates Filename: In-lieu Fee_8_73 07.r.1s; APP B3 A.51 Page 6 018 ;; ~= ~ ~, I II' _~. J' r.' . - - ~ • ~'<J;-~. ~L~~~`_i~!' i'.Fi~~_Lr `i. Il ~~f'et 1-''_.~. `:d ~; Jlii'~li. Cl w ~` ~ L.~ A DVI50135 IN P111ti 1(: /1'KIVA'rF RFAI. IISTn'I'f. D@VIfI C)I'Mf N'I' MEMORANDUM •UA! (S1nTl RLPlVILOI•MINI To: Linda Daniels, Redevelopment Agency Manager nrrounnea HouswG City of Rancho Cucamonga E•_C)N!JMIf, LTfV[l(11'MFNT snN Punnlosco From: Kathleen Head A. I[n 0.v KErs[It TIMQTNY C. K[uv Knit ~nnl[ FUNK Date: June 18 2007 11f 6111[ M, K[CN , , ROUfICf I. tNITM011[ ' Subject: -Inclusionary Housing Financial Feasibilit Anal sis L00. nNr:(I L] y y CAIVIN L. HALL 15. KATH IffN H. H[n° InMFS n. IlnO! Pnm C. ANOtnsom At your request, Keyser Marston Associates, Inc. (KMA) prepared a financial feasibility Gneconv u. tino~rl a) Kf VIF E. eNe:Tnoe, analysis for the proposed City of Rancho Cucamonga (City) Inclusionary Housing • IUII( L. noMtr Ordinance (Ordinance). The analysis is comprised of the following components: SnN r,Ircn cFnSL° ^^. TPIMKL[ P 1. KMA evaluated the financial impact created by the income and affordability aul C Mnnnn controls recommended at the Inclusionary Zoning Workshop conducted by the Housing Subcommittee of the Rancho Cucamonga Redevelopment Agency (Inclusionary Workshop). 2. KMA recommended a tiered schedule of income and affordability. restrictions to be imposed by the Ordinance. The recommended schedule is provided for new residential development proposed for land that is currently not zoned for residential uses; and new residential development on residentially zoned land. BACKGROUND Regional Housing Needs Assessment (RHNA) The Southern California Association of Governments (SCAG) periodically prepares a Regional Housing Needs Assessment (RHNA) that identifies housing production goals for the region. In turn, the RHNA serves as the basis for the City's Housing Element component of the General Plan. Given that the Housing Element must be certified by the California Housing and Community Development Department (HCD), it is imperative • for the City to be able to demonstrate that the RHNA goals can be met. LOS ANGELES, CALIFORN In 90071 .- PHONE 2i3 622 8095 ~ PAX 213 622 5204 E X F-I I B I T C 07050,8 doc; RC KHHtgbd 18000.003/001 A~52 To: Linda Daniels, City of Rancho Cucamonga June 18, 2007 Subject: Inclusionary Housing Financial Feasibility Analysis Page 2 • The RHNA goals to be fulfilled during the current five-year Housing Element cycle are: Number of Units % of Total Very-Low Income 317 25% Low Income 216 17% Above-Moderateylncome 504 39% Tota I 1, 282 100% As can be seen in the table, approximately 61% of the RHNA goals are tied to very-low, low and moderate income units. The other 39% is related to above-moderate income housing. Affordable Housing Production The proposed new developments in Rancho Cucamonga are focused on above- moderate income residential development, and it is anticipated that the RHNA goals in this category can be met without any government intervention. Comparatively, the market is not producing units that are affordable to low or moderate income households, and therefore government intervention will be required to fulfill the RHNA requirements for this type of housing. The Ordinance is one tool being considered by the City to assist in fulfilling these unmet needs. Inclusionary Housing Programs Over 130 jurisdictions in California currently include inclusionary housing programs as a component of their overall affordable housing strategies. Generally, inclusionary housing ordinances are designed to produce only a portion of the jurisdiction's affordable housing development; other programs provide for the majority of the affordable housing development within communities. Inclusionary housing programs typically impose a specific affordable housing requirement on new development, and then offer developers a range of options for fulfilling the affordable housing requirements. The most common options offered to developers are: 1. Construction of a defined percentage of income restricted units within new market rate residential projects; 0705018.tloc; RC:KHH:gbtl 18000.003/001 • • A ~53 To: Linda Daniels, City of Rancho Cucamonga June 18, 2007 Subject: Inclusionary Housing Financial Feasibility Analysis Page 3 • 2. Construction of a defined percentage of income restricted units in a project located in an off-site location; and Payment of an in-lieu fee, which will subsequently be used to assist in the development of affordable housing units within the community. The threshold requirements to be imposed on developers should reflect the established UIIIIICI IICeu IVI aiiuluauie iwusiny in the cornrnuniiy. The foiiowing anaysis is focused on the impacts associated with providing the units within market rate projects. A separate analysis recommends an in-lieu fee structure to be included in the program. INCLUSIONARY HOUSING PROGRAM FOUNDATION As the first step in the evaluation process it is necessary to identify the affordable housing requirements that will be imposed on the various product types. In establishing the requirements it is important to bath identify the composition of the unmet need for affordable housing within the community; and to recognize that the Ordinance should not place an onerous financial burden on the developers of market rate housing. Within that context, it is clear that inclusionary housing can only be expected to fulfill a portion of the unmet need for affordable housing. The Inclusionary Workshop recommended that the Ordinance set the inclusionary obligations as follows: Percents e of Units in Pro'ect Income Level Ownership Rental Very-Low 7.5% Moderate 15% 7.5% Total 15% 15% To assist in determining whether the proposed thresholds are reasonable, KMA performed a survey of over 100 California jurisdictions that currently impose inclusionary housing requirements. The results of this survey indicate that the proposed requirements fall within the norm of the income and affordability standards imposed by inclusionary housing programs being implemented throughout the state. It is important to understand that the impact created by the imposition of income and affordability restrictions varies from city-to-city. For example, the market rate home prices and rents in Rancho Cucamonga are significantly higher than the median price for homes in San Bernardino County. Nonetheless, the Rancho Cucamonga income and affordability standards must be based on the household incomes in the County. This • results in a disproportionate disparity between market rate prices and affordable prices. 0708018.doc; RC:KHH:gbd 16000.003/001 A-54 To: Linda.Daniels, City of Rancho Cucamonga June 18, 2007 Subject: Inclusionary Housing Financial Feasibility Analysis Page 4 It also further explains why it is anticipated that government intervention will be required to attract affordable housing units to Rancho Cucamonga. The courts have held that affordable housing is a "public benefit", and that locally imposed inclusionary housing ordinances are a legitimate means of providing this public benefit. The courts have further found that the requirements cannot deprive an owner of "all economically beneficial use" of the orooertv. However. to date, no definition bf all economically beneficial use has been provided. For reference purposes, it should be noted that inclusionary housing programs recently adopted in several California locations have been projected to generate land value reductions in the 30% range. In turn, the KMA evaluation of the Ordinance is focused on identifying income and affordability standards that would fall within that parameter. FINANCIAL FEASIBILITY ANALYSIS It is the KMA recommendation that the City establish separate income and affordability . standards for residential development occurring on residentially zoned land, and for residential development on non-residentially zoned land. Specifically, it is the KMA opinion that the requirements imposed on residentially zoned land should be set at levels that fall within the 30% land value diminution range. Comparatively, the City has • materially more latitude on non-residentially zoned land because, by definition, the imposition of income and affordability restrictions on residential development cannot deprive the owner of the economically beneficial use of their property. Affordability Gap Analysis The financial impact associated with fulfilling the affordable housing requirements within market rate projects is equal to the difference between the achievable market rate prices/rents and the allowable prices/rents for the income restricted units. This is known as the affordability gap, and the calculation methodology can be described as follows: 1. The projected market rate sales prices and rents are estimated for prototypical new residential projects. KMA performed a field survey of recently constructed projects to assist in: a. Identifying the product types currently being developed in the market place; and b. Estimating the achievable sales prices and rents. 2. The maximum affordable home prices for the income restricted units are calculated based on the following information: • 0705018.doc; RQKHH:gbd 18000.003!001 A-55 To: Linda Daniels, Clty of Rancho Cucamonga June 18, 2007 Subject: Inclusionary Housing Financial Feasibility Analysis .Page 5 a. The household income information used in the calculations is based on San Bernardino County income statistics. The household incomes for very-low and low income households are produced annually by the United States Department of Housing and Urban Development (HUD). This information is distributed by HCD annually. ii. The household incomes for moderate income households are produced and distributed annually by HCD. b. The affordable housing cost definition is based on the requirements imposed by California Health and Safety Code Sections 50052.5 and 50053. These standards must be applied to allow the Rancho Cucamonga Redevelopment Agency (Agency) to count the affordable housing units toward the fulfillment of the California Health and Safety Code Section 33413 inclusionary housing production requirements.' • ii. Units produced using this standard can also be counted towards the fulfillment of the City's RHNA affordable housing goals. 3. The difference between the market price and the affordable price represents the affordability gap associated with each income restricted unit required to be included in a market rate residential project. This gap is then multiplied times the number of units that must be income restricted to quantify the effective cost to a developer of fulfilling the inclusionary housing requirements on site. Ownership Projects To evaluate the impacts of the proposed inclusionary housing requirements, KMA tested the following prototype development alternatives: ' Units provided within redevelopment project areas can be counted on a 1:1 basis. Units provided outside a redevelopment project area receive 50% credit. 0705018.doc; RC:KHH:gbd 1 BOOD.003/OD 1 A-56 To: Linda Daniels, City of Rancho Cucamonga June 18, 2007 Subject: Inclusipnary Housing Financial Feasibility Analysis Page 6 A Townhomes: 100% Market Rate Scenario and Proposed Income and Affordability Standards Scenario B Townhomes: Feasible Affordability Mix Scenario C Townhomes: Density Bonus Scenario D Single-Family: Homes: 100% Market Rate Scenario and Proposed Income and Affordability Standards Scenario E Single Family Homes: Fe The 100% market rate unit scenarios provide a baseline against which to measure the impacts associated with the imposition of income and affordability restrictions. The results of the alternatives testing can be summarized as follows: Townhome Units 1. The requirement to set-aside 15% of the units for moderate income households acts to reduce the land value in the near-term by 69%. 2. If the objective is to limit the land value impact to +/- 30%, it will be necessary to set the affordable housing requirement at 6% of the total units. 3. The California State Density Bonus enacted under Senate Bill 1818 and Senate Bill 435 (State Density Bonus), allows fora 10% density bonus to be provided to an ownership project that allocates 15% of the base units to moderate income households. The KMA analysis indicates that if a developer took advantage of that density bonus, the impact on land value would be reduced to approximately 25%. The results of the townhoine analysis indicate that the income and affordability restrictions proposed at the Inclusionary Workshop impose an onerous burden on developers unless they can take advantage of the State Density Bonus. To reach an acceptable impact, without the use of the density bonus, the inclusionary requirement would need to be set at no more than 6% of the units. Single-Family Home Units 1. The proposed requirement to set-aside 15% of the units is estimated to reduce the land value by 57%. 0705018.doc; RC:KHH:gbd 18000.003/001 • \J A-57 To: Linda Daniels, City of Rancho Cucamonga June 18, 2007 Subject: Inclusionary Housing Financial Feasibility Analysis Page 7 • The developers of single-family home subdivisions do not typically perceive a value to receiving an increase in the allowable density. Within this context, it is the KMA recommendation that the inclusionary requirement for single-family homes should be set at 5% of the units. Rental Projects The KMA survey indicates that new apartment development is occurring in Rancho .Cucamonga, and that premium rents are being achieved for the units. However, the analysis also indicates that apartment development is occurring at very tight profit margins. To test the impacts associated with the proposed income and affordability restrictions on apartment development, KMA prepared pro forma analyses for the following prototype projects: ~endix Development Scenario F 100% Market Rate Scenario and Proposed Income and Affordability Standards Scenario G Feasible Affordability Mix Scenario H Density Bonus • 1. The requirement to set-aside 7.5% of the units for moderate income households and 7.5% of the units for very-low income households is projected to wipe out the land value entirely. 2. To reach an impact in the range of 30%, the restriction could be limited to moderate income units, and set at 10% of the total units in the project. 3. The State Density Bonus is based on a sliding scale related'to the depth of the affordability restrictions imposed on a project. The maximum density bonus allowed is 35%, and it can be achieved if 11% of the units aside for very-low income households. KMA estimates that the land value impact under this alternative would equal approximately 54%. Based on the results of the feasibility analysis, KMA recommends that the Ordinance require 10% of the units in apartment projects to be set aside for moderate income households. However, this standard does not assist the City in achieving iYs RHNA goals for very-low and lowi income households. As such, it may be advantageous to offer Agency financial assistance and/or City development standards relief to developers that fulfill their inclusionary housing requirements by providing units at the very-low and low income levels rather than at the moderate income level. 0705018.doc~, RC:KHH~.gbd 78000.003/001 A~58 To: Linda Daniels, City of Rancho Cucamonga June 18, 2007 Subject: Inclusionary Housing Financial Feasibility Analysis Page 8 CONCLUSIONSIRECOMMENDATIONS If developers produce affordable housing units within market rate projects, the City is relieved of the obligation to find suitable sites and qualified developers to provide the requisite number of affordable housing units. Therefore, it is the KMA recommendation that the City focus the Ordinance on the on-site fulfillment of the income and affordability restrictions. However. the Ordinance should also provide the Citv Council with the discretion to approve alternative methods for fulfilling the affordable housing obligations that comport with the Ordinance's stated goals and objectives. Income and Affordability Restrictions Based on the results of the preceding analysis, KMA recommends that Ordinance impose the following income and affordability restrictions on residential development: _ Non-Residentiall Zoned Land Ownership Income Level Townhomes Single-Family Rental Very-Low 7.5% Moderate 15% 15% 7.5% Total 15°/o 15% 15% Residentiall Zoned Land Ownership Income Level, Townhomes Single-Family Rental Very-Low Moderate 6% 5% 10% Total 6% 5% 10% If the City wishes to achieve a greater level of affordability within new residential projects, developers should be encouraged to make use of the State Density Bonus. In addition, the Agency could potentially provide financial assistance to developers that will agree to impose deeper affordability restrictions than those imposed by the Ordinance. Project Size Thresholds The KMA survey of inclusionary housing ordinances throughout the State indicates that there is wide variance in the size of residential projects that trigger income and affordability restrictions. To assist the City in establishing project size thresholds for the Ordinance, KMA summarized the survey results in the following table: 0705018.doc; RC:KHH:gbd lsooo.ooaiool u • u A-59 To: Linda Daniels, City of Rancho Cucamonga June 18, 2007 Subject: Inclusionary Housing Financial Feasibility Analysis Page 9 • All Projects are Subject to Requirements Projects with 5+ Units are Subject to Requirements Projects with 10+ Units are Subject to Requirements Other Threshold Limits rvuiiiuci vi Programs 21 42 30 14 The KMA survey indicates that the median threshold project size is set at five units, and that five units is also the most frequently applied threshold in the 107 jurisdictions. KMA also found that approximately 40% of the jurisdictions provide different restrictions for small projects than are required for mid- to large-sized projects. The most typical variations are: 1. Small projects are allowed to pay an in-lieu fee by right, and/or to pay a lower fee than is charged for larger projects. The in-lieu fee amounts are typically established in a schedule, with the fee increasing as a function of the project size; or - 2. The percentage of units required to be made affordable is reduced. Based on the survey results, KMA recommends that the City impose the Ordinance requirement on projects that include five or more units. KMA further recommends that projects with up to 20 units should be allowed to pay an in-lieu fee by right ,and that any fractional unit obligation should also be allowed to be fulfilled with the payment of an in- lieu fee. 0705018.doc, RC:KHH:gbd 18000.003/D01 A-60 APPENDIX A TOWNHOME: BASE CASE: 90 UNITS (18 UNITS/ACRE) • • Prepareo by: Y.eyser tdarston Associates, Inc. File name: Rancho_Cucanonga_Incl_Dens 06_18 O7.xls; TH_Base A~61 APPENDIX A -TABLE 1 ESTIMATED DEVELOPMENT COSTS TOWNHOME: BASE CASE: 90 UNITS (18 UNITSIACRE) AFFORDABLE HOUSING CASE STUDIES INCLUSIONARY HOUSING ANALYSIS RANCHO CUCAMONGA, CALIFORNIA 1. Land Cost 217,800 Sf Land Area II. Direct Costs' Rita VJnrk Cnctc 9'17 Ann .Cf I and droa Parking ~ Attached Garage 171 Spaces Podium 23 Spaces Below Ground 0 Spaces Building Shell Costs a 123,750 /Sf GBA Total Direct Costs III. Indirect Costs General Indirect Costs ° 13% Direct Costs Permits & Fees 90 Units Insurance 90 Units Developer Fee 3% Sales Revenues Total Indirect Costs IV. FinancinolClosina Costs Interest During Construction/Absorption 6 Loan Origination Fees s 524,768,000 Loan Amount Closing & Sales; & Warranties 7 Total Financing/Closing Costs . 54,519,000 V. Total Development Costs 123,750 /Sf GBA $260 /Sf GBA $32,091,000 Total Construction Costs 123,750 /Sf GBA $230 /Si GBA $28,777,000 ' Assumes that no prevailing wage requirements will be imposed on the development. ~ Total number of spaces equals 194, or 2.15 spaces/unit. ' Average unit size equal to 1,375 square feet. GBA includes a 0% allowance for non-livable area. Includes architecture, engineering & consulting; taxes, legal & accounting; marketing; and soft cost contingency. Construction and absorption period interest set at a 7.0% blended return on debt and equity. Carrying costs are based on an 18 month development period. Absorption rate is set at 15 units/month. s Based on a 70% loan to value ratio. ' Based on 5% of sales revenues plus 52,000lunit for warranties costs. PrepareC by: Keyser h5arston Associates, Inc. Filename: Rancho_Cucamonga_Ind_Dens_e6_t6_W.xIS; TH Base 515 /Sf Land sia nn /Cf I anri $D /Space $20,000 !Space $30.000 !Space $115 /Sf GBA $17,740,000 $2,306,000 520,000 /Unit 1,800,000 $15,D00 /Unit 1,350,000 1,062,000 $6,518,000 $1,951,000 2.5 Points 619,000 1,949,000 cv neo nnn 53,314,000 0 460,000 0 14,231,000 • `J A'62 APPENDIX A -TABLE 2 PROJECTED SALES REVENUES ~TOWNHOME: BASE CASE: 90 UNITS (18 UNITS/ACRE) AFFORDABLE HOUSING CASE STUDIES INCLUSIONARY HOUSING ANALYSIS RANCHO CUCAMONGA, CALIFORNIA MARKET RATE Two-Bedroom Units 45 Units @ Three-Bedroom Unifs ~ 45 Units @ $381,3D0 /Unit $17,158,500 $405,000 /Unit 18,225,000 535.383.500 Market Rate Units Two-Bedroom Units Three-Bedroom Units TOWNHOME: BASE 38 Units @ 38 Units @ Moderate Income $381,300 /Unit $14,489,400 $405,000 /Unit $15,390,ODD Moderate Income Units ~ Two-Bedroom Units - 7 Units @ $197,400 /Unit 1,381,600 Three-Bedroom Units 7 Units @ $221,400 /Unit 1,549,800 Total Sales Revenues $32,811,000 • t Sales price al 5305/sf of net livable area for Two-Bedroom Units; and $270/sf of net livable area for Three-Bedroom Units. z Moderate income is based on 110% of the County median income. 35% of income is allocated to housing related expenses. ~ Housing related expenses include mortgage debt service @ 6.5% interest; property taxes @ 1.1% of affordable price; HOA @ $2,700 for Two-Bedroom Units & $2,700 for Three-Bedroom Units; utilities @ $1,428 for Two- Bedroom Units & 51,704 for Three-Bedroom Units; & 5% down payment. Prepared by: Keyser Marston Associates, Inc. File name'. RanUo_Cucamon9a_Incl_Dens_O6_i a_ei.xls; TH_Base A-63 APPENDIX A -TABLE 3 LAND VALUE IMPACT ANALYSIS TOWNHOME: BASE CASE: 90 UNITS (18 UNITSIACRE) AFFORDABLE HOUSING CASE STUDIES INCLUSIONARY HOUSING ANALYSIS RANCHO CUCAMONGA, CALIFORNIA MARKET RATE SCENARIO Total Sales Revenues See APPENDIX A -TABLE 2 535,383,500 Total Development Costs See APPENDIX A -TABLE 1 $32,091,D00 Tofal Sales Revenues Total Development Costs 15% Moderate Income See APPENDIX A -TABLE 2 See APPENDIX A -TABLE 1 $32,811,OD0 $32,091 ,ODO Net Land Value Reduction Decrease in Land Value $2,302,000 • Prepared by: Keyser Marston Associates, Inc. Rte name: Rancho_CUCamonga_Incl_Dens 06_18_O7.xls', TH_Base A-64 APPENDIX B TOWNHOME: FEASIBLE AFFORDABILITY MIX: 90 UNITS (18 UNITS/ACRE) • u PrepareC by: Keyser Marston Associates, Inc. File name: Rancho_Cucamonga_Incl_Dens O6_18_D7.xls; TH Feasible A~65 APPENDIX B -TABLE 1 ESTIMATED DEVELOPMENT COSTS • TOWNHOME: FEASIBLE AFFORDABILITY MIX: 90 UNITS (18 UNITSIACRE) AFFORDABLE HOUSING CASE STUDIES INCLUSIONARY HOUSING ANALYSIS RANCHO CUCAMONGA, CALIFORNIA I. Land Cost 217,800 Sf Land Area $15 !Sf Land $3,314,000 II Diract Costs Site Work Costs 217,800 Sf Land Area $14.00 /S( Land $3,049,000 Parking z Attached Garage 177 Spaces $0 /Space 0 Podium 23 Spaces $20,000 !Space 460,000 Belov+Ground 0 Spaces $30,000 /Space 0 Building Shell Costs a 123,750 /Sf GBA $115 /Sf GBA 74,231,000 Total Direct Costs $17,740,000 III. Indirect Costs General Indirect Costs ° 13% Direct Costs $2,306,000 Permits & Fees 90 Units $20,000 !Unit 1,800,000 Insurance 90 Units $15,000 /Unit 1,350,000 Developer Fee 3% Sales Revenues 1,062,000 Total Indirect Costs $6,518,000 • IV. FinancinglClosing Costs Interest During Construction/Absorption 5 $1,951,000 Loan Origination Fees 5 $24,768,000 Loan Amount 2.5 Points - 619,000 Closing & Sales; & Warranties 7 1,949,000 Total Financing/Closing Costs ~ $4,519,000 V Total Development Costs 123,750 /Sf GBA $260 /Sf GBA $32,091,000 Total Construction Costs ~ 123,750 /Sf GBA $230 /Sf GBA $28,777,000 Assumes that no prevailing wage requirements will be imposed on the development. a Total number of spaces equals 194, or 2.15 spaces/unit. ' Average unit size equal to 1,375 square feet. GBA includes a 0% allowance for non-livable area. ° Includes architecture, engineering & consulting; taxes, legal 8 accounting; marketing; and soft cost contingency. s Construction and absorption period interest set at a 7.0% blended return on debt and equity. Carrying costs are based on an 18 month development period. Absorption rate is set at 15 unitslmonlh. 5 Based on a 70% loan to value ratio. Based on 5% of sales revenues plus $2.000lunit for warranties costs. • Pre DareO by'. Keyser Marston Associates, Inc. File name: Rancho_Cucamonga_Incl_Dens o5_i8_07.x1s', TH Feasible A-66 APPENDIX B -TABLE 2 PROJECTED SALES REVENUES TOWNHOME: FEASIBLE AFFORDABILITY MIX: 9D UNITS (16 UNITSIACRE) .AFFORDABLE HOUSING CASE STUDIES INCLUSIONARY HOUSING ANALYSIS RANCHO CUCAMONGA. CALIFORNIA MARKET RATE SCENARIO' Two-Bedroom Units 45 Units @ $381,300 /Unit $17,158,500 Three-Bedroom Units 45 Units @ $405,000 /Unit 18,225,000 Total Sales Revenues $35,383,500 TOWNHOME: FEASIBLE AFFORDABILITY MIX: 6°/ Moderate Income Market Rate Units' Two-Bedroom Unils 42 Units @ 5381,300 /Unit $16,014,600 Three-Bedroom Units 42 Uni(s @ 5405,000 /Unit $17,010,000 Moderate Income Units z Two-Bedroom Units 3 Unils @ $197,400 /Unit 592,2D0 Three-Bedroom Units 3 Units @ $221,400 /Unit 664200 Total Sales Revenues ~ $34,281,000 l.J Sales price at $305/sf of net livable area for Two-Bedroom Units; and 5270/sf of net livable area for Three-Bedroom Units. z Moderate income is based on 110% of the County median income. 35% of income is allocated to housing related expenses. Housing related expenses include mortgage debt service @ 6.5% interest; property taxes @ 1.1 % of affordable price; HOA @ $2,700 for Two-Bedroom Units & $2,700 for Three-Bedroom Units; utilities @ $1,428 for Two-Bedroom Units & 51,704 for • Three-Bedroom Unils; 8 5% down payment. Preparetl by: Keyser tdarston Assoazles, Inc. Pile name: Rancho Cucamonga_Ind_~ens_06_18_D7.xls; TH Feasible A~67 APPENDIX B -TABLE 3 LAND VALUE IMPACT ANALYSIS TOWNHOME: FEASIBLE AFFORDABILITY MIX: 90 UNITS (18 UNITSIACRE) AFFORDABLE HOUSING CASE STUDIES INC LUSIONARY HOUSING ANALYSIS RANCHO CUCAMONGA, CALIFORNIA MARKET RATE SCENARIO Total Sales Revenues See APPENDIX B -TABLE 2 535,383,500 Total Development Costs See APPENDIX B -TABLE 1 532,091,000 Total Sales Revenues Total Development Costs Net Land Value Reduction °/ Decrease in Land Value $987,000 30% • • Prepared by: Keys_r Marston Associa!es, Inc File name: Rancho_Cucamonga_Incl_Dens_06_iB_07.x1s; TH_Feasible 6% Moderate Income See APPENDIX B -TABLE 2 534,281,000 See APPENDIX B -TABLE 1 532,091,000 A-68 APPENDIX C TOWNHOME: DENSITY 80NUS: 99 UNITS (20 UNITSlACRE~ • Preparetl by: Keyser Marston Assouales, Inc. Fle name Rancho_Cucamonga_Incl_Dens_O6_1 B_07 xls', TH_DenSiA-69 APPENDIX C -TABLE 1 ESTIMATED DEVELOPMENT COSTS TOWNHOME: DENSITY BONUS: 99 UNITS (20 UNITSIACRE) AFFORDABLE HOUSING CASE STUDIES INCLUSIONARY HOUSING ANALYSIS " RANCHO CUCAMONGA, CALIFORNIA I. Land Cost II. Direct Costs' Site WorK UostS Parking ~ Attached Garage Podium Below Ground Building Shell Costs a Total Direct Costs III. Indirect Costs General Indirect Costs ° Permits & Fees Insurance Developer Fee - Total Indirect Costs IV. FinancinglClosinq Costs 217,800 Sf Land Area 2 i7,ow o. Laiiu n,ca 213 Spaces 0 Spaces 0 Spaces 136,250 /Sf GBA 13% Direct Costs 99 Units 99 Units 3% Sales Revenues Interest During Construction/Absorption s Loan Origination Fees e $27,254,000 Loan Amount Closing & Sales; & Warranties ~ Total FinancinglClosing Costs V. $4,910,000 Total Development Costs 136,250 /Sf GBA 5250 /Sf GBA $34,008,000 Total Construction Costs 136,250 /Sf GBA $230 /Sf GBA $30-,694,000 ' Assumes that no prevailing wage requirements will be imposed on the development. Total number of spaces equals 213, or 2.15 spaces/unit. ' Average unit size equal to 1,376 square feet. GBA includes a 0% allowance for non-livable area. ° Includes architecture, engineering & consulting, taxes, legal & accounting; marketing', and soft cost contingency. Construction and absorption period interest set at a 7.0% blended return on debt and equity. Carrying costs are based on an 18 month development period. Absorption rate is set at 15 units/month. e Based on a 70'/0 loan to value ratio. ~ Based on 5% of sales revenues plus 52,000/unit for warranties costs. Preparetl by. Keyser Marston Associates, inc. File name: Rancho Cucamonga_Incl_Dens_O6_i 6_O7.xls', TH_Density $15 /Sf Land $3,314,000 Wt~..,.. ,,,, ~c„c W.,,., .. ' $0 /Space 0 $20,000 /Space 0 $30,000 /Space 0 $115 /Sf GBA 15,669,000 $18,718,000 $2,433,000 $20,000 /Unit 1,980,000 $15,000 /Unit 1,485,000 1,168, 000 $7,066,000 $2,084,000 2.5 Points 681,000 2,145,000 • • A ~70 APPENDIX C -TABLE 2 PROJECTED SALES REVENUES TOWNHOME: DENSITY BONUS: 99 UNITS (20 UNITSIACRE) AFFORDABLE HOUSING CASE STUDIES INCLUSIONARY HOUSING ANALYSIS RANCHO CUCAMONGA, CALIFORNIA TOWNHOME: DENSITY BONUS: 15% Moderate Income (Base Units) Market Rate Units' Two-Bedroom Units 42 Units @ $381,300 !Unit $16,014,60D Three-Bedroom Units 43 Units @, ~ $405,000 !Unit $17,415,000 Moderate Income Units ~ Two-Bedroom Units 7 Units @ $197,400 /Unit 1,381,800 Three-Bedroom Units ~ 7 Units @ $221,400 /Unit 1,549,800 Total Sales Revenues $36,361,200 • Sales price at $305/sf of net livable area for Two-Bedroom Units; and $270Isf of net livable area for Three-Bedroom Units. ~ Moderate income is based on 110% of the County median income. 35% of income is allocated to housing related expenses. Housing related expenses include mortgage debt service @ 6.5% in`•.erest; property taxes @ 1.1% of affordable price, HOA @ $2,700 (orTwo-Bedroom Units & $2,700 for Three-Bedroom Units; utilities @ $1,428 for Two- Bedroom Units & $1,704 for Three-Bedroom Units; & 5% down payment. Prepared by: Keyser Marston Associates, Inc. File name: Rancho_Cucamonga Incl_Dens_05_10_07.x1s; TH_Density A ~71 APPENDIX C -TABLE 3 LAND VALUE IMPACT ANALYSIS TOWNHOME: DENSITY BONUS: 99 UNITS (20 UNITS/ACRE) AFFORDABLE HOUSING CASE STUDIES INCLUSIONARY HOUSING ANALYSIS RANCHO CUCAMONGA. CALIFORNIA Total Sales Revenues Total Development Costs See APPENDIX A -TABLE 2 $35,383,500 See APPENDIX A -TABLE 1 532.091.000 TOWNHOME: DENSITY BONUS Total Sales Revenues Total Development Costs Net Land Value Reduction Decrease in Land Value 5841,000 25°/ J -J Preparetl by: Keyser Marston Associates, Inc. rile name'. Rancho_CUCamonga_Ind_Dens Oo_i e_o7.zls', TH_Density 15% Moderate Income (Base Units) ' See APPENDIX C -TABLE 2 536,361,200 See APPENDIX C -TABLE 1 534,008,000 A -72 APPENDIX D SFH: BASE CASE: 26 UNITS (5 UNITS/ACRE) • W Prepared by. Keyser Marston Associates, Inc. File name: Rancho_Cucamonga Ind_Dens_OG_18_07.x1s; SFR_Base A-73 APPENDIX D -TABLE 1 ESTIMATED DEVELOPMENT COSTS SFH: BASE CASE: 26 UNITS (5 UNITS/ACRE) AFFORDABLE HOUSING CASE STUDIES INCLUSIONARY HOUSING ANALYSIS RANCHO CUCAMONGA, CALIFORNIA I. Land Cost II. Direct Costs ' Site Work Costs Parking s Attached Garage Podium Below Ground Building Shell Costs a Total Direct Costs III. Indirect Costs General Indirect Costs Permits & Fees Insurance Developer Fee Total Indirect Costs IV. Financing/Clgsng Costs 217,800 St Land Area 217,800 Sf Land Area 65 Spaces 0 Spaces 0 Spaces 76,700 /Sf GBA 13°/ Direct Costs 26 Units 26 Units 3% Sales Revenues Interest During Construction/Absorption s Loan Origination Fees s ~ $13,807,000 Loan Amount Closing & Sales; & Warranties ~ Total FinancinylClosing Costs V $15 /Sf Land 53,314,000 $14.00 !Sf Land $3,049,000 $0 /Space ~ 0 $20,000 (Space 0 $30,000 (Space 0 $80 ISf GBA 6,136,000 $9,185,000 $1,194,000 $20,000 /Unit 520,000 $15,000 /Unit 390,000 592,000 $2,696,000 $981,000 2.5 Points 345,000 1,038,OD0 $2,364,000 total Development Costs 76,700 /Si GBA $230 !Sf GBA $17,559,000 total Construction Costs 76,700 /Sf GBA $190 ISt GBA $14,245,000 ' Assumes that no prevailing vaage requirements will be imposed on the development. '- Total number of spaces equals 65, or 2.50 spaceslunit. ~ Average unit size equal to 2,950 square feet. GBA includes a 0% allowance for non-livable area. s Includes architecture, engineering & consulting; taxes, legal & accounting; marketing; and soft cost contingency. s Construction and absorption period interest set at a 7.0% blended return on debt and equity. Carrying costs are based on an 18 month development period. Absorption rate is set at 15 units/month. e Based on a 70% loan to value ratio. ' Based on 5% of sales revenues plus $2,000/unit for warranties costs. - • u w Preoarea by: Keyser Marston Associates, Inc. File name'. Rancho_Cucamonga InU_Dens_O6 19_o7.xls: SF R_Base A ~74 APPENDIX D • TABLE 2 PROJECTED SALES REVENUES SFH: BASE CASE: 26 UNITS (5 UNITSIACRE) AFFORDABLE HOUSING CASE STUDIES INCLUSIONARY HOUSING ANALYSIS RANCHO CUCAMONGA, CALIFORNIA MARKET RATE SCENARIO Three-Bedroom Units 13 Units @ $775,700 (Unit $10,084,100 Four-Bedroom Units 13 Units @ $741,500 /Unit 9,639,500 R ~ a ~ ~.3 Fnn CS ~C ' SFH: BASE CASE: 15°/ Moderate Income Market Rate Units' Three-Bedroom Units 11 Units @ $775,700 /Unit $8,532,700 Four-Bedroom Units ~ - 11 Units @ $741,500 /Unit $8,156,500 Moderate Income Units z Three-Bedroom Units 2 Units @ $221,400 /Unit 442,800 Four-Bedroom Unils 2 Units @ 5238,300 /Unit 476,600 Total Sales Revenues - 517,608,600 • Sales price at $267/sf of net livable area for Three-Bedroom Unils; and $2471sf of net livable area for Four-Bedroom Units. ~ Moderate income is based on 110'/° of the County median income. 35% of income is allocated to housing related expenses. Housing related expenses include mortgage debt service @ 6.5% interest; property taxes @ 1.1 % of • affordable price; HOA @ 52,700 for Three-Bedroom Units & 52,700 for Four-Bedroom Units; utilities @ $1,704 for Three- Bedroom Units & 52,112 for Four-Bedroom Units; & 5% down payment. Prepared by: Keyser Marston Associa!es, Inc. File name'. Rancho Cucamonga_Intl_Dens O6_18_07.x1s: SFR Base - A ~75 APPENDIX D -TABLE 3 LAND VALUE IMPACT ANALYSIS SFH: BASE CASE: 26 UNITS (5 UNITS/ACRE) AFFORDABLE HOUSING CASE STUDIES INCLUSIONARY HOUSING ANALYSIS RANCHO CUCAMONGA, CALIFORNIA MARKET RATE SCENARIO Total Sales Revenues See APPENDIX D -TABLE 2 $19,723,600 Total Development Costs See APPENDIX D -TABLE 1 $17,559,000 Total Sales Revenues Total Development Costs IJet Land Value Reduction Decrease in Land Value $1,893,000 • • • Prepaietl by: Keyser Marston Associates, Inc. File name: Rancho Cucamonga_Ind_Dens_o6_t5_07 xls; SFR_Base 15% Moderate Income See APPENDIX D -TABLE 2 $17,608,600 See APPENDIX D -TABLE 1 $17,559,000 A-76 APPENDIX E SFH: FEASIBLE AFFORDABILITY MIX: 26 UNITS (5 UNITS/ACRE) • • Preparetl by. Keyser Plarston Associates. Inc. File name' Rancho_Cucamonga_Incl Dens_O6_18_07 xls'. SFR_Feasible A-77 APPENDIX E -TABLE 1 ESTIMATED DEVELOPMENT COSTS SFH: FEASIBLE AFFORDABILITY MIX: 26 UNITS (5 UNITS/ACRE) AFFORDABLE HOUSING CASE STUDIES INCLUSIONARY HOUSING ANALYSIS RANCHO CUCAMONGA, CALIFORNIA Land Cost II. Direct Costs' Site Work Costs Parking' Attached Garage Podium Below Ground Building Shell Costs ~ Total Direct Costs III. Indirect Costs General Indirect Costs ° Permits 8 Fees Insurance Developer Fee Total Indirect Costs IV. FinancinglClosinq Costs 217,800 Sf Land Area 217,800 Sf Land Area 65 Spaces 0 Spaces 0 Spaces 76,700 /Sf GBA 13% Direct Costs 26 Units 26 Units 3% Sales Revenues Interest During Construction/Absorption s Loan Origination Fees e $13,807,000 Loan Amount Closing 8 Sales; 8 Warranties ~ Total Financing/Closing Costs $2,364,000 V Total Development Costs 76,700 /Sf GBA $230 !Sf GBA ~ $17,559,000 Total Construction Costs 76,700 /Sf GBA $190 /Sf GBA $14,245,000 ' Assumes that no prevailing wage requirements will be imposed on the development. a Total number of spaces equals 65, or 2.50 spaces/unit. Average.dnit size equal to 2,950 square feet. GBA includes a 0% allowance for non-livable area. 4 includes architecture, engineering 8 consulting; taxes, legal 8 accounting; marketing; and soft cost contingency. s Construction and absorption period interest set at a 7.0% blended return on debt and equity. Carrying costs are based on an 18 mon`.h development period. Absorption rate is set at 15 units/month. 6 Based on a 70% loan to value ratio. ' Based on 5% of sales revenues plus $2,000/unit for wa«anties costs. 515 /Sf Land $3,314,000 $14.00 ISi Land $3,049,000 $0 /Space 0 $20,000 !Space 0 $30,000 /Space 0 $80 /Sf GBA 6,136,000 $9,185,000 $1,194,000 $20,000 /Unit 520,000 $15,000 /Unit 390,000 592,000 sz,sss,ooo $981,000 2.5 Points 345,000 1,038,000 • `J • Prepared by Keyser Marston Associates, Inc. File name: Rancho_Cucamonga_Incl_Dens_06_18_07.x15; SFR_Feasible A-78 APPENDIX E -TABLE 2 PROJECTED SALES REVENUES • SFH: FEASIBLE AFFORDABILITY MIX: 26 UNITS (5 UNITSIACRE) AFFORDABLE HOUSING CASE STUDIES INCLUSIONARY HOUSING ANALYSIS RANCHO CUCAMONGA, CALIFORNIA MARKET RATE SCENARIO ' Three-Bedroom Units 13 Units @ $775,700 /Unit $10,084,100 Four-Bedroom Units 13 Units @ $741,500 /Unit 9,639,500 10[al Ja~ S eve uca - 41Q 79'2 FM SFH: FEASIBLE AFFORDABILITY MIX: 5°/ Moderate Income Market Rate Units' Three-Bedroom Units 12 Units @ $775,700 (Unit $9,308,400 Four-Bedroom Units ~ ~ ~ 12 Units @ $741,500 /Unit $8,698,000 Moderate Income Units z Three-Bedroom Units Unit@ 5221,400 /Unit 221,400 Four-Bedroom Units 1 Unit @ 5236,300 /Unit 238,300 Total Sales Revenues $18,666,100 ' Sales price at $267/sf of net livable area for Three-Bedroom Units; and S247lsf of net livable area for Four-Bedroom Units. z Moderate income is based on 110% of the County median income. 35% of income is allocated to housing related expenses. Housing related expenses include mortgage debt service @ 6.5% interest; property taxes @ 1.1% of • affordable price; HOA @ $2,700 for Three-Bedroom Units & $2,700 for Four-Bedroom Units; utilities @ $1 ,704 for Three- Bedroom Units & $2,112 for Four-Bedroom Units; & 5% down payment. Preparetl by. Keyser fdarston Associates, Inc. ~ - File name'. Ran[ho_CUCamonga_Incl_Dens_os_18_o7 xis', SFR_Feasiyl 79 APPENDIX E -TABLE 3 LAND VALUE IMPACT ANALYSIS • SFH: FEASIBLE AFFORDABILITY MIX: 26 UNITS (5 UNITSlACRE) AFFORDABLE HOUSING CASE STUDIES INCLUSIONARY HOUSING ANALYSIS RANCHO CUCAMONGA, CALIFORNIA I. MARKET RATE SCENARIO Total Sales Revenues See APPENDIX E - TABLE 2 $19,723,600 Total Development Costs See APPENDIX E -TABLE 1 $17,559,000 Total Sales Revenues Total Development Costs Net Land Value Reduction Decrease in Land Value $946,000 u • 5% Moderate Income See APPENDIX E -TABLE 2 518,666,100 See APPENDIX E -TABLE 1 $17,559,000 Preparetl by: Keyser lsarston Fssociates, Inc. Fiie name'. Rancho_Cu~mon9a_Ind_Dens_O6_18_07.x15; SFR_Feasible A ~80 • APPENDIX F APARTMENT: BASE CASE: 90 APARTMENT UNITS (30 UNITS/ACRE) • Prepared by'. Ke1'se~ IJ~arston Associates, Inc File name. Rancho Cuamonga_Incl_Oens_06_1 B_0] xls', Apt_Base A-81 APPENDIX F -TABLE 1 ESTIMATED DEVELOPMENT COSTS APARTMENT: BASE CASE: 90 APARTMENT UNITS (30 UNITSIACRE) AFFORDABLE HOUSING CASE STUDIES INCLU SIONARY HOUSING ANALYSIS RANCHO CUCAMONGA, CALIFORNfA ____ I. Land Cost II. Direct Costs ~ Site Work Cosls Podium Parking ` Building Shell Gosts' Total Direct Costs III. Indirect Costs General Indirect Costs " Permits & Fees Insurance Developer Fee Total Indirect Costs IV. Financing Costs Interest During Construction s Land Building Loan Origination Fees a Total Financing Costs 130,880 Sf Land Area $15 /Sf Land . $1,982,000 $20,000 /Unit 1,800,000 $5,OD0 /Unit -450,000 -991 ,000 130,680 Sf Land Area $12.00 /Sf Land $1,568,000 182 Spaces $20,000 !Space 3,640,000 116,862 Si GBA $125 /Sf GBA 14,608,000 10% Direct Costs 90 Units 90 Units -5% Direcl Costs $1,988,000 Land Cost $27,695,000 Cost $15,908,000 Loan Amount $2,656,000 V Total Development Costs 116,862 Sf GBA $250 /Sf GBA $29,683,000 Total Construction Costs 116,862 Sf GBA $240 /Sf GBA $27,695,000 ' Assumes that no prevailing wage requirements vdill be imposed on the development. ~ Total number of spaces equals 182, or 2.02 spaces/unit. e Average unit size equal to 1,129 square feet. GBA includes a 115°'o alloevance for non-rentable area. ° Includes architecture, engineering 8 consulting; taxes, legal & accounting; marketing; and soft cost contingency. Construction interest set at 7.0% on debt and 7.0% on equity. Land carrying costs are based on a 100% average outstanding balance; and an 18 month development period. Construction costs are based on a 65% average outstanding balance and an 18 month construction period. e Based on a 70% loan to value ratio. $1,988,000 $19,816,000 $5,223,000 7.0% Interest $209,000 7.0% Interest 1,890,OD0 3.5 Points 557,000 • • • Prepared 6y: Keyse; PAarston Associates, Inc. Fite name: Rancho_Cucamonca_Incl_Dens_05_10_07 xls; Apr_Base A~82 APPENDIX F -TABLE 2A STABILIZED NET OPERATING INCOME: MARKET RATE SCENARIO • APARTMENT: BASE CASE: 90 APARTMENT UNITS (30 UNITS/ACRE) AFFORDABLE HOUSING CASE STUDIES INCLUSIONARY HOUSING ANALYSIS RANCHO CUCAMONGA. CALIFORNIA I. Income Rent' One-Bedroom Units Zi unns L o~,soa rmonm aaau,zuv Two-Bedroom Units 36 Units @ $1,695 /Month 732,20D Three-Bedroom Units 27 Units @ $2,201 /Month 713,200 Gross Income $1,885,600 Vacancy & Collection Allowance 5% Gross Income (94,300) Effective Gross Income ~ .$1,791,300 II. Operating Expenses General Operating Expenses 90 Units @ $4,500 /Unit $405,000 Property Taxes ~ 90 Units @ $2,778 /Unit 250,000 Total Operating Expenses 90 Units @ ($7,280) /Unit ~ ($655,000) •III. Net Operating Income $1,136,300 'Market rent = $1.79/sf for One-Bedroom Units; $1.52/sf for Two-Bedroom Units; and $1.45/sf for Three-Bedroom Units. ' Based on the project value at a 5.0% capitalization rate and a 1.1 % tax rate. Preparetl ay: Keyser Narston Fssociates, Inc. Filename: Rancho_Cucamonga_Incl_Oens_O6_i6_07.x15; Apt_aase A-83 APPENDIX F -TABLE 28 STABILIZED NET OPERATING INCOME: APARTMENT: BASE CASE - . APARTMENT: BASE CASE: 90 APARTMENT UNITS (30 UNITSIACRE) ~ , AFFORDABLE HOUSING CASE STUDIES INCLUSIONARY HOUSING ANALYSIS RANCHO CUCAMONGA, CALIFORNIA _ - I. Income Market Rent ~ One-Bedroom Units 23 Units@ 51,~o`J nwoncn asrquuu Two-Bedroom Units 30 Unifs @ $1,695 /Month 610,100 Three-Bedroom Units 23 Units @ $2,201 /Month 607,500 Moderate Income ~ One-Bedroom Units 2 Units @ $1,258 /Month 30.200 - Two-Bedroom Units 3 Units @ 51,407 /Month 50,600 Three-Bedroom Units 2 Units @ $1,556 /Month 37,300 Verv-Low Income ~ One-Bedroom Units . 2 Units @ $547 /Month 13,100 Two-Bedroom Units 3 Units @ 5607 !Month 21,900 Three-Bedroom Units 2 Units @ 5668 /Month 16,000 Gross Income ~ $1,761,70D - Vacancy & Collection Allovdance. 5% Gross Income (88,100) Effective Gross Income $1,673,600 • II. Operatino Expenses General Operating Expenses 90 Units @ $4,500 /Unit $405,000 Property Taxes " 90 Units @ $2,542 /Unit 228,800 Total Operating Expenses 90 Units @ ($7,040) /Unit ($633,800) III. Net Operating Income ~ $1,039,800 ~ Market rent = 51.79/sf for One-Bedroom Units; $1.52/sf for Two-Bedroom Units; and $1.45/sf for Three-Bedroom~Units. Moderate income is based on 110% of the County median. 30% of income is allocated to housing related expenses. Utilities @ S46 for One-Bedroom Units; S59 for Two-Bedroom Units; and $72 for Three-Bedroom Units. Rents are the lesser of moderate income rents and market rents. a Very-low income is based on 50% of the County median. 30% of income is allocated fo housing related expenses. Utilities @ $46 for One-Bedroom Units; S59 for Two-Bedroom Units; and $72 for Three-Bedroom Units. • Prepared by: Y,eyser Marston Associates, Inc. Filename: Rancho_Cucamonga_InU_Dens_O6_1B_OZxIS; Apt_Base A ~84 APPENDIX F -TABLE 3 AND VALUE IMPACT ANALYSIS APARTMENT: BASE CASE: 90 APARTMENT UNITS (30 UNITS/ACRE) AFFORDABLE HOUSING CASE STUDIES INCLUSIONARY HOUSING ANALYSIS RANCHO CUCAMONGA, CALIFORNIA MARKET RATE SCENARIO Net Operating Income See APPENDIX F -TABLE 2A $1,136,300 Total Development Costs See APPENDIX F -TABLE 1 $29,683,000 APARTMENT: BASE CASE 7.5% Moderate Income & 7.5% Very-Low Income Net Operating Income See APPENDIX F -TABLE 2B $1,039,800 Total Development Costs See APPENDIX F -TABLE 1 $29,683,000 Nel Land Value Reduction _ $2,256,000 Decrease in Land Value 113% • • Prepared by: Keyser Marston Associates. Inc. File name: Rancho_Cucamonga_InU_Dens_O6_18_07.z1s; Apt_Base A-$5 APPENDIX G APARTMENT: FEASIBLE AFFORDABILITY MIX: 90 APARTMENT UNITS (30 UNITSIACRE) r • Prepared by: Keyser Marston Associates, Inc. Filename: Rancho Cucamonga_Incl_Dens_O6 18_07.xls; Apt_Feasible A-86 APPENDIX G -TABLE 1 ESTIMATED DEVELOPMENT COSTS APARTMENT: FEASIBLE AFFORDABILITY MIX: 90 APARTMENT UNITS (30 UNITSIACRE) AFFORDABLE HOUSING CASE STUDIES INCLUSIONARY HOUSING ANALYSIS RANCHO CUCAMONGA, CALIFORNIA I. Land Cost 130,680 Sf Land Area $15 /Sf Land $1,988,000 ' V,Site Work Costs 730,680 Sf Land Area $12.00 /Sf Land $1.568,000 , Podium Parking ~ 162 Spaces 520,000 /Space 3,640,000 Building Shell Costs' 116,862 Sf GBA 5125 /Sf GBA 14,608,000 519,816,000 Total Direct Costs III. Indirect Costs General Indirect Costs ` i0% Direct Costs $1,982,000 Permits & Fees 90 Units $20,000 /Unit 1,800,000 90 Units $5,000 IUnil 450,000 Insurance Developer Fee 5% Direct Costs 991,000 $5,223,000 Total Indirect Costs IV. Financino Costs Interest During Construction s Land $1,988,000 Land Cost 7.0% Interest $209,000 Building $27,695,000 Cost 7.0% Interest 1,890,000 Loan Origination Fees 6 $15,908,000 Loan Amount 3.5 Points 557,000 $2,656,000 Total Financing Costs V Total Development Costs 116,862 Sf GBA $25D /St GBA $29,683,000 Total Construction Costs 116,862 Bf GBA $240 /Sf GBA $27,695,000 Assumes that no prevailing wage requirements will be Imposed on the development. a Total number of spaces equals 182, or 2.02 spaces/unit. ' Average unit size equal to 1,129 square feet. GBA includes a 115% allowance for non-rentable area. ° Includes architecture, engineering & consulting; taxes, legal 8 accounting; marketing; and soft cost contingency. s Construction interest set al 7.0% on debt and 7.0% on equity. Land carrying costs are based on a 100% average outstanding balance; and an 18 month development period. Construction costs are based on a 65% average outstanding balance and an 18 month construction period. 6 Based on a 70% loan to value ratio. ' • • Pr?pared by: Keyser Marston Associates, Inc. Fil=name' Rancho_Cucamonga_Incl_Dens_O6_1 8_07 xis: Apl_Feasi~e87 APPENDIX G -TABLE 2A STABILIZED NET OPERATING INCOME: MARKET RATE SCENARIO PARTMENT: FEASIBLE AFFORDABILITY MIX: 90 APARTMENT UNITS (30 UNITS/ACRE) AFFORDABLE HOUSING CASE STUDIES _ INCLUSIONARY HOUSING ANALYSIS RANCHO CUCAMONGA, CALIFORNIA I. Income .+ ^ One-Bedroom Units 27 Units @ $1,359 .!Month $440,200 Two-Bedroom Units 36 Units @ $1,695 /Month 732,200 Three-Bedroom Units 27 Units @ $2,201 /Month 713,200 Gross Income $1,885,600 Vacancy & Collection Allowance 5% Gross Income (94,300) Effective Gross Income $1,791,300 II. Operating Expenses General Operating Expenses 90 Units @ $4,500 /Unit $405,000 Property Taxes s 90 Units @ $2,778 /Unit 25D,000 Total Operating Expenses 90 Units @ ($7,280) /Unit ($655,000) ~I. Net Operating Income $1,136,300 ' Market rent = 51.79/sf for One-Bedroom Units; $t52/sf for Two-Bedroom Units; and $1.45/sf for Three-Bedroom Units. s Based on the project value at a 5.0°/n capitalization rate and a 1.1°/o tax rate. `J Preparetl by: Keyser Marston Associates. Inc. File name: Rancho Cucamonga_Incl_Dens_O6 iB_O7.xls, Apc_Feasible~ $$ APPENDIX G -TABLE 2B STABILIZED NET OPERATING INCOME: APARTMENT: FEASIBLE AFFORDABILITY MIX • APARTMENT: FEASIBLE AFFORDABILITY MIX: 90 APARTMENT UNITS (30 UNITS/ACRE) AFFORDABLE HOUSING CASE STUDIES INCLUSIO NARY HOUSING ANALYSIS RANCHO CUCAMONGA, CALIFORNIA I. Income AAorLot Ronl ~ One-Bedroom Units 24 Units @ $1,359 /Month $391,300 Two-Bedroom Units 32 Units @ $1,695 /Month 650,800 Three-Bedroom Units 25 Units @ $2,201 /Month 660,300 Moderate Income z - ' One-Bedroom Units 3 Units @ $1,258 /Month 45,300 Two-Bedroom Units 4 Units @ $1,407 /Month 67,500 Three-Bedroom Units 2 Units @ 51,556 /Month 37,300 Gross Income $1,852,500 Vacancy & Collection Allowance 5% Gross Income ~ (92,600) Effective Gross Income ~ 51,759,900 II. Operating Expenses - • General Operating Expenses 90 Units @ $4,500 /Unit $405,000 Property Taxes a 90 Units @ $2,732 /Unit 245,900 Total Operating Expenses 90 Units @ ($7,230) /Unit (5650,900) III. Net Operating Income 51,109,000 '~ Market rent = $1.79/sf for One-Bedroom Units; $1.52/sffor Tvro-Bedroom Units; and $t45/sf for Three-Bedroom Units. = Moderate income is based on 110% of the County median. 30% of income is allocated to housing related expenses. Utilities @ 546 for One-Bedroom Units; $59 for Two-Bedroom Units; and $72 for Three-Bedroom Units. Rents are the lesser of moderate income rents and market rents. 3 Based on the project value at a 5.0% capitalization rate and a 1.1 % lax rate. Prepared ~y'. Keyser Marston Associates, Inc File name: Rancho Cucamonga_Ind Dens_OG_18_07.z1s', Apt_Feasib~-89 APPENDIX G -TABLE 3 AND VALUE IMPACT ANALYSIS PARTMENT: FEASIBLE AFFORDABILITY MIX: 90 APARTMENT UNITS (30 UNITSIACRE) AFFORDABLE HOUSING CASE STUDIES INCLUSIONARY HOUSING ANALYSIS - RANCHO CUCAMONGA, CALIFORNIA MARKET RATE SCENARIO Net Operating Income ~ See APPENDIX G -TABLE 2A ~ $1,136,300 Total Development Costs See APPENDIX G -TABLE 1 $29,683,000 Net Operating Income Total Development Costs Net Land Value Reduction °/ Decrease in Land Value 10% Moderate Income See APPENDIX G -TABLE 28 See APPENDIX G -TABLE 1 51,109,D00 529,683,000 $638,000 • Preparetl by: Y.eyser Marston Associates, Inc. Filename: Rancho_CUCamonga_Ind 0ens_O6 18_07.xls; Apt Feasible A-90 APPENDIX H APARTMENT: DENSITY BONUS: 122 APARTMENT UNITS (41 UNITS/ACRE) • • Proparetl by: Keyser Marston Associates, Inc. File name: Rancho_Cucamonga_Incl_Dens_06_i B_07.xis; Apt_Densny A ~91 APPENDIX H -TABLE 1 ESTIMATED DEVELOPMENT COSTS • APARTMENT: DENSITY BONUS: 122 APARTMENT UNITS (41 UNITS/ACRE) AFFORDABLE HOUSING CASE STUDIES INCLUSIO NARY HOUSING ANALYSIS RANCHO CUCAMONGA, CALIFORNIA I. Land Cost 130,680 Sf Land Area II. Direct COSts' Site Work Costs 130,680 Sf Land Area Podium Parking s 246 Spaces Building Shell Costs' 158,844 Si GBA Total Direc[ Costs III. Indirect Costs General Indirect Costs " - 10% Direct Costs Permits & Fees 122 Units Insurance ~ 122 Units Developer Fee 5% Direct Costs Total Indirect Costs IV. Financing Costs Interest During Construction s Land $1,988,000 Land Cost Building $36,823,000 Cost Loan Origination Fees ~ $21,629,000 Loan Amount Total Financing Costs V. $3,479,000 Total Development Costs 158,844 Si GBA $240 /Sf GBA $38,811,000 Total Construction Costs ~ 158,844 Sf GBA ~ 5230 !Sf GBA 536,823,000 ' Assumes that no prevailing v/age requirements will be imposed on the development. s Total number o(spaces equals 246, or 2.02 spaces/unit. 3 Average unit size equal to 1,132 square feet. GBA includes a 115% allowance for non-rentable area. ° Includes architecture, engineering & consulting; taxes, legal & accounting; marketing', and soft cost contingency, s Construction interest set at 7.0% on debt and 7.0°/n on equity. Land carrying costs are based on a 100% average outstanding balance; and an 18 month development period. Construction costs are based on a 65% average outstanding balance and an 18 month construction period. ~ Based on a 70% loan to value ratio. Prepared by: Keyser Marston Associates, Inc File name: Rancho_Cucamonga_Ind_Dens_06_18_07 xls; Apt_Densiy $15 /Sf Land $1 ,988,000 $12.00 /St Land $1,568,000 $20,000 /Space 4,920,000 $125 /Sf GBA 19,855,000 $26,343,000 $2,634,000 S20,000 /Unit 2,440,000 $5,000 /Unit 610,000 1,317,000 $7, 001,000 7.0% Interest $209,000 7.0% Interest 2,513,000 3.5 Points 757,000 • • A ~92 APPENDIX H -TABLE 2 TABILIZED NET OPERATING INCOME: APARTMENT: DENSITY BONUS APARTMENT: DENSITY BONUS: 122 APARTMENT UNITS (41 UNITS/ACRE) AFFORDABLE HOUSING CASE STUDIES INCLUSIONARY HOUSING ANALYSIS RANCHO CUCAMONGA, CALIFORNIA I. Income - - Market Rent' One-Bedroom Units 32 Units @ $1,359 /Month 552t,iUu Two-Bedroom Units 46 Units @ $1,695 /Month 935,500 Three-Bedroom Units 34 Units @ $2,201 /Month 898,000 Moderate Income ~ One-Bedroom Units - Units @ $1,258 /Month 0 Two-Bedroom Units - Units @ $1,407 /Month 0 Three-Bedroom Units - Units @ $1,556 !Month 0 Verv-Low Income' One-Bedroom Units 4 Units @ $547 /Month 26,2D0 Two-Bedroom Units 3 Units @ $607 /Month 21,900 Three-Bedroom Units 3 Units @ $668 /Month 24,000 Gross Income ~ $2,427,300 Vacancy & Collection Allowance 5% Gross-Income (121,400) . Effective Gross Income II. Operating Expenses General Operating Expenses 122 -Units @ $4,500 /Unit Property Taxes ° 122 Units @ $2,597 /Unit Total Operating Expenses .122 Units @ ($7,100) /Unit $2,305,900 $549,000 316,800 ($865,800) Ill. Net Operating Income $1,440,100 ' Market rent = $1.79Isf for One-Bedroom Units; 51.52/sf for Two-Bedroom Units; and $1.45lsf for Three-Bedroom Units. z Moderate income is based on 11 D% of the County median. 30% of income is allocated to housing related expenses. Utilities @ $46 for One-Bedroom Units; $59 for Two-Bedroom Units; and $72 for Three-Bedroom Units. Rents are the lesser of moderate income rents and market rents. 3 Very-low income is based on 50% of the County median. 30% of income is allocated to housing related expenses. Utilities @ 546 for One-Bedroom Units; $59 for Tvdo-Bedroom Units; and $72 for Three-Bedroom Units. P:eparen by: Keyser Marston Associates, Inc. File name: Rancho Cucamonga Ind_Dens Ofi_1 B_O7.xls; Apl_Density A ~93 APPENDIX H -TABLE 3 LAND VALUE IMPACT ANALYSIS • APARTMENT: DENSITY BONUS: '122 APARTMENT UNITS (41 UNITS/ACRE) AFFORDABLE HOUSING CASE STUDIES INCLUSIONARY HOUSING ANALYSIS RANCHO CUCAMONGA, CALIFORNIA MARKET RATE SCENARIO Net Operating Income See APPENDIX F -TABLE 2A $1,136,300 Total Development Costs See APPENDIX F -TABLE 1 $29,683,000 II. APARTMENT: DENSITY BONUS Net Operating Income Total Development Costs Net Land Value Reduction °/ Decrease in Land Value $1,067,000 C~ • Prepared 5y: Keyser Marston Associates, Inc. File name: Rancho_Cucamonga_Incl_Dens_O6_18_07.x1s: Apt_Density 11 % Very-Low Income (t3ase unlts7 See APPENDIX H -TABLE 2 $1,440,100 See APPENDIX H -TABLE 1 $38,811,000 A-94 Baldy View Chapter [3uilding Industry Associ;nion of Soulhcrn California, Inc. S7I I Monroe Court, Suite R Rancho Cucamonga, California 91730 ph 909.945.1584 fx 909.948.9631 March 14, 2~C)$ wwwbiabuild.com Mr. Jack Lam City of Rancho Cucamonga Rancho Cucamonga, CA RE: PROPOSED INCLUSIONARY ZONING ORDINANCE Dear Mr. Lam • I read with interest that the City of Rancho Cucamonga is considering an inclusionary zoning ordinance and would respectfully request that you forward this to the City Planning Commission staff to include our comments in their staff report presented to the city planning commission. Here are some preliminary comments from the BIA. I'm sure that as we get further into the process we will have more to say about this issue. As you know, California is currently facing a massive housing shortage statewide. Recent estimates indicate the Golden State suffers a chronic under-investment in residential construction, with a cumulative shortfall of more than 500,000 units since 1995, not to mention the current state of the economy. While we respect the City's efforts to seek out strategies for achieving greater affordable housing production, we feel that imposing a mandatory inclusionary zoning (IZ) ordinance is the wrong way to achieve this goal. We encourage the continuation of a collective and collaborative process that focuses on increasing housing supply at all levels through developer incentives and regulatory relief. We respectfully request that you consider a number of recent research highlighted below that clearly demonstrates the problems associated with implementing IZ in Rancho Cucamonga... In addition, we ask that you consider our overview of the adverse impact of IZ on secondary money market issues related to housing. As you will see, the proposed IZ ordinance will only hinder housing availability and affordability in Rancho Cucamonga and contribute to the overall housing shortage in California. (~ EXHIBIT' D lone 13~'i 95's ;uul the Colifornia Building Industry Association RESEARCH David Pau! Rosen & Associates (2003) A case in point (very similar to Rancho Cucamonga) is in the fall of 2002, the City of Los Angeles retained David Paul Rosen & Associates to prepare a study to assess the feasibility of implementing an IZ program in the city. That report was released in March 2003 and asserts that IZ is a feasible option for providing affordable housing in the City of Los Angeles. To date, this study has been used as guidance for policy makers in the debate surrounding IZ. Kosmont Partners (June 2003 & March 1004) The City of Los Angeles was presented two academic studies on IZ prepared by Kosmont Partners (Kosmont) by the Building Industry Association. The first Kosmont study is focused on the practice and theory ofIZ. The study focuses on six (6) IZ progams in jurisdictions within the State of California, four (4) programs in jurisdictions outside of California, and literature from both academic and professional trade journals that examines the impacts of such programs. • The first study provides insight into the guidelines of programs throughout the country and the adverse impacts these programs appear to have on affordable housing development and housing development in general. Findings from the first Kosmont study indicate that an IZ program in Los Angeles will have serious negative implications for the City's housing supply because it will NOT produce enough housing, much less affordable housing, to be anything other than a constraint on housing supply. Findings from the second Kosmont study indicate that the two most significant assertions in the Rosen Report are unsupportable. According the second study, the following assertions cannot be relied upon as guidance in the debate over the appropriateness of IZ in Los Angeles. • Its implication that IZ is not likely to affect housing production in Los Angeles is based merely on a visual examination of bar chart data from other jurisdictions rather than the sophisticated statistical analysis that would be required to adequately understand data that extends over several yeazs of observations. It omits any discussion of several critical aspects of how the real estate market and new housing development in Los Angeles would respond to the additional requirements of IZ u 2 A ~96 • • Its findings of feasibility for an IZ program are based on pro forma financial analyses that incorporate faulty assumptions for the costs and revenues associated with new housing development in Los Angeles. Reason Public Po&cy Institute (2004) Another study recently released (April 2004) by the Reason Public Policy Institute (RPPI) is also attached. This study provided four significant conclusions related to IZ including: • Inclusionary zoning is a negative housing trend • Inclusionary zoning does not lead to more affordable housing • Inclusionary zoning hinders availability and affordability of the housing market • Inclusionary zoning has negative fiscal effects • Conclusion One -Inclusionary zoning is a negative housing trend • Many California communities suffer a shortage of affordable housing. A popular response has been "Inclusionary zoning" ordinances that mandate developers sell a certain percentage of the homes they build at below market prices to make them affordable for people with lower incomes. Inclusionary zoning is spreading rapidly nationwide. For example, in California, between 1990 and 2003, the number of communities with Inclusionary zoning more than tripled - from 29 to 107 communities -meaning about 20 percent of California communities now have Inclusionary zoning. Conclusion Two -Inclusionary zoning does not lead to more affordable housing • After passing an Inclusionary zoning ordinance, the average city produces fewer than 15 affordable units per year. • In the San Francisco Bay Area, where Inclusionary zoning is most prevalent, Inclusionary zoning produce only 4 percent of the region's estimated affordable housing need, and it will take 100 years for Inclusionary zoning to meet the current 5-year housing need. • Correlusion Three -Inclusionary zoning hinders availability mTd affordability of the housing market A-97 • FEWER HOMES -Inclusionary zoning leads to fewer homes being built in a community- • the average city produced 214 homes the year before inclusionary zoning but only 147 the year after. Similarly, the 45 San Francisco Bay area cities with inclusionary zoning examined in the study are losing a total of about 2,300 new homes per year. INCREASED PRICES -Inclusionary zoning caused the price of new homes in the Median Bay Area city to increase by $22,000 to $44,000 per home. Conclusion Four -Inclusionary inning has negative frscal effects Selling new homes at below-market rates costs builders in the average city $45 Million. These increases costs inevitably are passed on to other homebuyers increasing the overall cost for a new home. By lowering the assessed value of homes and the resale value, inclusionary leads to substantial loss of state and local tax revenue. The total present value of lost state and local government revenue due to Bay Area inclusionary zoning ordinances is upwards of $553 million. Clearly, the aforementioned findings by RPPI demonstrate that IZ only contributes to California's • housing shortage and hinders hopes of more residents attaining the "American Dream" of homeownership. As such, we offer the following observations on how to tackle the affordable housing problem. How to Tackle Affordable Housing Problems • It is a fundamental law of economics that price controls cause shortages and don't help increase supply. A recent Harvard study found that 90% of the difference physical construction costs and the market price of new homes can be attributed to land use regulation. Most affordable housing is not new housing, but older homes. The only way to increase the supply of affordable older homes is to reduce restrictions on new home building and increase the overall supply of homes. INCLUSIONARY ZONING AND SECONDARY MONEY MARKET ISSUES In addition, we are concerned about how inclusionary zoning impacts the secondary money market. We are attempting to get clarification from HUD, Freddie Mac and Fannie Mae because some of the major lenders have indicated that inclusionary housing units are not marketable because of the deed • restrictions. Overall, the following restrictions (see attachment 1) are cause for concern. A ~98 Freddie Mac and Fannie Mae policy of Inclusionary Zoning The affordability provisions for inclusionary units shall apply in perpetuity from the date of occupancy, which shall be the date the city of Rancho Cucamonga performs final inspection for building permits is not acceptable to Fannie Mae or Freddie Mac BIA, BALDY VIEW CHAPTER'S PERSPECTTVE There are clear legal issues related to this problematic policy. Inclusionary zoning is vulnerable to two major legal challenges, each emanating from a right provided under an amendment to the U.S. Constitution. The first is the guarantee of fair compensation for publicly appropriated property, outlined in the Fifth Amendment. The second, set fourth in the Fifth and Fourteenth Amendments, is the right to fair and equal protection under the law. • Before making any decisions, policy makers who are considering adopting IZ must clearly understand the extent to which IZ will have an impact of feasibility of residential development projects. Financial feasibility is the primary factor, which determines whether a project is undertaken. Although it is clear that a purely incentive-based inclusionary zoning ordinance would face no significant legal risk, not being a regulation as such. An ordinance requiring the participation of developers receiving incentives would be found to advance a legitimate public interest in attempting to improve the availability of affordable housing; however, finding some measure of the economic impact of an IZ ordinance on developers is important because this valuation is an important determinant of legal risk and also gives and indication of the level of incentive necessary to induce participation in a voluntary program. Ifa project is not financially feasible it will not be built. It is that simple. While it might be tempting to try and solve the community wide problem of affordable housing on the backs of new homebuyers and while it will allow elected officials to say they are doing something about affordable housing, IZ is not only inequitable, but also an inefficient means of providing affordable housing. Rather than seeking to put up barriers to housing production and placing the burden of subsidizing affordable housing on the backs of one small segment of the populations-new homebuyers, the City should be endeavoring to stimulate housing development and create an incentive based system for producing affordable units. • A-99 An IZ ordinance has superficial attractiveness because it appears to offer an expedient means of providing affordable housing, however such an ordinance will actually be counterproductive to the City's goals of improving housing affordability and will discourage housing production at all income levels. It fails to acknowledge that rents and home costs will escalate across the board. It fails to report that middle-income families, the strength of the city, will be severely hurt. Again, we look forward to working with the City to find a solution to the affordable housing needs. Sincerely, ~~ ~~ Frank Williams Chief Executive Officer cc: Members of the Planning Commission Mayor & City Council Attachments: 1. Overview of Freddie Mac's and Fannie Mae's policy on Inclusionary Zoning 2. Review of the David P. Rosen & Associates Report on Inclusionary Housing in the City of Los Angeles 3. Inclusionary Housing and its Impact on Housing and Land Markets, by David Rosen can be • aCCCSSed at htto://www.lacitv.ore/]ahd/inclusio.htm 4. Inclusionary Housing Study, by Kosmont Partners 5. Housing Supply and Affordability: Do Affordable Housing Mandates Work? By Reason Public Policy Institute full study - http://www.rppi.org/ps318.pdf • A100 • RESOLUTION NO. 08-12 A RESOLUTION OF THE PLANNING COMMISSION OF THE CITY OF RANCHO CUCAMONGA, CALIFORNIA, RECOMMENDING APPROVAL OF DEVELOPMENT CODE AMENDMENT DRC2008-00074, ADDING CHAPTER 17.42 TO THE RANCHO CUCAMONGA DEVELOPMENT CODE PERTAINING TO INCLUSIONARY HOUSING REQUIREMENTS FOR CERTAIN RESIDENTIAL PROJECTS, AND MAKING FINDINGS, IN SUPPORT THEREOF. A. Recitals. 1. The City of Rancho Cucamonga filed an application for Development Code Amendment No. DRC2008-00074, as described in the title of this Resolution. Hereinafter in this Resolution, the subject Development Code Amendment is referred to as "the applicatioh." 2. On the 26th day of March 2008, the Planning Commission of the City of Rancho Cucamonga conducted a duly noticed public hearing on the application and concluded said hearing on that date. 3. All legal prerequisites prior to the adoption df this Resolution have occurred. 4. Based on the State Housing Production Requirements, the RedevelopmentAgency has a responsibility of providing approximately 2,755 units of affordable housing units. 5. The City of Rancho Cucamonga has been allocated a total of 1,282 housing units by the Southern Association of Governments Regional Housing Need Allocation Plan from January 1, 2006 to June 30, 2014, which 778 of the 1,282 housing units are required to be very low to moderate income designations. 6. The Redevelopment Agency has expended or pledged more than millions of dollars from its housing set-aside fund in' order to provide affordable units. The Redevelopment Agency's resources are nearing capacity as the Project Area and tax increment reach the limits of the Redevelopment Plan.- 7. Unlike the early 1980s when the City was seeing tremendous moderately priced housing growth, the majority of the units that are being constructed today are not considered to be affordable to low or moderate income families; thus, creating a need for affordable housing. 8. There are limited resources remaining to provide affordable housing (available land and finances) in the City. B. Resolution. NOW, THEREFORE, it is hereby found, determined, and resolved by the Planning Commission of the City of Rancho Cucamonga as follows: 1. This Commission hereby specifically finds that all of the facts set forth in the Recitals, Part A, of this Resolution are true and correct. • 2. Based upon the substantial evidence presented to this Commission during the above- referenced public hearing on March 26, 2008, including written and oral staff reports, together with public testimony, this Commission hereby specifically finds as follows: A101 PLANNING COMMISSION RESOLUTION NO. 08-12 DCA DRC2008-00074 -CITY OF RANCHO CUCAMONGA March 26, 2008 Page 2 The application applies to properties located within the City; and The proposed amendment will not have a significant impact on the environment. 3. Based upon the substantial evidence presented to this Commission during the above- referenced public hearing and upon the specific findings of facts set forth in paragraphs 1 and 2 above, this Commission hereby finds and concludes as follows: a. The proposal will further Programs 9 and 10 of the Redevelopment Agency's Housing Plan of the Housing Element in the General Plan, which includes goals for investigating the feasibility of an affordable housing overlay zone and a mixed use overlay zone in order to create new opportunities for affordable housing; and b. The proposed Inclusionary Workforce Housing Ordinance would provide the opportunity to create ajob/housing balance in the City; and c. The proposed amendment will not be detrimental 4o the public health, safety, or welfare or materially injurious to properties or improvements in the vicinity; and The proposed amendment is in conformance with the General Plan. • 4. Pursuant to the California Environmental QualityAct ("CEQA")and the City's local CEQA Guidelines, the City staff prepared an Initial Study of the potential environmental effects of the • project. Based on the findings contained in that Initial Study, City staff determined that there was no substantial evidence that the project would have a significant effect on the environment. Based on that determination, a Negative Declaration was prepared. Thereafter, the City staff provided public notice of the public comment period and of the intent to adopt the Negative Declaration. a. The Planning Commission has reviewed the Negative Declaration and all comments received regarding the Negative Declaration and, based on the whole record before it, finds: (i) that the Negative Declaration was prepared in compliance with CEQA; and (ii) that there is no substantial evidence that the project will have a significant effect on the environment. The Planning Commission further finds that the Negative Declaration reflects the independentjudgment and analysis of the Planning Commission. Based on these findings, the Planning Commission hereby adopts the Negative Declaration. b. The custodian of records for the Initial Study, Negative Declaration and all other materials which constitute the record of proceedings upon which the Planning Commission's decision is based is the Planning Director of the City of Rancho Cucamonga. Those documents are available for public review in the Planning Department of the City of Rancho Cucamonga located at 10500 Civic Center Drive, Rancho Cucamonga, California 91730, telephone (909) 477-2750. 5. Based upon the findings and conclusions set forth in paragraphs 1, 2, 3, and 4 above, this Commission hereby recommends approval of Development Code Amendment No. DRC2008-00074 by recommending adoption of the attached City Council Ordinance. 6. The Secretary to this Commission shall certify to the adoption of this Resolution. • APPROVED AND ADOPTED THIS 26TH DAY OF MARCH 2008. A102 u • PLANNING COMMISSION RESOLUTION NO. OS-12 DCA DRC2008-00074 -CITY OF RANCHO CUCAMONGA March 26, 2008 Page 3 PLANNING COMMISSION OF THE CITY OF RANCHO CUCAMONGA BY: ATTEST: Pam Stewart, Chairman James R. Troyer, AICP, Secretary 1, James R. Troyer, AICP, Secretary of the Planning Commission ofthe City of Rancho Cucamonga, do hereby certify that the foregoing Resolution was duly and regularly introduced, passed, and adopted by the Planning Commission of the City of Rancho Cucamonga, at a regular meeting of the Planning Commission held on the 26th day of March, by the following vote-to-wit: AYES: COMMISSIONERS: NOES: COMMISSIONERS: ABSENT: COMMISSIONERS: A103 ORDINANCE NO. • AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF RANCHO CUCAMONGA ADDING TO THE CITY OF RANCHO CUCAMONGA DEVELOPMENT CODE CHAPTER 17.42 (DRC2008-00074) PERTAINING TO INCLUSIONARY HOUSING REQUIREMENTS FOR CERTAIN RESIDENTIAL PROJECTS AND ADOPTING A NEGATIVE DECLARATION OF ENVIRONMENTAL IMPACTS. A. Recitals. 1. On March 26, 2008, the Planning Commission of the City of Rancho Cucamonga conducted a duly noticed public hearing with respect to the above referenced Development Code Amendment and, following the conclusion thereof, adopted its Resolution No. 08-12, recommending that the City Council of the City of Rancho Cucamonga adopt said Development Code Amendment adding Chapter 17.42 to the Development Code and the related Negative Declaration of environmental impacts. Hereinafter the subject Development Code Amendment is referred to as the "application," 2. On ,the City Council of the City of Rancho Cucamonga conducted a duly noticed public hearing on the proposed Development Code Amendment. 3. Based on the State Housing Production Requirements, the Redevelopment Agency has a responsibility of providing approximately 2,755 units of affordable housing units in the • Project Area 4. The City of Rancho Cucamonga has been allocated a total of 1,282 housing units by the Southern California Association of Governments Regional Housing Needs Allocation Plan from January 1, 2006 to June 30, 2014, which 778 of the 1,282 housing units are required to be very low to moderate income designations 5. The Redevelopment Agency has expended or pledged millions of dollars from its housing set-aside fund in order to provide the affordable units. The Redevelopment Agency's resources are nearing capacity as the Project Area and tax increment reach the limits of the Redevelopment Plan 6. Unlike the early 1980s when the City was seeing tremendous moderately priced housing growth, the majority of the units that are being constructed today are not considered to be affordable to low or moderate income families; thus, creating a need for additional affordable housing opportunities 7. 'There are limited resources remaining to provide affordable housing (available land and finances) in the City. 8. All legal prerequisites prior to the adoption of this Ordinance have occurred. 6. Ordinance. The City Council of the City of Rancho Cucamonga does ordain as follows: A104 CITY COUNCIL ORDINANCE NO. DCA DRC2008-00074 **** 2008 • Page 2 SECTION 1: This City Council hereby specifically finds that all of the facts set forth in the Recitals, Part A, of this Ordinance are true and correct. - SECTION 2: Based upon substantial evidence presented to the City Council during the above-referenced public hearing on , 2008, including written and oral staff reports, together with public testimony, the City Council hereby specifically finds as follows: 1. The proposal will further Programs 9 and 10 of the Redevelopment Agency's Housing Plan of the Housing Element in the General Plan, which includes goals for investigating the feasibility of an affordable housing overlay zone and a mixed use overlay zone in order to create new opportunities for affordable housing; and 2. The proposed Inclusionary Workforce Housing Ordinance would provide the. opportunity to create ajob/housing balance; and 3. The proposed amendment will not be detrimental to the public health, safety, or welfare or materially injurious to properties or improvements in the vicinity; and 4. The proposed amendment is in conformance with the General Plan. SECTION 3: Based upon the facts and information contained in the proposed Negative Declaration, together with all written and oral reports included for the environmental assessment • for the application, the City Council finds that there is no substantial evidence that the project will have a significant effect upon the environmental and adopts a Negative Declaration attached hereto, and incorporated herein by this reference, based upon the findings as follows: 1. Pursuant to the California Environmental Quality Act (CEQA), City staff has prepared and Initial Study of the potential environmental effects of the project. Based on the findings contained in the Initial Study, City staff determined that there would be no substantial evidence that the project would have a significant effect on the environment. Based on that determination, a Negative Declaration was prepared. Thereafter, City staff provided public notice of the public comment period and of the intent to adopt the Negative Declaration; and 2. The City Council has reviewed the Negative Declaration and all comments received regard the Negative Declaration and, based on the whole record before it, finds: (i) that the Negative Declaration was prepared in compliance with CEQA; and (ii) there is no substantial evidence that the project will have a significant effect on the environment. The City Council further finds that the Negative Declaration reflects the independent judgment and analysis of the City Council. Based on these finding, the City Council hereby adopts the Negative Declaration. SECTION 4: Anew Chapter 17.42, entitled Inclusionary Housing Requirements, is hereby added to Title 17 (Development Code) of the Rancho Cucamonga Municipal Code to read as follows: Chapter 17.42 INCLUSIONARY HOUSING REQUIREMENTS 17.42.010. Purpose 17.42.020. Definitions A105 CITY COUNCIL ORDINANCE NO. DCA DRC2008-00074 • *"** 2008 Page 3 17.42.030. Additional Regulations 17.42.040. Applicability arid Inclusionary Unit Requirements 17:42.050. Exempt projects 17.42.060. Alternatives to Units within Project 17.42.070. Housing Plan and Housing Agreement Required 17.42.080. Standards 17.42.090. Takings Determination 17.42.100. Enforcement 17.42.110. Inclusionary Housing Trust Fund 17.42.120. Administrative Fees 17.42.010. Purpose This Chapter establishes standards and procedures to encourage the development of housing that is affordable to a range of households with varying income levels. The purpose of this Chapter is to encourage the development and availability of affordable housing by requiring the inclusion of affordable housing units within developments that involve an increase in the density otherwise available by City and State law; a change from a zoning regulation that does not permit residential uses to one that does permit residential uses; or the conversion of rental units to condominium ownership. • 17.42.020. Definitions As used in this Chapter, the following terms shall have the following meanings: "Adjusted for Household Size Appropriate for the Unit" means a household of one person in the case of a studio unit, two persons in the case of aone-bedroom unit, three persons in the case of atwo-bedroom unit, four persons in the case of athree-bedroom unit, and five persons in the case of afour-bedroom unit. "Affordable Housing Cost" means the total housing costs paid by a qualifying household, which shall not exceed the fraction of gross income specified, as follows, in accordance with Sections 50052.5 and 50053 of the Health & Safety Code: A. Very low-income households. Thirty percent of the income of a household earning 50 percent of the San Bernardino County median income adjusted for family size appropriate for the unit. B. Low-income households. Thirty percent of the income of a household earning 70 percent of the San Bernardino County median income for for-sale units, and 30 percent of the income of a household earning 60 percent of the San Bernardino County median income for rental units, adjusted in either case for family size appropriate for the unit. C. Moderate income households. Thirty-five percent of the income of a household earning 110 percent of the San Bernardino County median income for for-sale units, and 30 • percent of the income of a household earning 110 percent of the San Bernardino County median income for rental units, adjusted in either case for family size appropriate for the unit. A106 CITY COUNCIL ORDINANCE NO. DCA DRC2008-00074 **** 2008 • Page 4 D. In the event of a conflict between the fractions specified in this definition and those found in Sections 50052.5 and 50053 of the Health & Safety Code, the fractions specified by State law shall control. "Developer" means any association, corporation, firm, joint venture, partnership, person, or any entity or combination of entities, which seeks City approval for all or part of a residential project. "inclusionary Unit" means a dwelling unit that will be offered for sale or rent to low- or moderate-income households, at an affordable housing cost, in compliance with this Chapter. "Low-Income Households" means "lower income households" as that term is defined by Section 50079.5 of the Health & Safety Code. "Low-Income Units, Moderate-Income Units, and Very Low-Income Units" means inclusionary units restricted to occupancy by low, moderate, or very low-income households, respectively, at an affordable housing cost. "Market Rate Units" means dwelling units in a residential project that are not inclusionary units. "Moderate-Income Households" means "persons and families of low or moderate • income" as that term is defined by Section 50093 of the Health & Safety Code. "Planning Director" means the Planning Director of the City of Rancho Cucamonga or his or her designee. "Regulatory Agreement" means an agreement entered into between the Rancho Cucamonga Redevelopment Agency and a developer by which the developer covenants to keep certain housing units at an affordable housing cost for a specified period of time. "Regulations" means the regulations adopted by the Council in compliance with Section 17.42.020(A) for the implementation and enforcement of the provisions of this Chapter. "Residential project" means any of the following: A. A subdivision resulting in the creation of 5 or more residential lots or residential units; or B. The new construction of a project consisting of 5 or more multi-family units or single-room occupancy units; or C. The new construction of 5 or more separate houses or dwelling units. D. The conversion of 5 or more rental units to condominium ownership. "Total Housing Costs" the total monthly or annual recurring expenses required of a • household to obtain shelter. For a rental unit, total housing costs shall include the monthly rent payment and utilities. For ari ownership unit, total housing costs shall include the mortgage A107 CITY COUNCIL ORDINANCE NO. DCA DRC2008-00074 • "" 2008 Page 5 payment (principal and interest), homeowners' association dues, mortgage insurance, taxes, utilities, and any other related assessments. "Very Low-Income Households" means "very low income households" as that term is defined by Section 50105 of the Health & Safety Code. 17.42.030. Additional Regulations The Council may by resolution establish additional regulations for the implementation of this Chapter. 17.42.040. Applicability and Inclusionary Unit Requirements A. The requirements of this Chapter shall apply to any residential project proposed in connection with an application to do any of the following: 1. Increase the permitted residential density of the subject property above the density allowed under City and State law at the time of the application. 2. Increase the permitted percentage of residential development allowed for a mixed-use development above the percentage under City and State law at the time of the • application. 3. Convert commercial or industrial land to residential uses; including, but not limited to, the conversion of a hotel to residential use. 4. Convert rental units to condominium ownership. B. Units for sale. If the residential project consists of units for sale, then a minimum of 15-percent of the total number of units in the project shall be sold to moderate-income households. C. Rental units. If the residential project consists of rental units, then a minimum of 7.5-percent of the units shall be rented to low or very low-income households and 7.5-percent of the units shall be rented to moderate-income households. , D. Allowable credits. The inclusionary unit requirements of this Section may be reduced as follows. 1. Very low-income units in lieu of low-income units. If very low-income units are provided in lieu of the required low-income units, then the project shall receive a credit of 1.5 affordable units for each unit actually provided. 2. Very low-income units in lieu of moderate-income units. If very low- income units are provided in lieu of required moderate-income units, then the project shall receive a credit of two units for each unit actually provided. A108 CITY COUNCIL ORDINANCE NO. DCA DRC2008-00074 **** 2008 Page 6 • 3. Low-income units in lieu of moderate-income units. If low-income units are provided in lieu of required moderate-income units, then the project shall receive a credit of 1.5 units for each unit actually provided. E. Rounding of quantities in calculations. In calculating the required number.of inclusionary units, fractional units of 0.75 or above shall be rounded-up to a whole unit if the residential project consists of 5 to 20 units; and fractional units of 0.50 or above shall be rounded-up to a whole unit if the project consists of 21 units or more. F. Displacement of existing inclusionary units. Notwithstanding any other provision of this Chapter, any project subject to this Chapter that results in the displacement of very low, low, and/or moderate income household(s) shall be required to provide on-site inclusionary units as required by this Chapter. G. The requirements of this Chapter shall apply to all developers and their agents, successors-in-interest, and assigns proposing a residential project within the scope of Paragraph A of this Section. All inclusionary units required by this Chapter shall be sold or rented in compliance with this Chapter and the City's regulations for the implementation of this Chapter. 17.42.050. Exempt projects The following are exempt from the requirements of this Chapter. • A. Applications deemed complete as of the effective date of the ordinance. A residential project for which a development application has been deemed complete. B. Development Agreements. A residential project that is the subject of a development agreement that expressly provides for an exclusion to this Chapter or provides for a different amount of inclusionary units from that specified by this Chapter. C. Project with Regulatory Agreement. A residential project for which the Rancho Cucamonga Redevelopment Agency has executed a Regulatory Agreement, provided that the Regulatory Agreement is effective at the time the residential project would otherwise be required to comply with the requirements of this Chapter, and there is no uncured breach of the Regulatory Agreement before issuance of a Certificate of Occupancy for the project. 17.42.060. Alternatives to Units within Project The primary means of complying with the inclusionary requirements of this Chapter shall be the provision of on-site inclusionary units in accordance with Section 17.42.040. A developer may only satisfy the requirements of this Chapter by means of an alternative to on-site inclusionary units in accordance with the requirements and procedures of this Section. A. Off-site units. Upon application by the developer and at the discretion of the City Council, the developer may satisfy the inclusionary unit requirements for the project, in whole or in part, by any combination of the following means: A109 CITY COUNCIL ORDINANCE NO. DCA DRC2008-00074 **** 2008 • Page 7 1. Constructing or substantially rehabilitating the required number of units on a site other than that of the affected residential project. For purposes of providing off-site units, substantially rehabilitating means rehabilitating a dwelling unit that has substantial building and other code violations, and has been vacant for at least 90 days, such that the unit is returned to the City's housing supply as decent, safe, and sanitary housing, and the cost ,of the work exceeds twenty-five percent of the market value of-the unit after rehabilitation. 2. Purchasing equivalent affordable housing covenants for units in existing multi-family projects. All such units shall be: (i) reasonably dispersed throughout the multi- family project; (ii) located in an area or areas of the City as approved by the Planning Director; (iii) proportional in number of bedrooms, and location, to the market rate units included in the developer's residential project; and (iv) comparable to the market rate units included in the residential project in terms of design, materials, finished quality, and appearance. B. In lieu fee. 1. Twenty or fewer units. In the case of a residential project containing between five (5) and twenty (20) residential lots or residential units, the developer may elect to satisfy the inclusionary unit requirements for the project, in whole or in part, by payment of a fee in lieu of constructing some or all of the required units. • 2. More than twenty units. In the case of a residential project comprised of more than 20 residential lots or residential units, the developer may apply to pay a fee in lieu of constructing some or all of the required units, and such application shall be subject to the review and approval of the City Council, which may grant such the developer's request if substantial evidence supports a finding that the cost of providing inclusionary units on-site would substantially exceed the amount of the applicable in-lieu fee. 3. Calculation of fee. The amount of the fees allowed by this Section shall be calculated in accordance with the methodology set forth in the regulations adopted for the implementation of this Chapter. 4. Timing of payment. The developer shall pay any in-lieu fees allowed by this Section in full before issuance of a Building Permit for any portion of the residential project, including any non-residential portions of a mixed-use development. 5. Housing Trust Fund. Fees collected in compliance with this Section shall be deposited in the Inclusionary Housing Trust Fund. 17.42.070. Housing Plan and Housing Agreement Required A. Submittal and execution. The developer shall comply with the following requirements at the times and in compliance with the standards and procedures in the City's regulations for the implementation of this Chapter. ® 1. Inclusionary Housing Plan. The developer shall submit an Inclusionary Housing Plan, in a form specified by the Planning Director, detailing how the provisions of this Chapter will be implemented for the proposed residential project. If. the Inclusionary Housing Plan includes alternatives to on-site units that require the approval of the City Council, then the A110 CITY COUNCIL ORDINANCE NO. DCA DRC2008-00074 *'"', 2008 • Page 8 Inclusionary Housing Plan shall be subject to the review and approval of the City Council. All other Inclusionary Housing Plans shall be subject to the approval of the Planning Director, subject to appeal to the City Council. Any such appeal shall be filed within fifteen (15) days of the Planning Director's decision in accordance with Section 17.02.080. 2. Housing Agreement. The developer shall execute and cause to be recorded an Inclusionary Housing Agreement. The Inclusionary Housing Agreement shall be a legally binding agreement between the developer and the City, in a form and substance satisfactory to the Planning Director and the City Attorney, and containing those provisions necessary to ensure that the requirements of-this Chapter are satisfied, whether through the provision of inclusionary units or through an approved alternative method. B. Discretionary approvals. No discretionary approval shall be issued for a residential project subject to this Chapter until the developer has submitted an Inclusionary Housing Plan. C. Issuance of Building Permit. No Building Permit shall be issued for a residential project subject to this Chapter unless the Planning Director has approved the Inclusionary Housing Plan, and any required Inclusionary Housing Agreement has been recorded. D. Issuance of Certificate of Occupancy. A Certificate of Occupancy shall not be issued for a residential project subject to this Chapter unless the approved Inclusionary Housing • Plan has been fully implemented. 17.42.080. Standards A. Location within project, relationship to non-inclusionary units. All inclusionary units shall be: 1. Reasonably dispersed throughout the residential project; 2. Proportional, in number of bedrooms, and location, to the market rate units; 3. Comparable to the market rate units included in the residential project in terms of design, materials, finished quality, and appearance; and 4. Permitted the same access to project amenities and recreational facilities, as are market rate units. B. Timing of construction. All inclusionary units in a residential project shall be constructed concurrent with, or before the construction of the market rate units. If the City approves a phased project, a proportional share of the required inclusionary units shall be provided within each phase of the residential project. A111 CITY COUNCIL ORDINANCE NO. DCA DRC2008-00074 **** 2008 • Page 9 C. Units for sale. 1. Time limit for inclusionary restrictions. A unit for sale shall be restricted to the target income level group at the applicable affordable housing cost for a minimum of 55 years. 2. Certification of purchasers. The developer and all subsequent owners of an inclusionary unit offered for sale shall certify, on a form provided by the City, the income of the purchaser. 3. Resale price control. In order to maintain the availability of inclusionary units required by this Chapter, the resale price of an owner occupied inclusionary unit shall be limited to the lesser of the fair market value of the unit as established by a licensed real estate agent based upon three comparable properties or the restricted. resale price. For these purposes, the restricted resale price shall be the greater of .either the applicable Affordable Housing Cost or an amount equal to the sum of: a. The purchase price; b. A percentage increase in the purchase price equal to three (3) percent of any increase in the Consumer Price Index; and c. The adjusted amount of any capital improvements for which a building permit has been issued by the City of Rancho Cucamonga and a certification of completion has been filed, or other improvements which adds assessed value to the unit; professional d. Any applicable transaction fee charged by a real estate e. If the occupant has allowed the unit to deteriorate due to deferred maintenance, the restricted retail price shall be discounted in an amount equal to the costs necessary to bring the unit into conformity with Title 15 or Title 16 of this Code. 4. Inheritance of inclusionary units. Upon the death of an owner of an owner-occupied inclusionary unit, title in the property may transfer to the surviving joint tenant without respect to the income-eligibility of the household. Upon the death of a sole owner or of all owners of an inclusionary unit and the inheritance of the property by one or more non-income eligible children or step-children of the decedent, the property shall be sold to an income eligible household within one year of the time when the decedent's estate is settled. Inheritance of an inclusionary unit by any other non-income eligible person or persons shall require the sale of the property to an income eligible person as soon as is feasible, but not more than 180 days after the decedent's estate is settled. 5. Forfeiture. If an inclusionary unit for sale is sold for an amount in excess of the resale price controls required by this Section, the buyer and the seller shall be jointly and severally liable to the City for the entire purchase price of the unit. Recovered funds shall be • deposited into the Inclusionary Housing Funds. Notwithstanding the foregoing, it shall be within the discretion of the City Manager to allow the buyer and seller to cure any violation of the resale price controls within 180 days. , A112 CITY COUNCIL ORDINANCE NO. DCA DRC2008-00074 **** 2008 • Page 10 D. Rental units. 1. Time limit for inclusionary restrictions. A rental unit shall remain restricted to the target income level group at the applicable affordable housing cost in perpetuity. 2. Certification of renters. The owner of any rental inclusionary units shall certify, on a form provided by the City, the income of the tenant at the time of the initial rental and annually thereafter. 3. Forfeiture. Any lessor who leases an inclusionary unit in violation of this Chapter shall be required to forfeit to the City all money so obtained. Recovered funds shall be deposited into the Inclusionary Housing Funds. E. The Planning Director may require the execution and recording of whatever documents required to ensure enforcement of this Section; including but not limited to promissory notes, deeds of trust, resale restrictions, rights of first refusal, options to purchase, and/or other documents, which shall be recorded against all inclusionary units. General Prohibitions. 1. No person shall sell or rent an inclusionary unit at a price or rent in excess of the maximum amount allowed by any restriction placed on the unit in accordance with • this Chapter. 2. No person shall sell or rent an inclusionary unit to a person or persons that do not meet the income restrictions placed on the unit in accordance with this Chapter. 3. No person shall provide false or materially incomplete information to the City or to a seller or lessor of an inclusionary unit to obtain occupancy of housing for which that person is not eligible. G. Principal Residency Requirement. - 1. The owner or lessee of an inclusionary unit shall reside in the unit for not less than ten out of every twelve months. Notwithstanding this requirement, the owner or lessee may live elsewhere for a period up to 6 months every five (5) years on account of hardships including but not limited to medical reasons, the need to assist family member in crisis or medical need, and relocation for employment purposes. 2.. No owner or lessee of an inclusionary unit shall lease or sublease, as applicable, an inclusionary unit without the prior permission of the Planning Director. 17.42.090. Takings Determination A. Determination of a taking of property without just compensation. In accordance with the procedures provided by this Section, a developer may request a determination as to • whether the requirements of this Chapter, taken together with the inclusionary incentives as applied to the residential project, would constitute a taking of property without just compensation under the California or Federal Constitutions. A113 CITY COUNCIL ORDINANCE NO. DCA DRC2008-00074 **** 2008 Page 11 1. If an Inclusionary Housing Plan is subject to the approval of the Planning Director, the developer may request the Planning Director to make a takings determination within fifteen (15) days of the decision by the Planning Director to approve or disapprove the Inclusionary Housing Plan. The developer may file an appeal of the Planning Director's takings determination within fifteen (15) calendar days after the date of the decision in compliance with Section 17.02.080. 2. If an Inclusionary Housing Plan is subject to the approval of the City Council, the developer may request the City Council to make a takings determination at the time it acts to approve or disapprove the Inclusionary Housing Plan. ` B. Presumption of facts. In making the taking recommendation or determination, the Planning Director or City Council, as appropriate, shall presume each of the following facts: 1. Application of requirements. Application of the inclusionary housing requirement to the residential project; 2. Incentives. Application and utilization of all density bonuses and incentives available under State and local law; 3. Product type. Utilization of the most cost-efficient product type for the • inclusionary units that would meet the standards of this Chapter; and 4. External funding. The reasonable availability of external funding. C. Modifications to reduce obligations. If it is determined that the application of the provisions of this Chapter would be a taking, the Inclusionary Housing Plan shall be modified to reduce the obligations in the inclusionary housing component to the extent, and only to the extent necessary, to avoid a taking. If it is determined no taking would occur though application of this Chapter to the residential project, the requirements of this Chapter remain applicable. 17.42.100. Enforcement D. Any violation of this Chapter constitutes a misdemeanor. E. Forfeiture of funds. Any individual who sells or rents an inclusionary unit in violation of this Chapter shall be required to forfeit all money so obtained. Recovered funds shall be deposited into the Inclusionary Housing Trust Fund. F. Legal actions. The City may institute any appropriate legal actions or proceedings necessary to ensure compliance with this Chapter, including actions: 1. To disapprove, revoke, or suspend any permit, including a Building Permit, Certificate of Occupancy, or discretionary approval; and 2. For injunctive relief or damages. • A114 CITY COUNCIL ORDINANCE NO. DCA DRC2008-00074 **** 2008 Page 12 G. Recovery of costs. In any action to enforce this Chapter, dr an Inclusionary Housing Agreement recorded hereunder, the City shall be entitled to recover its reasonable attorney's fees and costs. 17.42.110. Inclusionary Housing Trust Fund There is hereby established a separate fund of the City, to be known as the Inclusionary Housing Trust Fund. All monies collected in compliance with Sections 17.42.060(8) (In lieu fee), 17.42.080(C)(5), 17.42.080(D)(3) (Forfeiture), or 17.42.100 (Enforcement), above, shall be deposited in the Inclusionary Housing Trust Fund. 17.42.120. Administrative Fees The Council may by resolution establish reasonable fees and deposits for the administration of this Chapter." SECTION 5: On or before the second, fourth, and sixth anniversaries of the effective date of this Ordinance, the Planning Director shall prepare and present to the City Council an evaluation of the effectiveness of Chapter 17.42, or any successor provisions, during the preceding (2) years and any recommendations for changes. SECTION 6: If any section, subsection, sentence, clause, phrase, or word of this • Ordinance is, for any reason, deemed or held to be invalid or unconstitutional by the decision of any court of competent jurisdiction, or preempted by legislative enactment, such decision or legislation shall not affect the validity of the remaining portions of this Ordinance. The City Council of the City of Rancho Cucamonga hereby declares that it would have adopted this Ordinance and each section, subsection, sentence, clause, phrase, or words thereof, regardless of the fact that any one or more sections, subsections, clauses, phrases, or words might subsequently be declared invalid or unconstitutional or preempted by subsequent legislation. SECTION 7: The City Clerk shall certify to the adoption of this Ordinance and shall cause the same to be published within 15 days after its passage at least once in the Inland Valley Daily Bulletin, a newspaper of general circulation published in the City of Ontario, California, and circulated in the City of Rancho Cucamonga, California. SECTION 8: The City Clerk shall certify the adoption of this Ordinance and cause its publication in accordance with applicable law. Signed and approved this _ day of , 2008. Dr. Donald J. Kurth Mayor of the City of Rancho Cucamonga . • A115 CITY COUNCIL ORDINANCE NO. DCA DRC2008-00074 **** 2008 • Page 13 I HEREBY CERTIFY that the foregoing ordinance was adopted by the City Council at its meeting held , 2008, by the following vote: AYES: NOES: ABSENT: ABSTAIN: Published: City Clerk, City of Rancho Cucamonga • A116 T H E C I T Y O F 0. RANCHO C U C A M O N G A Staff Report DATE: March 26. 2008 TO: Chairman and Members of.the Planning Commission FROM: James R. Troyer, AICP, Planning Director BY: Mayuko Nakajima, Assistant Planner SUBJECT: RESOLUTION OF DENIAL FOR USE DETERMINATION DRC2008-00179 - LEGG MASON REAL ESTATE INVESTORS, INC. -Per the direction of the Planning Commission (March 12, 2008 meeting), the adoption of a resolution of denial fora Use Determination for a "Fresh & Easy' market to be categorized under the "Specialty Food Store" land use category within the Specialty Commercial District of the Foothill Boulevard Specific Plan (Subarea 2) - • BACKGROUND: At the March 12, 2008 Planning Commission meeting, the applicant, Legg Mason Real Estate Investors, Inc. requested that a determination for a proposed "Fresh & Easy" market be made. They believed the "Fresh & Easy" market would meet the intent of a "Specialty Food Store" land'use category within the Specialty Commercial District of the Foothill Boulevard Specific Plan. The Planning Commission passed a motion 4-0-1 (Wimberly absent) stating the market did not meet the intent of a "Specialty Food Store" and directed Staff to bring back a resolution of denial determining that this use does not qualify as a Specialty Food Store. RECOMMENDATION: Therefore, Staff recommends that the Planning Commission adopt the resolution of denial for Use Determination DRC2008-00179 through the attached Resolution. Respectfully submitted, ~~ ,~ James R. Troyer, AICP Planning Director JT:MN/Is Attachments: Exhibit A -Draft Planning Commission minutes (March 12, 2008) • Draft Resolution of Denial for Use Determination DRC2008-00179 ITEM B ®RAFT believe the site is conducive to residential development. He also acknowledged Mike Diaz' gantributions to the City. • Vice Chairman or outdoors. Mr. Buquet said there are both types; some have canopy coverings and othesr have Vice Chairman remarked that the project looks right forthe site, but so did the storage facility that was adjacent to a residential neighborhood. Mr. Buquet said there were issues during the construction of im All facility and that he was not involved with the project at that time. He added that thi oposal includes certain improvements including a bridge over the flood control channel a re/emergency access. Vice Chairman Fletcher said he agrees staff that this is a good location for the use. Motion: Moved by FI Etiwanda Specific Plan i the inclusion of RV AYES: FL ER, NOES: NE ABS WIMBERLY • ! k F f :tcher conded by Howdyshell, to initiate the text amendment to the orating the provisions of Option 2 as outlined in the staff report with pelf storage. Motion carried by the following vote: HOWDYSHELL, MUNOZ, STEWART -carried ®RAFT C. USE DETERMINATION DRC2008-00179 - LEGG MASON REAL ESTATE INVESTORS, INC. - A request to determine if a proposed "Fresh & Easy" market should be permitted under the "Specialty Food Store" land use categorywithin the Specialty Commercial District ofthe Foothill Boulevard Specific Plan (Subarea 2). Mayuko Nakajima, Assistant Planner, presented the staff report and asked the Commission to make the determination. Chairman Stewart invited the public to comment on the request. Norm MacKenzie, President and CEO of the Rancho Cucamonga Chamber of Commerce asked the Commission to consider the impacts on the existing businesses in the center. He said it would put 50 employees out of business and would be a workforce disaster; that the project does not support the goals of the Chamber; there are parking problems in the center now; the businesses located behind the proposed market would not have visibility to the street; the project is poorly designed; it may cause existing tenants to leave because of the adverse conditions, including those that are doing well. He expressed concern for the successful restaurants on the site. He opposed the project. Jerry Ogburn, from the Planning Center, reported that he is representing the property owners of the center and they have been working with the representatives for the Fresh & Easy market. He said the center has about 15,000 square feet of vacant space and is under performing; it is a strategic location for the west end gateway to the City; the project proposal would open up the site so that the businesses can be seen; the plan includes the removal of two buildings; and the property manager is willing to work with the existing tenants for business retention. He said they appreciate the concerns of the Italian restaurant and that they would be working with staff to do a parking analysis. He noted that employee parking would be located at the northeast corner of the site behind a • loading dock. He said the proposed project would add to the landmark view of the Thomas Winery buildings. He said without the proposed improvements, the center may continue to struggle. He Planning Commission Minutes -3- March 12. 2008 ~XHI~IT A B-z added that Fresh & Easy Markets generate foot traffic and they offer healthy foods, employ people from the community and are neighborhood based. He said they do not sell liquor, only beer and wine. He said a goal is to provide adequate parking for everyone. Chairman Stewart asked for clarification of the buildings being slated to be demolished. • Mr. Ogburn stated it is the one in front and to the west behind the winery building. He said the proposal will meet the parking requirements. Commissioner Howdyshell asked for the names of the tenants that would be affected by the demolition of the two buildings. Ms. Nakajima stated a Japanese restaurant, an Italian restaurant, and a chiropractor's office. She said she was unsure of the other businesses affected. Commissioner Munoz commented that he did riot feel he had enough information to make a recommendation because of the various issues including parking. James Troyer, Planning Director, commented that the application is specifically for the Use Determination and that there are two ways to go. He noted that if the Commission classifies Fresh & Easy to be a supermarket, then it would not be permitted on this site. He said that if the Commission determines it to be a specialty market then it would be permitted. He said given the nature of the business, and based on the square footage and floor plan, the Commission is being asked to determine what kind of definition they would classify this use as. He said if allowed to go forward as a specialty market then like any other project, it would go through the Design Review process. Chairman Stewart remarked that the decision tonight is for the Use Determination and then it would • have to come back to the Commission for the Design/Development Review. She said that if they are not compatible with parking or anything else, then at that point the Commission could stop the project. Mr. Troyer added that the normal Design Review process includes an analysis of various impacts including demolition, CEQA impacts, parking, and the design butwithoutthe Use Determination they will not know if they can move forward. Chairman Stewart confirmed that the process would include meetings with the current tenants and outreach regarding the project. Mr. Troyer responded that is correct. He commented that the determination of the use drives the whole process. Mr. Ogburn concurred that without the Use Determination they could not proceed. Sandie Smith, stated she is the leasing agent for the center and she works for the owners. She noted that there once was a large market in the center (Irvine Ranch Market) that did not succeed because they were located at the back of the center and were not visible. She said they would work very hard with the tenants to relocate them within the center. She said the businesses in the two buildings slated to be demolished are an Italian restaurant, Nail and hair salon, chiropractor, a Sushi restaurant, a payment center, and one building is currently half empty. Commissioner Howdyshell asked which tenants are in the building that faces Vineyard Avenue. • Planning Commission Minutes -4- March 12, 2008 B-3 Ms. Smith said the chiropractor, the Italian restaurant, and the nail & hair salon. The other building has the Sushi restaurant, the payment center and is partially empty. . Kyle Brown, a local resident, commented that he frequents the Coffee Klatch shop. He said he believes the center does have current parking issues. He said there might be a better way than demolishing buildings.. He said the aesthetics of the rest of the center should be considered. He suggested there should be a Cityldeveloper partnership to improve the look of the entire center. Commissioner Munoz brought the focus back to the use. He remarked that it is a stretch to say this is a specialty business. He said it is more of a grocery store, it sits right across the street from a grocery store, that he is not sure that the business constitutes a specialty use and that he has other issues with the proposal and but he does not support the Use Determination of a specialty market. Commissioner Howdyshell said this center has had parking issues for along time. She said she did not know if she could say that Fresh & Easy is a specialty store and she has not been to one. She said the large grocery store across the street does serve the local demographics. She said she has concerns of the impacts on the rest of the center and that should be studied further. She wondered if Fresh & Easy came in if both stores (Albertson's across the street to the west) and Fresh & Easy would both survive financially. Vice Chairman Fletcher commented that this is not a design review issue or an economic review issue. He said the question is, "is it a specialty food store." He noted that the applicant's letter incorrectly notes the location slated for Fresh & Easy on the site. He said the northeast corner of the property is a cardiofit business, it is not vacant and the market would not be located there. He said'Fresh & Easy is not a specialty food store use. He commented that we need to defne the specialty use first and then we would know if it fits in that category. He suggested the process is wrong. He said related to the economics and vacancies in the center that this is a great location in • the City. He said there would be improvements to the complex but those changes can be slow. He said there is historical significance of the winery building but we got away from that with the development around it. He said putting Fresh & Easy there would be even further from what that corner should be. He remarked that Fresh & Easy is one of a roll out of 1500 stores and that is not that special. He said he has visited one in Las Vegas and he does not believe it fits as a specialty store. He said there are plenty of good locations for this store in Rancho but that it does not fit the specialty store classification. He read an article on the parent company - Tesco. He said it is a concept store and it may be a new concept that may or may not succeed. He said if the Use Determination is approved, we would remove existing businesses and replace it with something that he does not believe is specialty commercial. He commented that from the perspective of the historical/winery element, Fresh & Easy is one step up from a 7-eleven. He added that this is not a Henry's Market or Trader Joe's. He recommended that staff make a detailed definition of what a specialty food store is and then work from that point. Chairman Stewart did not disagree with any of the Commissioners. She remarked that we are allowing the overall project to drive this def nition and that is the wrong way to do this. She said they need a definition, get it into the Code and then go from there. She said at this point she did not feel this market is necessarily a "specialty' market. Kevin Ennis, Assistant City Attorney, said that if the Commission determines that it does not meet the intent of a specialty food store category, then they could direct staff to bring back a resolution of denial and they could also develop/provide a definition. Commissioner Munoz made the motion to bring back a resolution determining thatthe use does not meet the intent of a specialty store. • Planning Commission Minutes -5- March 12, 2008 B-4 Mr. Troyer commented that we need a Code amendment to address this and that there should be a study of all the market definitions to classify them. Commissioner Munoz asked if they needed to define "specialty market" before taking action. • Mr. Ennis stated the Commission could choose to do that however, there is a pending application request. He suggested the Commission resolve the Use Determination request first and then come up with a series of definitions to be considered within the Code amendment process to be accomplished on a separate track. Commissioner Munoz stated in his opinion that this use does not fit. He moved that staff bring back a Resolution of Denial for the Use Determination as a specialty food store and to direct staff to look at the definitions of various food stores/markets for a future Code amendment. Motion: Moved by Munoz, seconded by Fletcher, to deny the Use Determination. Staffwillcraft a resolution of denial to be brought back to the Commission for adoption. The Commission also directed staff to review the various classifications offood stores/markets and provide definitions for consideration to be incorporated into the Development Code via a future Code amendment. Motion carried by the following vote: AYES: FLETCHER, HOWDYSHELL, MUNOZ, STEWART, NOES: NONE ABSENT: WIMBERLY -carried Vice Chairman remarked that this site has significant historical importance and that staff should , make sure that with any new projects for this site, staff should be sure to make the applicants aware of that. lklf i! PUBLIC COMMENTS • None ..... COMMISSION BUSINESS None w ~ w ~ ADJOURNMENT Motion: Moved by Munoz, seconded by Howdyshell, carried 4-0-1 (Wimberly absent), to adjourn. The Planning Commission adjourned at 8:20 p.m. to a workshop held in the Rains Room for Pre- application review DRC2007-00733. The workshop adjourned at 9:00 p.m. and those minutes appear separately. Respectfully submitted, James R. Troyer, AICP • Secretary Planning Commission Minutes -6- March 12. 2008 B-5 • RESOLUTION NO. 08-13 A RESOLUTION OF THE PLANNING COMMISSION OF THE CITY OF RANCHO CUCAMONGA, CALIFORNIA, DENYING USE DETERMINATION DRC2008-00179, BY DETERMINING THAT A FRESH & EASY MARKET DOES NOT MEET THE INTENT OF A SPECIALTY FOOD STORE WITHIN THE SPECIALTY COMMERCIAL DISTRICT OF THE FOOTHILL BOULEVARD SPECIFIC PLAN; AND MAKING FINDINGS IN SUPPORT THEREOF. APN: 0208-101-22 thru 25 A. Recitals. 1. Legg Mason Real Estate Investors, Inc. filed an application for Use Determination DRC2008-00179, for a Fresh & Easy Market, within the Specialty Commercial District. Hereinafter in this Resolution, the subject Use Determination request is referred to as "the application." 2. On the 12th day of March 2008, the Planning Commission of the City of Rancho Cucamonga conducted a meeting on the Use Determination and concluded said meeting on that date. All legal prerequisites prior to the.adoption of this Resolution have occurred. B. Resolution. • NOW, THEREFORE, it is hereby found, determined, and resolved by the Planning Commission of the City of Rancho Cucamonga as follows: 1. The Commission hereby specifically finds that all of the facts set forth in the Recitals, Part A, of this Resolution are true and correct. 2. Based upon substantial evidence presented to this Commission during the above- referenced meeting on March 12, 2008, including written and oral staff reports, the Commission hereby specifically finds as follows: a. The application applies to a proposed "Fresh & Easy" market in the Thomas Winery Plaza located on the Northeast corner of Foothill Boulevard and Vineyard Avenue in the Foothill Boulevard Specific Plan (Subarea 2); and b. The Development Code 17.32.030 -Use Regulations for Foothill Boulevard Districts, lists the secondary permitted and conditionally permitted uses that may be allowed in the Specialty Commercial districts. The use in question is not defined; however, may fall under the supermarket land use category, which is not permitted; and c. The use in question is not of similar intensity to other permitted or conditionally permitted uses in the same district. The purpose and intent of the Development Code, stated in part in Section 17.32.020 is, "to accommodate specialty uses, which promote a special landmark quality or create a special ambience, which is unique to a particular subarea." The Fresh & Easy Market does not reflect the historic theme of the Thomas Winery nor was it found to be particularly unique. The application applies to the properties located within the Specialty Commercial Districts; and • d. The use in question does not meet and conform to the applicable goals and objectives of the General Plan. The General Plan Land Use Element states that it "is responsive to B-6 PLANNING COMMISSION RESOLUTION NO. 08-13 USE DETERMINATION DRC2008-00179 -Legg Mason Real Estate Investors, Inc March 26, 2008 Page 2 • our Vision because it reinforces public and private uses already established, many of which are .oriented to various types of services to our citizens." The proposed market does not reinforce the existing uses in that it does not reflect the historic theme of the Thomas Winery nor was it found to compliment the established uses because of its strong similarity to a convenience store and/or supermarket, both of which would not be permitted. 3. Based upon substantial evidence presented to this Commission during the above- referenced meeting on March 12, 2008, including written and oral staff reports, the Commission hereby specifcally finds and concludes as follows per the City of Rancho Cucamonga Development Code, Section 17.02.040 D: a. The use in question is not of similar intensity to other permitted or conditionally permitted uses in the same district. b. The use in question does not meet the purpose and intent of the district in which it is proposed. c. The use in question does not meet and conform to the applicable goals and objectives of the General Plan. 4. Based upon the substantial evidence presented to this Commission during the above referenced meeting and upon specificfindings offacts setforth in paragraphs 1, 2, and 3 above, this • Commission hereby determines that the Fresh & Easy market is not of similar intensity to other permitted or conditionally permitted uses in the same district, does not meet the purpose or intent of the Specialty Commercial District, and does not conform to the goals and objectives of the General Plan. 5. The Secretary shall certify to the adoption of this Resolution. APPROVED AND ADOPTED THIS 26TH DAY OF MARCH 2008. PLANNING COMMISSION OF THE CITY OF RANCHO CUCAMONGA BY: Pam Stewart, Chairman ATTEST: James R. Troyer, AICP, Secretary I, James R. Troyer, AICP, Secretary of the Planning Commission of the City of Rancho Cucamonga, do hereby certify that the foregoing Resolution was duly and regularly introduced, passed, and . adopted by the Planning Commission of the City of Rancho Cucamonga, at a regular meeting of the Planning Commission held on the 26th day of March 2008, by the following vote-to-wit: • B-7 PLANNING COMMISSION RESOLUTION NO. 08-13 USE DETERMINATION DRC2008-00179 -Legg Mason Real Estate Investors, Inc March 26, 2008 . Page 3 AYES: COMMISSIONERS: NOES: COMMISSIONERS: ABSENT: COMMISSIONERS: • • B-8 Schrader, Lois From: Jerry Ogburn [jogburn@planningcenter.com] Sent: Tuesday, March 25, 2008 6:28 AM To: Troyer, James; Schrader, Lois Cc: Nakajima, Mayuko; Henderson, Larry; bcorbell@Imrei.com Subject: Use Determination/ Fesh & Easy/ DRC2008-00179 Regarding the above subject, is my understanding that Planning Commission has instructed staff to prepare a resolution of denial for adoption at its meeting of March 26, 2008 during the Director's Reports section of the Agenda. Our project team respectfully requests that Planning Commission allow Public Comments during their consideration of this agenda item for several reasons: I) We have had the opportunity to meet with Norm MacKenzie and several members of the Chamber of Commerce Board and they now appear supportive of many aspects of our revitalization plan for Thomas Winery Plaza. We would like them to have the opportunity to speak given this better understanding of the overall proposal. 2) we have also had the opportunity to meet with eleven of the tenants within Thomas Winery Plaza, most of whom have signed statements of support for the overall project. Several have indicated that they would attend the Planning Commission meeting of March 26, and we would ask Planning Commission provide an opportunity to speak to those tenants who wish to do so. 3) Fresh and Easy corporate representatives have reviewed records of the Planning Commission meeting of March 12, and would like to speak at this meeting in order to clarify their business plan for this site and to respond to previous and current comments and concerns expressed by Planning Commissioners. 4) The property owners and their representatives would like to be given the opportunity to express the very real need to attract an activity and revenue generator, such as Fresh & Easy, to this site in order to fund an overall economic revitalization and physical upgrade program for the center. 5) I believe that Planning Commissioner Munoz expressed his concern at the March 12 meeting that he felt that he didn't have enough information to fully review the request. Zn addition, another Planning Commissioner was not present. For these reasons, we request an opportunity to provide additional Public Comment information during this Agenda item at the March 26 Planning Commission meeting. Thank you very much for your consideration........ Jerry Ogburn, Senior Designer Manager, Coachella Valley Office THE PLANNING CENTER telephone: 760.324.4996 cellular: 760.272.5684 e-mail: jogburnOplanningcenter.com 1 RESOLUTION NO. OS-12 A RESOLUTION OF THE PLANNING COMMISSION OF THE CITY OF RANCHO CUCAMONGA, CALIFORNIA, RECOMMENDING APPROVAL OF DEVELOPMENT CODE AMENDMENT DRC2008-00074, ADDING CHAPTER 17.42 TO THE RANCHO CUCAMONGA DEVELOPMENT CODE PERTAINING TO INCLUSIONARY HOUSING REQUIREMENTS FOR CERTAIN RESIDENTIAL PROJECTS, AND MAKING FINDINGS IN SUPPORT THEREOF. A. Recitals. 1. The City of Rancho Cucamonga fled an application for Development CodeAmendment No. DRC2008-00074, as described in the title of this Resolution. Hereinafter in this Resolution, the subject Development Code Amendment is referred to as "the application." 2. On the 26th day of March 2008, the Planning Commission of the City of Rancho Cucamonga conducted a duly noticed public hearing on the application and concluded said hearing on that date. 3. All legal prerequisites prior to the adoption of this Resolution have occurred. 4. Based on the State Housing Production Requirements, the Redevelopment Agency has a responsibility of providing approximately 2,755 units of affordable housing units. 5. The City of Rancho Cucamonga has been allocated a total of 1,282 housing units by the Southern Association of Governments Regional Housing Need Allocation Plan from January 1, 2006 to June 30, 2014, which 778 of the 1,282 housing units are required to be very low to moderate income designations. 6. The Redevelopment Agency has expended or pledged more than millions of dollars from its housing set-aside fund in order to provide affordable units. The Redevelopment Agency's resources are nearing capacity as the Project Area and tax increment reach the limits of the Redevelopment Plan. 7. Unlike the early 1980s when the City was seeing tremendous moderately priced housing growth, the majority of the units that are being constructed today are not considered to be affordable to low or moderate income families; thus, creating a need for affordable housing. 8. There are limited resources remaining to provide affordable housing (available land and finances) in the City. B. Resolution. NOW, THEREFORE, it is hereby found, determined, and resolved by the Planning Commission of the City of Rancho Cucamonga as follows: 1. This Commission hereby specifically finds that all of the facts set forth in the Recitals, Part A, of this Resolution are true and correct. 2. Based upon the substantial evidence presented to this Commission during the above- referenced public hearing on March 26, 2008, including written and oral staff reports, together with public testimony, this Commission hereby specifically finds as follows: ~_~ p PLANNING COMMISSION RESOLUTION NO. 08-12 DCA DRC2008-00074 - CITY OF RANCHO CUCAMONGA March 26, 2008 Page 2 a. The application applies to properties located within the City; and b. The proposed amendment will not have a significant impact on the environment. 3. Based upon the substantial evidence presented to this Commission during the above- referenced public hearing and upon the specific findings of facts set forth in paragraphs 1 and 2 above, this Commission hereby finds and concludes as follows: a. The proposal will further Programs 9 and 10 of the Redevelopment Agency's Housing Plan of the Housing Element in the General Plan, which includes goals for investigating the feasibility of an affordable housing overlay zone and a mixed use overlay zone in order to create new opportunities for affordable housing; and b. The proposed Inclusionary Workforce Housing Ordinance would provide the opportunity to create ajob/housing balance in the City; and c. The proposed amendment will not be detrimental to the public health, safety, or welfare or materially injurious to properties or improvements in the vicinity; and The proposed amendment is in conformance with the General Plan. 4. Pursuant to the California Environmental Quality Act ("CEQA")and the City's local CEQA Guidelines, the City staff prepared an Initial Study of the potential environmental effects of the project. Based on the findings contained in that Initial Study, City staff determined that there was no substantial evidence that the project would have a significant effect on the environment. Based on that determination, a Negative Declaration was prepared. Thereafter, the City staff provided public notice of the public comment period and of the intent to adopt the Negative Declaration. a. The Planning Commission has reviewed the Negative Declaration and all comments received regarding the Negative Declaration and, based on the whole record before it, finds: (i) that the Negative Declaration was prepared incompliance with CEQA; and (ii) that there is no substantial evidence that the project will have a signifcant effect on the environment. The Planning Commission further finds that the Negative Declaration reflects the independentjudgment and analysis of the Planning Commission. Based on these findings, the Planning Commission hereby recommends the City Council adopt adepts the Negative Declaration. b. The custodian of records for the Initial Study, Negative Declaration and all other materials which constitute the record of proceedings upon which the Planning Commission's decisien recommendation is based is the Planning Director of the City of Rancho Cucamonga. Those documents are available for public review in the Planning Department of the City of Rancho Cucamonga located at.10500 Civic Center Drive, Rancho Cucamonga, California 91730, telephone (909) 477-2750. 5. Based upon the findings and conclusions set forth in paragraphs 1, 2, 3, and 4 above, this Commission hereby recommends approval of Development Code Amendment No. DRC2008-00074 by recommending adoption of the attached City Council Ordinance. 6. The Secretary to this Commission shall certify to the adoption of this Resolution ~.~ /a~- Mar 19 2008 10:38RM SRMCTl1RRY 4804837314 p.2 LEGCy MASON REAL ESTATE INVESTORS, INC. ~ 10880 Wilshire Blvd, Suite 1750 Los Angeles, CA 90024 March 18, 2008 City of Rancho Cucamonga Plaz,ning Commission Rancho Cucamonga Civic Center Council Chambers 7 0500 Civic Center Drive Rancho Cucamonga, California 91730 Re: Reconsideration of Use Determination DRC2008-00179 by Ci ofR choCucamon aPlannin Commission "Plannin Commission" Ladies and Gentlemen: On March 12, 2008, the Plamting Commission did not approve the request of Legg Masan Real Estate ]nvcstors, Inc. ("Legg Mason") So designate a proposed "Fresh & Easy" ("F&E") market as a "Specialty Pood Store" within the Specialty Cotmnercial District of the Foothill Boulevard Specific Plan (Subarea 2), Legg Mason hereby respectfully requests that the Platuting Commission reconsider this decision, for several reasons. As described in the Staff Report, dated March 12, 2008, from Mayuko Nakejima, to the Chairman and Members of the Planning Commission, a copy oFwhich is attached hereto as Exhibit A (the "Staff Report"), there is convincing evidence that the F&$ market meets the goals of the Specialty Conununity District altd is compatible with other "specialty-themed" commercial businesses iu the area, As ypu luiow, F&E market is committed to providing fresh (and often organic) foods, affordably priced, for the benefit of local consumers, in an environmentally-friendly building, As the Staff Report states, the F&E market clearly advances the goals of the Specialty Commercial District, which is intended to accommodate "specialty uses, which promote a special landmark quality, or promote a special ambiance," RCMC 17.32,020. Moreover, as you also know, one of the previous tenants in the Thomas Winery Plaza was the "Irvine Ranch Market," which had very similar characteristics to the proposed F&E market. Legg Mason remains confused why the F&E market would be rejected by the Planning Commission, given that the Irvine Ranch Market, also with an emphasis on flesh and organic products, was approved. 'This seems to us to represent a clear change in the Planning Commission's views with respect to pem7itted uses within the Specialty Community District. This inconsistency alone would seem to justify a reconsideration of the plaztning Commission's March 12 decision. Equally troubling to us are several triton ect statements made at the March 12 meeting regarding the F&E market, which apparently helped farnl the basis for the Planning Cotmmission's decision. i.n i i isa»w.3 Mar 19 2008 10:39RM SRMCTURRY 4804837314 p.3 City of Rancho Cucamonga Planning Commission March i 8, 2008 Page 2 We further understand that someone voiced concern that the FBcE market would compete with the nearby Albertson's. We do not think this concern is justified. F&E markets offer limited choices of fresh and wholesome foods, with small packaging, and expedited check- out. Singles, couples, a3zd those with smolt families would likely stop at the F&E market several times a week, as au alternative to fast food, in order to have reasonably priced, fresh and healthy food on their table each night. $ecause ofthe limited choices and smaller packaging, these consumers would still do their weekly, bulk shopping at a traditional supermarket, like Albertson's, ar at "club" stores. Concerns voiced at the March 12 meeting that the F&E market would be similar to a "7-1 I" or "Wal-Mart" are also misplaced. As noted above, this is a store focused on fresh, wholesome Foods, in a small, enviromnentally-Fi-iendlysatting. It is also a store that highly vehtes its employees, with competitive wages, benefits and retirement plans. In short, this is a store that is designed to enhance the quality of life for both its customers and employees. Me3nbers of the Planning Commission also suggested that because Tesco, the developer of the F&E market, plans to open F&$ markets in 2001ocations in California, this F&E market should not be considered as a specialty market. We don't believe that this fact should impact any analysis of whether the F&E market i9 a "Specialty Food Store." As noted above, we believe the F&E market is clearly distinguishable Gom traditional grocery stores and other food shops, regardless of the fact the: other consumers in other communities may also be enjoying the benefits of other FBcE markets. Additionally, Trader Joe's now boasts over 200 stereo, yet each remains a specialty food store. Additionally, we understand that some maybe concenred that the new F&E market will not, from an appearance perspective, integrate well with the historic winery buildings on site. While the design is still being finalized, we can tell you that the stare being planned, while new in consiructiou, will still match the feel of the winery by using effective and creative exterior elements, design treannenls, landscaping, lighting and walkway integration, We are convinced that, when the plans are available for display, you will agree. Finally, we wanted tv reiterate how hard we have worked, both before and aRer Legg Mason's acquisition of this project, to reach out to the City sta.~f for input and support For our redevelopment plans. And such input from the City staff has been cntciai in F&E's efforts to design a project that will be modern, attractive and compatible with the neighborhood. We also plan to reach ottt to the tenants that would be relocated elsewhere in the project to allow for construction of the F&E market. We are sure that you would agree with us that keeping those tenants as successful businesses in Rancho Cucamonga and satisfied occupants of the project should be one of our top priorities. We hvpe that our proactive efforts on both these fronts will be appreciated by the Planning Commission, LA I I 1 R 759v.3 Mar 19 2008 10:38FM SFMCTUFRY 4804837314 p.4 ', City of Ranchu Cucamonga Planning Commission March 18, 2008 Page 3 Overall, we loo]c forward to the Planning Commission reconsider+.ng our proposal, as well as to answering any remaining questions that you may have. Very tnily yours, Brian Corbell Vice President Legg Mason Real Estate Investors LAI I IR7;9v.7 .i Mar 19 2008 10:38RM SANCTUARY 4804837314 p.l )cax Cover Shcet To: Mr..Tacnes Troyer Director of Planning City ofRaiicho Cucamonga Fax No. 909-477-2847 From: Brian Corbell Legg Mason Real Estate Investors Number ofpages including this cover sheet: (4) CITY OF RANCHO CUCAMONGA MAR 1.9 70r r RECEIVEd -PLANNING