Item 29 - Zoning Ordinance Amendment No. 2021-03

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Zoning Ordinance Amendment No. 2021-03 November 16, 2021 Page 4 2 2 3 7 41-1904 In-Lieu Fee Option: Revises the in-lieu fee and changes the timing of payment This section is amended to increase the in-lieu fee from $5 per habitable square foot to establish a sliding scale with a $5 - $15 range per habitable square foot. Units Fee Per Square Foot of Habitable Area 5 – 9 $6.00 10 – 14 $9.00 15 – 19 $12.00 20 or more $15.00 This section also removes the prior incentive for “Entitled Residential Projects” to obtain building permits during the current economic climate. The provision for “Entitled Residential Projects” no longer applies after October 1, 2021. The amendments also extend the timing of payment from issuance of the building permit to issuance of the certificate of occupancy, allowing a developer the option to pay after the project is developed in order to make the larger fee more reasonable and to help reduce carrying costs during construction. Commission recommended change: Modify the sliding scale to range between $10 - $15 in place of $6 - $15 as follows: Units Fee Per Square Foot of Habitable Area 5 – 9 $10.00 10 – 14 $11.66 15 – 19 $13.32 20 or more $15.00 Discussion: Prior to considering increasing the bottom step of the sliding scale and reducing the differential between each step in the draft Ordinance, additional analysis is recommended to evaluate the constructability of a project in the 5-19 unit categories. It is challenging for small infill projects to construct affordable units onsite. If the in-lieu fee amount is not aligned with the market gap, these smaller projects may not be feasible. The Commission also discussed the need to provide clarity regarding the timing of payment of the vested in-lieu fee when the City approves a phased development project. To be consistent with the timing provision that permits construction of affordable units proportional with each phase (Section 41-1906(b)of the draft Ordinance) of a project, an approved phased development project should also be allowed to time the payment proportional with each phase as well. This change would meet the intent of reducing the carrying cost during the project construction phase. 41-1904 (c)(1)(i) & (ii) Skilled and Trained Workforce Incentives and Sliding Scale In-Lieu Fee Schedule: Incentive to utilize a skilled and trained workforce and local hire This section is amended to incorporate a skilled and trained workforce incentive and a sliding scale for the reduction of the in- lieu fee to $5 or $10, depending on the level of utilization of a skilled and trained workforce and local hire. This change also incorporates a local hire incentive where a developer of 15 or more housing units would include a 35-percent minimum local hire component as part of the skilled and trained workforce. No recommended changes by the Commission.