75B - PH - 2001 E DYER - Laserfiche WebLink

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First Amendment to DA No. 2015-03 November 14, 2016 Page 2 requesting a zoning or general plan amendment modifying the designation in one of the following ways; changing a non-residential use to a residential use (including City -initiated amendments), increasing the residential density, enacting the residential provision of an overlay zone, or converting apartments to condominiums. In 2015, the HOO was updated to make the inclusionary housing requirements more predictable for housing developers and to increase affordable housing production in conjunction with new market -rate housing development. The changes included simplifying the in -lieu fee calculation, modifying the "moderate Income" definition to be either "low income" or "very low income," and creating incentives that allow developers the option of providing inclusionary housing either on or off-site, In July 2016, the applicant applied for a zoning ordinance amendment to amend the HOO to allow the payment of the housing in -lieu fee in phases, which is identical to the current proposal. However, the applicant decided to withdraw that application and is proposing to modify only the approved development agreement, thus modifying the in -lieu payment timing for this project only. Project Anal sis In February 2016, the Heritage Village project received their entitlements for the development of 1,221 residential units and ancillary commercial services at 2001 East DYer Road. One of the approved project entitlements was a development agreement, which included the ability to construct the project as a three phase development. Per the HOO, the developer is required to pay the in -lieu fee for the project "before issuance of the first building permit for any portion of the residential development This requires the applicant to pay an in -lieu fee of approximately $9,700,000 for all three phases at issuance of the first building permit, which is planned for December. The project applicant is requesting approval to amend the development agreement and allow the payment of the fee as permits are issued for each construction phase, which is in keeping with customary development fee practices. Currently, all development projects pay fees related to building permits, fire facilities mitigation, parks impacts and other development fees on a per dwelling unit basis or per square foot of construction. The requirement for payment of the total in -lieu fee at the time of first building permit was included in the original 2011 Housing Opportunity Ordinance to encourage the development of affordable housing on-site to promote a mix of affordable housing options in the development. The proposed amendment would allow the project to pay in -lieu fees by construction phase consistent with other development fees, while maintaining Incentives for future developers to construct new on-site or off- site affordable housing versus defaulting to in -lieu payments to the City. Approval of this amendment is a logical and business friendly approach to payment of in -lieu fees, reduces uncertainty for developers who contribute to the City's in -lieu funds, and would allow the applicant to pay an initial fee of approximately $2,735,000 for the first phase, as opposed to $9,700,000 that is currently required for the project. 75B-15