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Home My WebLink AboutPresentation - #352021 Affordable Housing Opportunity & Creation Ordinance SEPTEMBER 07, 2021 ITEM #35 Recap o On July 6t", City Council received a report on the progress of the Housing Ad Hoc Committee and discussed the changes to the Housing Opportunity Ordinance recommended by the Committee. o On July 26t", City Council conducted a work study session to receive input from the community and stakeholders and provide feedback regarding the Housing Ad Hoc Committee recommendations on the HOO o Staff contacted developers and labor unions to obtain construction and labor costs Purpose Summary of feedback received from City Council o Review of amendments to HOO u Obtain City Council direction regarding changes to the HOO July 26, 2021 City Council Feedback olicy _q Develop a sliding scale for the in -lieu fee for projects that incorporate skilled & trained workforce Require a mandatory skilled & trained workforce to create a living wage Incorporate local hire requirements Prioritize production of housing for large families Prioritize down payment assistance Regulatory applicability & vesting Add rental protection for tenants Address displacement & protection Industry Feedback & Perspective • Staff met with local developers, the BIA & construction unions • Building and Construction Trades Council • Local 652 of the Laborers' International Union of North America based in Santa Ana • Local 441 of the International Brotherhood of Electrical Workers • Local Union 105 • Southwest Regional Council of Carpenters • The Building Industry Association (BIA) BIA Perspective • The proposed $15 per square foot H00 fee cannot be absorbed by a residential project • A STW requirement will significantly impact the feasibility of constructing a project in the City and will drive projects elsewhere • Indicated no projects have paid the $15 fee Construction Trades Perspective • The labor unions acknowledge a cost increase using a STW • Contend a waterfall of tangible benefits addresses the core of the affordable housing crisis • An employee earning a living wage with employment benefits can attain decent housing and a higher quality of life • A reliable and stable workforce • Reduced public reliance on government assistance programs • Higher efficiency from a trained employee • A career pathway to the various construction trades • Promote regional jobs -housing balance • Promote environmental benefits from reduced vehicle miles traveled • Local pride of working on a project developed in Santa Ana • The labor unions also expressed support for a sliding scale approach to incentivize the use of a STW. Terner Center 2020 Study Findings Figure 4: Hard Construction Cost Per Square Foot, California (2018 $) $250 $200 2010 tiO~1 ryO~ry tiO1� �O~� ryOy� tiOy� ryO~� 0�2OO� • The Terner Study found Hard construction costs fluctuated between $177 to $222 per square foot • STW/Prevailing wage adds approximately $30 per square foot in labor • Increases the hard tiQ,� construction costs of a project on the average between 14% to 17% TERNERoxoo SING ON CENTERUC BE KE LEY ATE RNER CENTER REPORT -MARCH 20M Development Cost Stack 100% 90 % 80% 70 % 60 % 50% 40 % 30% 20% 10% O% ■ Acquisition 10% Total Project Costs ■ Hard Soft ♦A '7 C = 85% Materials & 15% Labor ,J Conversion r VI 0 TERNER-HOus>rf0 CENTER0INNOVATION Figure 1: Total Development Costs for Mlultifamily Projects in California (Completed 2010-20191 u C B. E R K E L E Y ATERNER CENTER REPORT -MARCH 30A Local Hard Costs $19.50 - $37.50 $15 21% - 27% $5 17% - 19% o Estimated local hard costs range between $130-$250 depending on housing and construction o STW adds approximately 15% to 20% o STW and HOO adds • 21 %-27% at $15 per sf • 17%-19% at $5 per sf 2015 HOO Applicable Areas Legend l l l Harbor Mixed -Used Transit Corridor Specific Plan (SP-2) lL l Transit Zoning Code (SD-84) with Zoning Overlay (J) Metro East Mixed -Use Overlay Zone 0 MainPlace Specific Plan (SP-4) 0.5 1 2 Miles Potential HO0 Applicable Areas Legend Harbor Mixed -Used Transit Corridor Specific Plan (SP-2) O Transit Zoning Code (SD-84) with Zoning Overlay 30 Metro East Mixed -Use Overlay Zone ® MainPlace Specific Plan (SP-4) 0( West Santa Ana Boulevard Focus Area 6�/ Grand Ave/77th Street Focus Area l/1 South Main Street Focus Area 80 South Bristol Street Focus Area 0 55 Fwy/Dyer Road Focus Area 0.5 1 2 Miles Regulatory Applicability & Vesting Policy 0 Raised at the July 26t" study session Most critical during the initial implementation of the amended Ordinance Serve as a cut-off threshold and provide clarity for development project proposals currently undergoing approval process HOO applies to projects: • without entitlement approvals • No building permit or has not paid the HOO Both vesting options meet legal standards and are commonly practiced by local governments City Council Feedback & Draft Refinements Develop a reasonable sliding scale in -lieu fee schedule for projects with skilled & trained workforce (STW) • $15 per sf for projects without STW • Reduce to per sf for project incorporating a STW Mandatory skilled &trained labor to address living • Applies to 20 or more units & exempt 19 or less units • Applies to projects receiving funding from the Inclusionary Housing wage Fund • Applies to 20 or more units & exempt 19 or less units • Applies to projects receiving funding from the Inclusionary Housing Local hire requirements Fund • 30% of total workhours • Policies & guidelines to be approved by City Council Prioritize production of housing for large families • Yes Prioritize down payment assistance • Yes Regulatory Applicability & Vesting • Options: Approved Entitlements or Building Permit Issuance Rental protection • Housing Ad Hoc Address displacement & protection 0 Housing Ad Hoc