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TOWN OF LOS GATOS RESPONSE TO THE SANTA CLARA COUNTY CIVIL GRAND JURY REPORT ON
“AFFORDABLE HOUSING CRISIS: DENSITY IS OUR DESTINY” DATED JUNE 21, 2018
Finding 1a
Lack of housing near employment centers worsens traffic congestion in the County and
increases the urgency to add such housing.
Response: Agree.
Finding 2a
Employers in the County have created a vibrant economy resulting in an inflated housing
market displacing many residents.
Response: Partially agree.
While the finding correctly identified the robust job market as a contributor to the inflated
housing market, there are many other factors driving higher prices and displacement.
Recommendation 2a
The County should form a task force with the cities to establish housing impact fees for
employers to subsidize BMR housing, by June 30, 2019.
Response: Will not be implemented.
This recommendation will not be implemented because the County has responded to this
report stating that it will not implement this recommendation. However, if a task force
is formed, the Town will consider participating in that effort.
Finding 2b
Contributions to BMR housing from employers in the County are not mandated nor evenly
shared.
Response: Agree.
Recommendation 2b
Every city in the County should enact housing impact fees for employers to create a fund
that subsidizes BMR housing, by June 30, 2020.
Response: Requires further analysis.
Implementation of this recommendation would require the Town to prepare a nexus
study to determine if housing impact fees are warranted. This is not an identified Town
Council priority, and will be considered at the Town Council’s Priority Setting meeting
which will occur in December 2018 or January 2019. The outcome of this meeting will
determine if the required nexus study will be pursued.
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Finding 3a
RHNA sub-regions formed by several San Francisco Bay Area counties enable their cities to
develop promising means to meet their collective BMR requirements. Such sub-regions can
serve as instructive examples for cities in the County.
Response: Partially agree.
A RHNA sub-region may result in increased collaboration between jurisdictions; however, each
jurisdiction will continue to be required to plan for meeting its own RHNA for all income
categories.
Recommendation 3a
Every city in the County should identify at least one potential RHNA sub-region they
would be willing to help form and join, and report how the sub-region(s) will increase
BMR housing, by the end of 2019.
Response: Requires further analysis.
The Cities Association of Santa Clara County is currently considering the formation of a
RHNA sub-region for Santa Clara County. At their meeting on August 21, 2018, the Los
Gatos Town Council expressed interest in participating in a RHNA sub-region.
Finding 3b
Developers are less willing to consider BMR developments in cities with the County’s highest
real estate values because these developments cannot meet their target return on investment.
Response: Partially agree.
The Town is not in a position to comment on the business decisions of private developers.
Recommendation 3b
A RHNA sub-region should be formed including one or more low-cost cities with one or
more high-cost cities, by the end of 2021.
Response: Requires further analysis.
The Cities Association of Santa Clara County is currently considering the formation of a
RHNA sub-region for Santa Clara County. At their meeting on August 21, 2018, the Los
Gatos Town Council expressed interest in participating in a RHNA sub-region. If a RHNA
sub-region is formed, it should not be predicated on whether a low-cost city participates.
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Finding 3c
More BMR units could be developed if cities with lower housing costs form RHNA sub-regions
with adjacent cities with higher housing costs.
Response: Partially agree.
A RHNA sub-region may result in increased collaboration between jurisdictions; however, each
jurisdiction will continue to be required to plan for meeting its own RHNA for all income
categories regardless of whether the community has high or low housing costs.
Recommendation 3c
High-cost cities and the County should provide compensation to low-cost cities for
increased public services required for taking on more BMR units in any high-rent/low-
rent RHNA sub-region, by the end of 2021.
Response: Requires further analysis.
If a RHNA sub-region is formed, then the participating jurisdictions can consider whether
compensation to other jurisdictions is appropriate. However, even if a sub-region is
formed high-cost jurisdictions will still be required to plan for the production of BMR
units.
Finding 3e
High-cost/low-cost RHNA sub-regions could be attractive to high-cost cities because they could
meet their BMR requirements without providing units in their cities.
Response: Partially agree.
A RHNA sub-region may result in increased collaboration between jurisdictions; however, each
jurisdiction will continue to be required to plan for meeting its own RHNA for all income
categories regardless of whether the community has high or low housing costs.
Finding 4a
Commercial linkage fees can be an important tool to generate critical revenues to support BMR
housing.
Response: Partially agree.
This is one revenue generating approach assuming a jurisdiction has sufficient new commercial
development.
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Finding 4b
Use of commercial linkage fees is overdue and could be expected to substantially increase BMR
units.
Response: Partially agree.
This is one revenue generating approach assuming a jurisdiction has sufficient new commercial
development to raise enough funds to build affordable housing.
Recommendation 4
Campbell, Milpitas, Los Gatos, Los Altos and San Jose should enact commercial linkage
fees to promote additional BMR housing, by June 2019.
Response: Will not be implemented.
Implementation of this recommendation would require the Town to prepare a nexus
study to determine if commercial linkage fees are warranted. This is not an identified
Town Council priority and it could not be completed prior to June 2019.
Finding 5a
Uneven BMR achievements among cities is caused in part by varying inclusionary BMR unit
percentage requirements.
Response: Partially agree.
The Town of Los Gatos has had success with its inclusionary requirements that have resulted in
the production of BMR units.
Finding 6
In-lieu fees, when offered as an option, are too low to produce the needed number of BMR
units and delay their creation.
Response: Partially agree.
The costs of housing construction may not be keeping pace with established in-lieu fees.
Finding 7
NIMBY (Not in My Backyard) opposition adversely affects the supply of BMR housing units.
Response: Partially agree.
NIMBY is only one of many factors affecting the production of BMR units.
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Recommendation 7
A task force to communicate the value and importance of each city meeting its RHNA
objectives for BMR housing should be created and funded by the County and all 15
cities, by June 30, 2019.
Response: Will not be implemented.
This recommendation will not be implemented because the County has responded to this
report stating that it will not implement this recommendation because it is not
warranted. However, if a task force is formed the Town will consider participating in
that effort.
Finding 8
It is unnecessarily difficult to confirm how many BMR units are constructed in a particular year
or RHNA cycle because cities and the County only report permitted units.
Response: Partially agree.
State law requires all jurisdictions to prepare an annual report of their Housing Elements
following the guidance of the California Department of Housing and Community Development.
This guidance requires reporting of Building Permit issuance since it is a reliable metric of actual
housing production.
Recommendation 8
All 15 cities and the County should annually publish the number of constructed BMR
units, starting in April 2019.
Response: Has not been implemented, but will be implemented in the future.
The Town will make information available regarding Building Permits
Finaled/Certificates of Occupancy issued (i.e., construction complete) on the Town’s
website before June 30, 2019.
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Finding 9
Accessory Dwelling Units (ADUs) offer a prime opportunity for cities with low housing density
and limited developable land to produce more BMR units.
Response: Agree.
Recommendation 9a
ADU creation should be encouraged by decreasing minimum lot size requirements and
increasing the allowed unit maximum square footage to that prescribed by state law, by
the end of 2019.
Response: Has been implemented.
In February 2018, the Town Council adopted a revised ADU ordinance that does not
contain a minimum lot size requirement. Additionally, the revised ADU ordinance
increased the allowable floor area ration by 10 percent to allow larger ADUs.
Recommendation 9b
Increasing BMR unit creation by incentivizing long-term affordability through deed
restrictions for ADUs should be adopted, by the end of 2019.
Response: Has been implemented.
As an incentive for long-term ADU affordability the Town pays the ADU planning
application fee for property owners who are willing to record a deed restriction. The
incentive requires the unit to be rented as a low-income BMR unit if the unit is occupied
by someone other than a member of the household occupying the primary unit.
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