PD Ord and CUP Table -Addendum and Exhibit 15
PREPARED BY: RYAN SAFTY/JENNIFER ARMER
Associate Planner/Senior Planner
Reviewed by: Community Development Director
110 E. Main Street Los Gatos, CA 95030 ● 408-354-6874
www.losgatosca.gov
TOWN OF LOS GATOS
PLANNING COMMISSION
REPORT
MEETING DATE: 02/14/2018
ITEM NO: 3
ADDENDUM
DATE: FEBRUARY 13, 2018
TO: PLANNING COMMISSION
FROM: JOEL PAULSON, COMMUNITY DEVELOPMENT DIRECTOR
SUBJECT: TOWN CODE AMENDMENT APPLICATION A-17-006 AND GP-17-003.
PROJECT LOCATION: TOWN WIDE. APPLICANT: TOWN OF LOS GATOS.
CONSIDER AMENDMENTS TO CHAPTER 29 (ZONING REGULATIONS) OF
THE TOWN CODE, THE GENERAL PLAN, AND OTHER POLICY DOCUMENTS
REGARDING PLANNED DEVELOPMENT ORDINANCES AND THE
CONDITIONAL USE PERMIT TABLE.
REMARKS:
Exhibit 9 includes public comments received between 11:01 a.m., Friday, February 9, 2018 and
11:00 a.m., Tuesday, February 13, 2018.
EXHIBITS:
Previously received with February 14, 2018 Staff Report:
1. Required Findings (one page)
2. Existing Planned Development Ordinance (five pages)
3. Town Council Ad Hoc Committee Recommended Draft Planned Development Ordinance
(three pages)
4. Resolution 2015-008 – Establishing the Planned Development Study Committee (two pages)
5. Planned Development Study Committee Recommended Draft Planned Development
Ordinance (three pages)
6. Planned Development Study Committee Recommended Modifications to the CUP Table
(one page)
7. Planned Development Study Committee Other Important Issues (one page)
PAGE 2 OF 2
SUBJECT: CONSIDER AMENDMENTS THE TOWN CODE REGARDING ACCESSORY
DWELLING UNITS. TOWN CODE AMENDMENT/ A-17-006 AND GP-17-003
FEBRUARY 13, 2018
N:\DEV\PC REPORTS\2018\PD update ADD.docx 2/14/2018 9:31 AM
8. Planned Development Study Committee Recommended General Plan Amendments (two
pages)
9. Executive Summary from the Chair and Vice-Chair of the Planned Development Study
Committee (three pages)
10. Minutes from August 2, 2016, Town Council hearing (one page)
11. Code Sections 29.10.066 & 29.40.660 Excerpt - Recreational Open Space (two pages)
12. Code Section 29.40.635 Excerpt – Density Findings (one page)
13. General Plan “Mixed-Use” References (three pages)
14. Neighboring Jurisdiction Definitions of “Mixed-Use” (one page)
Received with this Addendum Report:
15. Public Comments received between 11:01 a.m., Friday, February 9, 2018 and 11:00 a.m.,
Tuesday, February 13, 2018
Jennifer Armer
From:
Sent:
To:
Cc :
Subject:
Attachments:
Lee Quintana < leeandpaul@earthlink.net>
Monday, February 12, 2018 9:45 PM
Jennifer Armer
Joel Paulson
Planning Commission 2/14/18 ITEM #3 Planned Development Ordinance and
Conditional Use Table
Green Belt -Public Benifit..pdf
Please provide the Planning Commission an addendum with the attached Greenbelt Alliance "Public Benefit Bonus Policy
Brief".
Thank you, Lee
GREENBELT ALLIANCE
Public Benefit Bonus Policy Brief
Prepared by Chris Schildt
November 2012
Introduction
The City of Mountain View adopted a new General Plan in July 2012. The Land Use and Design
clement of the plan allows for additional height or floor area ratio (FAR) for new devdopments that
provide significant public benefits in key areas. The City is now in the process of determining how
best to implement a public benefit bonus program based on the guidelines laid out in the General
Plan. 1bis memo is intended to aid in this effort by providing an overview of important
considerations, best practices, and recommendations for a public benefits bonus ordinance or policy
based on a review of published materials and interviews with experts and practitioners from around
the state. This report seeks to address some specific questions, including:
•
•
How to balance public benefits with an appropriate amount of project bonus?
How can a public benefits bonus policy be implemented?
• What are appropriate benefits and bonuses to include in a policy, and what is a good process
to determine them?
This report is written in three parts. Part l provides a discussion of key components and best
practices for structuring a public benefits bonus policy. Part II provides in-depth discussion of three
case studies that highlight different approaches to public benefits bonuses in California: San Diego,
Santa Monica, and Palo Alto. Part III provides recommendations for the City of Mountain View.
Additional resources and examples from other cities are provided at the end of the report, in
Appendix A.
This work has been made possible thanks to a grant to Greenbelt Alliance's partner Forterra from
the U.S. Environmental Protection Agency Office of Sustainable Communities under the Building
Blocks for Sustainable Communities Program.
MAIN OFFICE• 312SutterStreet, Suite 510, San Francisco, CA 94108 • (415) 543-6771 •FAX: (415) 543-6781
SOUTH BAY OFFICE• 1922 The Alameda, Suite 213, Son Jose, CA 95126 • (408) 983-0856 •FAX: (408) 983-1001
EAST BAY OFFICE• 1601 N. Main Street, Suite l05, Walnut Creek, CA 94596 • (925) 932-7776 •FAX: (925) 932-1970
NORTH BAY OFFICE• 555 5th Street, Sutte 300 B, Santa Rosa, CA 95401 • (707) 575-3661 •FAX: (707) 575·4275
INFO@GREENBELT.ORG • WWW.GREENBELT.ORG
Structuring a Public Benefits Bonus Policy
Public benefits bonus policies are known by a variety of names: incentive zoning, community
benefits, land value recapture, and more. For clarity and consistency, this report will use the term
public benefits bonus. Essentially, public benefits bonus policies allow for specific incentives or
bonuses to be granted to a developer in exchange for certain benefits or amenities for the
community.1 While a bonus is often in the form of increased density, height, or FAR sometimes it
can include an expedited permitting process, waived impact fees, reduced parking requirements, or
other types of incentives in exchange for public benefits that are important to the local community.
Structuring a public benefits program can take a variety of forms, but most of them have these
common elements:
1. Geographic Target. A bonus program is often targeted in specific areas of a city where
increased intensity of development is desired. The targeting can happen by inserting the bonus
program into a specific zone or designating neighborhoods explicitly in the ordinance language.
The ordinance in downtown San Diego, for example, includes a map delineating the specific
parcels eligible to participate in their bonus program. The City of Mountain View could establish
the geographic target( s) through their upcoming Precise Plan updates along El Camino Real and
elsewhere.
2. Public Benefits. Determining which public benefits are priorities to local residents and to the
City overall is an important first step. The list of possible benefits is nearly endless: parks and
open space; affordable housing; larger size homes (e.g. 3-bedroom units); street and
transportation improvements; art and community facilities; educational facilities and funding for
local schools; green development (e.g. LEED or eco roofs); economic opportunities (e.g.
prevailing wage or first source requirements); and more. Ideally the City can engage with
residents from the beginning to determine their priorities. For example, in both San Diego and
Santa Monica, the list of community priorities for public benefit was developed in public
meetings_ as a part of plan updates for a downtown Community Plan and a General Plan,
respectively. The initial list created through resident participation should be evaluated by the City
for appropriate city-wide and regional public benefits to be added, if necessary. For example, San
Diego included the state affordable housing density program as a part of the FAR bonus
program, making it easier for developers to understand and use and for staff to administer.
3. Bonus. Determine which bonuses will be offered to developers. Oftentimes, the bonus for
developers will be in the fonn of increased intensity of use, such as an increase in the maximum
FAR or height or dwelling units per acre. The City of Berkeley's bonus program includes an
expedited permitting process for projects that provide certain benefits. Most importantly, the
bonus offered needs to add value for the developer at the site where it will be applied. If a
neighborhood already has a height or FAR limit greater than there is market interest to develop,
for example, a bonus that allows for even greater development will not likely get used. It is
important that the city has a clear understanding of what type and intensity of development the
market can support.
1 See Stuart Meck, Editor. Growing Sr11arl ugislative G11idebook: Model Stamtes far Planning and the Manage111ent of Change.
Page 2of15
4. Balance of Benefits and Bonus. Striking the right balance between the public benefits and
project bonus of a policy is tricky but essential work. A third-party analysis of the cost of the
benefits and the development market can provide valuable data to inform what a good balance
is.
The City of Menlo Park, for example, conducted a financial feasibility study that determined the
potential for additional benefits from private development that receive a FAR bonus. The study,
conducted in Spring 2012 by Strategic Economics, determines the amount of public benefit
available based on a proforma model that solves for land value, using tested calculations for
development costs and return on investment. The study tan pro forma models for a range of
development scenarios to understand which project types would be most feasible. The study also
tested the impacts of proposed density bonuses on residential development, and found that
bonus generated a higher residual land value, suggesting it would be possible to develop a
successfUI public benefits program. A link to the study is available in Appendix A.
In the City if Berkeley, the bonus level was determined based on a market analysis using a range
of development types (condo, apartments, office), heights, and parcel sizes, with assumptions
made about land value. They used a developer pro fonna model, as well, to solve for each
scenario and determine what types of bonuses would maximize developer return, and therefore
maximize potential to extract public benefits. A link to the study is available in Appendix A.
While these analyses can provide good starting points, ultimately the right balance between
benefits and bonus will depend on the priorities and goals for each city. For example, The City
of Tampa provides an additional bonus for the public benefits that are most important to the
community. A city may also choose to start out with low benefits and high bonuses to gain
developer buy-in to the program, and slowly increase the benefit requirements over time. The
City of San Diego, for example, recently increased their benefit requirements as the program
proved successful.
5. Implementation. It is important to establish a clear procedure to implement the policy. The
City will need to work with developers to create a process that is transparent, predictable, and
expedient. One common way to accomplish this is to create a points or percentage based system
or a simple formula so that developers can calculate the amount of bonus they will receive for a
given benefit. San Diego, Portland, and Seattle all use this method. Perhaps the simplest way to
implement a bonus program is to make additional FAR available for purchase, such as in San
Diego. In that scenario, the City must establish a spending plan to make transparent how the
funds will support needed public benefits.
Depending on the structure of the public benefit bonus ordinance, there may be certain legal
requirements that need to be met. For example, the City of Santa Monica is conducting a nexus
study to ensure any legal considerations of their incentive zoning bonus program is addressed.
For more on this, see the Santa Monica case study below.
The ultimate success of a public benefits policy will depend on finding the "sweet spot" between
maximizing the public benefits opportunity of a development and staying within the market bounds
Page 3of15
of what is feasible to build. The "sweet spot'' will move over time, and sometimes disappear
altogether, such as during the worst part of the last recession. It is important to have ongoing, open
communications with developers and community members alike to stay ahead of market trends and
be able to adjust the benefits and bonus over ti.me in a transparent way. For example, the City of San
Diego indexes their FAR purchase price to the Consumer Price Index, with adjustment made
annually. This creates a predictable process for developers while ensuring the bonus keeps pace with
inflationary trends.
A Note about Schools and Public Benefits
Like many communities throughout Calif omia, Mountain View is concerned about ensuring new
development contributes to the quality of its schools and educational programs. The type of
development -and public benefit -that occurs in the City has the potential to impact the local
school system in a number of ways.
In San Francisco, new development in the Bayview /Hunters Point neighborhood must contribute
fees to an education support fund. Although this education fee was negotiated as a part of a
Community Benefits Agreement, it would be feasible to create a FAR purchase program such as the
one in San Diego (see case study, below), with contributions going to support programs or facilities
at a neighborhood school. To do this would require addressing jurisdictional logistics between the
school district and the City.
In both Tampa and Santa Monica, public benefit bonus programs include additional bonuses for
housing developments that include on-site or adjacent child care facilities. In Tampa, the bonus is
calculated as the percentage of need met on-site for a child care center, based on the number of
children generated by the project.
Beyond public benefit bonuses, school districts also have the ability to levy developer impact fees on
new residential and commercial construction or to create Mello-Roos Community Facilities Districts
to address the impacts of new students on existing school facilities.
Page 4of15
Case Studies
Public benefit bonus programs began in large cities such as Chicago and New York City over 50
years ago, but became widely popular in cities and towns of all sizes during the development boom
of the early and mid-2000s. Unfortunately, many policies that were created during that time have not
met their potential, largely because of changing market conditions. The three case studies
highlighted here -San Diego, Santa Monica, and Palo Alto -were chosen because they were
considered particularly relevant for Mountain View, they demonstrate a range of program design and
implementation options, and they have had some success to evaluate. While Santa Monica's program
has not been implemented yet, their process and the studies commissioned are instructive.
Below is a snapshot summary of the three case studies:
San Diego Santa Monica Palo Alto
Target Area Select areas in Neighborhoods as City-wide
downtown only designated in the
General Plan
Public Benefits Affordable housing; Affordable housing; Not pre-determined -
(partial list) 3-bedroom units; traffic reduction benefits are proposed by
public open space; strategies; physical developer for each
eco-roofs improvements; social development.
and cultural amenities;
historical preservation
Bonus FAR increase either for Increased FAR and/ or Not pre-determined -
purchase or in exchange height bonus is determined
for benefits through zoning change
process
Balance of Cost of purchasing The City established Negotiated by City case-
benefits and FAR set at $15/sq ft in three tiers of bonus: by-case
bonus 2007 with annual Tier 1: No bonus, no
increase based on CPI. benefit
Other benefits have Tier 2: Increase in
predetermined ratio height/FAR for some
(e .g. 10% open space benefits
for 0.5 FAR increase). Tier 3: Additional
increase in height/FAR
for additional benefits
Implementation Select benefit and Though not yet adopted, Request change in zoning
bonus from pre-the City is considering code (quasi-judicial)
determined list, with three levels:
staff approval Tier 1: Ministerial action
Tier 2: Discretionary
action
Tier 3: Likely
Development
AS?reement
Page 5of15
San Diego, California: FAR Bonus Purchase Program
In 2006, San Diego developed a new downtown community plan. One of the primary goals in the
plan was to both increase development intensity in the downtown area and ensure that these
developments led to new community amenities. In order to achieve this, they created a FAR density
bonus program in conjunction with the plan.
The program is administered by Civic San Diego, formerly the Centre City Development
Corporation, which is an organization charged with the planning function for the downtown area,
including all planning, zoning, and redevelopment activities. Originally under the Redevelopment
Agency, Civic San Diego is now under the City directly but still maintains the same planning
functions for the area.
How the program works: Within the downtown area, certain parcels were delineated as areas where
developers could build above the maximum FAR in exchange for providing public benefits,
including eco-roofs, urban open spaces, 3-bedroom units, and affordable units. The affordable units
bonus is in compliance with the state density bonus program. See the table below for an overview of
the program and how the benefits are calculated.
In addition to providing certain benefits, developers could purchase additional FAR in some parts of
downtown where higher intensity development was acceptable. The purchase price was set at $15
per additional square foot in 2006, and has been adjusted annually according to the Consumer Price
Index. The funds gathered through the FAR purchase program are restricted to the downtown area,
and must be used for parks, open space, or acquiring additional right of way for parks and open
s pace. Notably, Civic San Diego collects and administers the funds because of the role they play in
administering planning functions in the downtown area, but in other cities this function could be
played by the City directly.
The FAR density program was dev eloped as a part of the Downtown Community Plan update with
input from residents. The program is relatively easy for staff to administer; developers select the
desired benefit and bonus from a pre-determined list, outlined in Section 156.0309 of the Municipal
Code, available at: docs .sandiego.gov /municode/MuniC odeChapter15 / Chl 5Art06Division03.pdf
While the mix of amenities was developed through the community planning process, the amount of
bonus a developer would receive, and the price per square foot, were determined by the city and
staff. The City Council directed staff to establish the original FAR purchase price at $15 per
additional square foot, and while there were some who felt that the price should have been set
higher, there have not been any efforts to raise the price beyond the annual Consumer Price Index
adjustments. To date, the purchasing of FAR has raised $1.7 million, with another $1.5 million in
additional revenues to be generated if all current projects move forward. The funds are being used
to build a new park in the downtown area.
In 2012, the FAR bonus program was amended in order to tighten the public benefit requirements.
For example, the original ordinance allowed for a bonus FAR of 1.0 for an eco-roof, which has been
amended to either 0.5 or 1.0 FAR depending on whether the eco-roof is accessible to residents. The
2012 amendment also included increases in the maximum FAR that some projects could receive.
P age 6of15
San Diego Program Overview
Public Amenity FAR Bonus Notes Number of develop-
provided (added to ments that used this
maximum base
FAR)
Affordable Units Based on st.ate In compliance with state 5 (out of 34 eligible)
requirements affordable housing density
program.
Urban Open Space 2 (out of 18 eligible)
10% of site 0.5 FAR
20% of site 1.0 FAR
3-Bedroom Units Up to 1.0 FAR 10% of units must be 3-bed 3 (out of 18 eligible)
or larger, with a minimum of
5 units.
Eco-Rnoft Up to 1.0 FAR To receive max bonus, roof 10 (out of 18 eligible)
must be accessible to
residents.
FAR Pt[Jment Bonus Up to 5.0FAR Set in 2007 at $15 /sq ft, 10 (out of 15 eligible)
Program with annual CPI increases.
Goes into a fund to create
parks, open space, or acquire
rit!:ht-of-way.
From San Diego Municipal Code Section 156.0309(e)
Program Effectiveness: The program has been well used by developers. Of the 18 eligible projects built,
approved, or under review, 13 have chosen to use at least one of the FAR bonus options. Five of
the projects hav e elected to use the affordable housing density bonus, which will lead to 141 new
affordable units in the downtown area. Three projects have elected to build 3-bedroom units,
creating 87 new units total. The popularity of some o f the menu items , such as the eco-roofs,
prompted staff to tighten the requirements in the latest round of program amendments. Also,
affordable housing adv ocates are working with the City to explore creating an additional off-site
affordable h ousing density bonus in collaboration with nonprofit housing developers to increase the
use of the affordable housing density bonus option.
There has been little public opposition to the program. Although it is difficult to know definitively,
interviewees suggested that the public success of this program is perhaps due in part to the public
participation in the beginning as a part of the Community Plan update.
Page 7of1 5
Santa Monica, California: Community Benefits and Incentives
In 2010, the City of Santa Monica updated their Land Use and Circulation Element (LUCE), which
includes a community benefits program that allows for increased density in exchange for a range of
benefits, including traffic reduction management strategies, affordable housing, physical
improvements, social and cultural amenities, and historical preservation.
How it works: The LUCE establishes a three tiered system for determining development height. Tier
1 establishes a base height of 32 feet in most areas. If developers want to build above that, they can
opt for a discretionary permit for increased height in exchange for providing public benefits, which
is called Tier 2. Tier 3 is available in certain parts of the city where additional height is allowed in
exchange for even more public benefits, most likely determined through a Development Agreement.
The basic structure of the tier system is described in Chapter 2.1: Land Use Policy and Designations
of the LUCE. The community benefits program is described in Chapter 3 .2: Community Benefits of
the LUCE. The entire LUCE is available at http://www.shapethefuture2025.net/
Residents participated in developing the community benefits program as outlined in the LUCE,
including the categories of community benefits to include and the tiered system, through the three
year-long public participation process for the LUCE. Before the LUCE was adopted, the City
commissioned a financial feasibility study by KMR to determine if the three tiers they were hoping
to establish would result in value enhancements, increasing the development potential of a site and
therefore the potential for community benefits.2 The study involved a case-by-case proforma
analysis using four different prototype developments.
The pro forma calculated:
•
•
•
base construction costs;
sales revenue or net operating income depending on project type;
residual land value; and
• the value enhancement (difference between residual land value in base case compared to
tiered proposal)
The analysis found that the tier structure proposed in the LUCE provides significant value
enhancement for the prototypes studied. However, this analysis did not attempt to quantify the cost
of the public benefits proposed in the LUCE to determine whether the ti.er structure provided value
enhancement net the cost of the benefits.
Since the LUCE was adopted in 2010, the City has continued the process of designing and
implementing the tiered development community benefits program. In Spring 2012, the City
commissioned a study by Dyett & Bhatia on issues, options, and case studies for codifying
community benefits into their zoning ordinance update.3 This study discusses several legal
considerations for Santa Monica as the City proceeds to incorporate the bonus program into the
zoning code. The study notes that there is an existing body of law that requites cities to establish
nexus and rough proportionality when incorporating community benefits into zoning standards. The
2 The analysis is available for download at:
http://www.shapethefuture2025.net/PDF/luce 2009 documents/KMA fiscal analysis benefits.pdf
3 This study is available for download at
http://www.ci.berkeley.ea.us/uploadedFiles/Planning and Development/Level 3 -
Redevelopment Agency/Santa%20Monica%20Z0%20Update-CB%20and%201ncentives.pdf
Page 8of15
study cites several cases, including San &:mo Hotel ti. Ci'!J & Coun'!J of San Francisco (2002); Ehrlich v.
Culver Ci'!J (1996), and Building Industry Association ti. City of Patterson (2009). It is unclear how this body
of case law may apply to a voluntary public benefits bonus program, but this legal consideration
should be taken into account when designing a program. The City of Santa Monica has already
conducted nexus studies that will cover many of the public benefits to fulfill legal requirements with
regards to establishing development impact fees . The City may conduct an additional study to
establish a nexus for the tiered zoning structure they are considering adopting. The zoning code
update is expected to be adopted by mid-2013.
Palo Alto, California: Planned Community Zoning
Planned Community (PC) zoning is a flexible zoning designation used in many cities throughout
California, primarily for large-scale new residential developments. The City of Palo Alto uses the PC
rezoning process in creative and sometimes controversial ways to maximize the public benefits of
higher intensity infi11 projects.
How the program works: Public benefits are built into the PC zoning designation; in order to qualify for
a PC, the Planning Commission and City Council must find that "development of the site under the
provisions of the PC planned community district will result in public benefits not otherwise
attainable."4 In Palo Alto, developers will choose to pursue a PC zoning change if they want to build
a project at a greater height, density or FAR, or with a different mix of uses than is allowed under
the current zoning designation for a site. The zoning change application must go through review by
the Planning Commission, Architectural Review Board, and the City Council.
The Planning Department reviews several requests for a PC zone change from developers each year.
The developers propose which public benefits the project will include in their application to the city
for the zoning change. The final package of public benefits gets negotiated with staff and ultimately
the City Council before the project is approved. This can often be a lengthy and uncertain process;
one development took over 15 years to get a PC approved.
The City does not have a standard process to determine the cost of the community benefits, nor the
increased value of the zoning changes. There is no explicit community process about the public
benefits, although the city does encourage developers to host public meetings to get resident input.
Types of community benefits from past projects include traffic studies, public art, public plazas,
public meeting rooms, tree plantings, grocery stores, and affordable housing.
The City has not tried to quantify the cumulative impacts of the public benefits over the years, but
two projects from the last 10 years help illustrate both the benefits and perils of this approach.
The first project is 800 High Street, a multi-use development approved in 2003 . 800 High Street
includes 60 units, 10 of which are below market rate, on what was previously an old dry-deaning site
near a Caltrain station. The original zoning designation for the site was for much lower density,
making the project infeasible for the develo per. The City Council granted a rezone from Downtown
Commercial Service and Pedestrian O verlay t o Planned Community in February 2003. However,
resident concerns about the increased density were so great that the rezone was put to a referendum
in the fall of 2003. The referendum failed, and the project was built.
4 Fr om Palo Alto Municipal Code 18.28.050
Page 9of15
Project name: 800 High Street
y d 2003 ear approve :
Original zoning code Final project under PC Public Benefits
rezone
Downtown Commercial • 60 units • 10 below market rate units
Service Pedestrian Overlay (CD • Underground parking • Public plaza s (P)) • 1,900 sq ft of retail • 57 public parking spaces • Max 26 housing units, with -800 sq ft public plaza • • Retail
some additional BMR
units
Source: Author calculations from city documents
The second project is called Alma Plaza. In 2007, the City approved a PC zone change that allowed
the developer to replace an underutilized retail space with retail and 51 homes, 14 of them below
market rate. In addition to the affordable housing, the public benefits include: preserving 15,000 sq
ft of the retail space specifically for a neighborhood-serving grocery store, a 0.2 acre public open
space, LEED Silver design, a public comm.unity room, and off-site transportation improvements.
The project is nearly complete and is expected to be fully open in early 2013 .
Project name: Alma Plaza
y d 2007 ear approve :
Original zoning code Final project under PC Public Benefits
rezone
Original Planned Community: • 51 housing units • Guaranteed neighborhood
• Commercial retail only • -24,000 sq ft retail grocery in retail space
• 0.2 acre public park • 14 below market rate units
• Parking • 1,300 sq ft public
community room
• Public park
• LEED silver development
• Off-site street
improvements
Source: Author calculations from city documents
Program effectiveness: Many of these PC rezonings have faced a good deal of controversy. Some
residents have expressed concerns that the PC designation is getting overused by the City, and that
determining public benefits in this way is too unpredictable and does not include robust community
input. There are also concerns that these zoning changes amount to a "give-away" for developers,
and that the City is not receiving enough public benefits in return. The PC rezoning process also
takes up a significant amount of city staff resources.
The PC rezone maximizes the City control of a project and their ability to extract benefits. It allows
for the greatest amount of flexibility for the City to work with developers to create a project that
works for everyone. This flexibility allows for the City to look at each development on a case-by-
case basis and determine what is appropriate for each.
However, the process can be incredibly long and uncertain for the developer. The Alma Plaza
project has taken over 15 years to complete, and the developer said he is unlikely to ever pursue a
PC rezone in Palo Alto again. This has likely created a chilling effect on other developers interested
in building in Palo Alto.
Page 10 of15
Conclusion and Recommendations
A number of best practices and recommendations for the City of Mountain View emerged in the
process of research and analysis for this report. These are:
1. Adopt a public benefits bonus policy in conjunction with an upzoning process to
capture market demand for increased development intensity and increase public
participation. Tying these two processes together can make it easier for the City to gain
input from residents about what benefits are most important for them, and provides a way
to attain those benefits through the zoning code. In Oakland, residents were interested in
pursuing public benefits density bonus program, but after the City had already dramatically
increased FAR and height limits in the neighborhood. It is unlikely that there will be
demand from developers to build beyond what is already allowed under the new zoning,
undermining the City's ability to create a public benefits bonus program. Once a city has
already increased development intensity in an area, it can become both politically and legally
difficult to reduce zoning to establish a public benefits bonus program.
2. Work with residents ahead of time to determine their list of priorities for public
benefits. To varying degrees, each of the case studies had some process to get community
input into which public benefits were most important for residents. This step helps
establish trust with residents that they will receive something important to them in
exchange for the development incentives, and helps dispel concerns that the bonus is :i
"give-away" for developers. This critique is often heard in Palo Alto, which only allows
residents give input on public benefits at a project-by-project level.
3. Commission an independent analysis of market conditions to determine the right
balance of benefits to bonus. Nearly every case study reviewed for this report included a
third party independent study. At a minimum, these studies should involve a feasibility
analysis of likely projects under base zoning and bonus scenarios in order to determine
whether or not the bonus will enhance development feasibility. In establishing what the
right balance is, be aware that public benefits that are easier to obtain are more likely to be
selected by the developers, if they have a choice. For example, building below market rate
homes is going to be more complicated for a developer than simply purchasing additional
FAR for a set price per square foot. The ratio for each benefit should be established with
these considerations in mind.
4. Make the program simple to understand and easy to use. Because this is a voluntary
program, developers are most likely to use it if they can understand it and easily see the
benefit of opting to use it. Also, tight municipal budgets demand that the program be easy
to administer in order to save on city costs. The City of Tampa is in the process of changing
their bonus program from a quasi-judicial zoning amendment to a simple administrative act.
This makes it easier for the developers to use, and less costly for the City to implement.
However, with this change comes less oversight by the Planning Commission and City
Council. The City of Palo Alto has kept their bonus program embedded in a zoning change
in order to keep this level of oversight on individual projects.
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5. Recognize that benefit priorities and ratios will change over time. Many of the cities
examined here have made changes to their programs since they were established. In San
Diego for example, the original bonuses were so popular with developers that the cities felt
they could increase the public benefit requirements without dampening developer interest.
A program should be designed with some amount of flexibility in mind.
P age 12of15
Appendix A: List of other ordinances
Within California and around the country, the variety in public benefit bonus policies is incredibly
rich. The three case studies in this report were selected because they were considered particularly
relevant or instructive for the City of Mountain View; however, the other places we examined may
also be useful for the City as it constructs its own processes and policies . Below are brief summaries
of these other cities' ordinances and programs, with links to relevant documents and codes .
A good general resource for land use incentives, including a model ordinance for California cities, is
provided in Chapter 9 of the American Planning Association's Growing Smarter ~gislative Guidebook:
Model Statutes for Planning and the Management of Change. The guidebook is accessible online at:
http:IIwww.planning.org/growingsmart/guidebook/
Within California
Berkeley
In Spring 2012, the City of .Berkeley adopted the Green Pathway program, which allows developers
to opt in to a streamlined entitlement process if they meet certain requirements. The number of
requirements varies depending on the project height, but includes: at least 20 percent affordable
housing to people who earn 50 percent or less of AMI; at least 30 percent local workers for
construction; waive the right to state density bonus law; 16 percent of construction workers be
apprentices; and all construction and hotel (if applicable) workers be paid state prevailing wage. In
exchange, the city will agree to plan approval as a matter of right if the project complies with
applicable zoning and plan requirements and standards. The Green Pathway program is described in
detail in Municipal Code 23B.34 (available at http://codepublishing.com/ca/berkeley D
The City also developed a downtown development feasibility study to determine the extent to which
new development can support public benefits and remain financially viable . AECOM's presentation
of both their method and results are available at:
http://www.mtc.ca.gov/planning/smart growth/tap/DT Berk City Council 101011.pdf
Mammoth Lakes
The Town of Mammoth Lakes is in the process of developing a Community Benefits Incentive
Zoning policy as a part of their Zoning Code Update. The 2007 General Plan directs the Town to
"ensure appropriate community benefits are provided through district planning and development
projects." Since then, the Town has completed several neighborhood district planning studies to
define desired community benefits. They commissioned a papet by Dyett & Bhatia to examine key
areas of consideration and recommendations for creating a defined program. The study
recotntnends the Town create a "menu, formula, or point system" to assign values to desired
community benefits ahead of time, making the program simple and transparent for developers to
use.
The study, completed in Fall 2012, is available for download at:
http: I /mammothlakes .granicus.com/Meta Viewer.php ?view id=2&event id= S&meta id =25338
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Menlo Park
The City of Menlo Park is pursuing a public benefits strategy as a part of their El Catnino
Real/Downtown Specific Plan. In Spring 2012, Strategic Economics completed a memo for the City
that outlines the financial feasibility of various development types under the proposed base FAR and
bonus density. The study found that the density bonus for residential development is likely to
generate a higher residual land value than the base level, suggesting it is possible to pursue a public
benefits program in exchange for increased density.
The study is available for download at: http://www.menlopark.org/departments/pln/ecr-d/fsp-
memos/ecr-d fsp-memos g.pdf
Outside California
Chicago, Illinois
The City of Chicago offers a downtown density bonus program that grants residential developers
additional square footage in exchange for a variety of benefits, including: affordable housing, public
open space, green roofs, and transit station improvements. To calculate the bonus, a formula is
applied that pegs the amount of bonus to the amount of benefit directly. For example, the .
affordable housing bonus is established at four square feet of bonus for every one square foot of
affordable housing provided. If the developer opts for an in lieu fee, it is equal to the bonus floor
area multiplied by 80 percent of the land value of one square foot of buildable area.
The Floor Area Bonus is in 17-4-1000 of the Municipal Code, available at:
http: I /www.atnlegal.com/nxt/gateway.dll/lllinois I chicagozoning/ chicagozoningordinanceandland
useordinanc?f=templates$fn =default.htm$3. 0$vid =amlegal:chicagozoning i1
Portland, Oregon
The City of Portland offers an Amenity Bonus for multi-family developments in order to promote
"family oriented multi-dwelling developments" in certain neighborhoods. Additional units are
allowed based on a calculation of the sum of amenities provided; each amenity is assigned a certain
bonus percentage amount as defined in the ordinance. Amenities include outdoor recreation
facilities, children play areas, 3-bedroom units, storage areas, sound insulation, crime prevention,
solar water heating, and larger outdoor areas.
The Amenity Bonus is described in section 33.120.265 of the municipal code, available at
http://www.portlandonline.com/auditor/index.cfm?c=28197&a=53296
Seattle, \Vashington
The City of Seattle offers incentives for both residential and non-residential development.
Residential developments can receive density and/ or height increases (depending on the zone) in
exchange for either providing affordable housing or purchasing bonus square feet at an established
rate per square foot. Non-residential developments have the option to either purchase additional
square feet or provide affordable housing or childcare facilities. To incentivize workforce housing,
the City also offers property tax exemptions for up to 12 years.
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Full details of these incentive programs are available at:
http://www.seattle.gov/housing/incent:ives/defaulthtm
Tampa, Florida
The City of Tampa has passed two ordinances that allow for density bonuses in exchange for a
range of public benefits. The first ordinance applied soldy to Planned Devdopment areas. It was
expanded in 2007 to include the Central Business District periphery area. In each neighborhood
where the density bonus is in effect, the City worked with Neighborhood Associations in order to
determine the public benefit priorities. A partial list of public benefits includes:
•
•
•
•
•
•
•
•
•
•
Affordable housing*
Public open space*
Transit support subsidy*
Enhanced public access to waterfront*
Enhanced streetscape design*
Increased sidewalk area/width*
Artist studio and indoor-outdoor performance space*
Child care center space
LEED Certified Construction .
Neighborhood serving cotntnercial/ retail floor area
For most of these benefits, the bonus is calculated at a 10:1 ratio; for each $1 of benefit the project
receives $10 worth of bonus. Starred(*) items in the above list are high priority for the City; they
receive an additional 0.1 FAR bonus beyond the 10:1 ratio calculations.
The two ordinances (Sec. 27-328 and Sec. 27-329) are described in detail in the Municipal Code
under Chapter 27, Article XIII, available at
http: //library.municode.com/index.aspx?clientld = 10132
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