07 Attachment 5 - August 12, 2020 Planning Commission Verbatim Minutes
LOS GATOS PLANNING COMMISSION 8/12/2020
Item #2, Town Code Amendment – BMP Program
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A P P E A R A N C E S:
Los Gatos Planning
Commissioners:
Melanie Hanssen, Chair
Kathryn Janoff, Vice Chair
Mary Badame
Jeffrey Barnett
Kendra Burch
Matthew Hudes
Town Manager: Laurel Prevetti
Community Development
Director:
Joel Paulson
Town Attorney: Robert Schultz
Transcribed by: Vicki L. Blandin
(619) 541-3405
ATTACHMENT 5
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Item #2, Town Code Amendment – BMP Program
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P R O C E E D I N G S:
CHAIR HANSSEN: We will move on to the next item
on the agenda, which is our public hearing, and that is
Agenda Item #2 which is forwarding a recommendation to the
Town Council for approval of amendments to Chapter 29,
which is Zoning Regulations, of the Town Code regarding the
Below Market Price, otherwise known as BMP, program. This
applicability is town wide. The Town Code Application is A-
20-004, and the Applicant is the Town of Los Gatos.
And I see Ms. Shoopman is our Staff person, so
would you like to make a Staff Report?
JOCELYN SHOOPMAN: Good evening. On January 28th
of this year the Policy Committee recommended amendments to
Chapter 29 of the Town Code regarding BMP regulations as
well as modification to the Town's BMP Housing Program
guidelines with the intent to increase the number of BMP
units by decreasing the opportunities to pay in lieu fees,
resulting in the construction of more onsite BMP units for
development projects.
The amendments as recommended by the Policy
Committee also include modifications proposed by the Town's
administrator of the BMP Housing Program, Hello Housing,
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who manages the daily operations of the program in
partnership with the Town.
There is also a Desk Item for this evening that
includes comments made by a Planning Commissioner.
Otherwise, this completes Staff's report and we
are available for any questions.
CHAIR HANSSEN: Thank you, Ms. Shoopman, and it
looks like Commissioner Hudes has a question for you. If
any other Commissioners have questions you can use the
raised hand feature or raise your hand and I will have you
speak. So, Commissioner Hudes.
COMMISSIONER HUDES: I just wanted to get a
little better understanding of how this fits with
affordable housing and the Town, and I think this might be
helpful not just to me but maybe to the public as well.
How does the BMP program relate to state housing
requirements, RHNA requirements, and if there's a state
program why do we have this? And what does it cost the
Town? The Town has, I believe, 174 units that have been
produced. Just some overall framing so we understand what
this BMP is about. Thank you.
JOEL PAULSON: Well, I'll give that a shot and
then if the Town Attorney or Ms. Shoopman has any
additional input.
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Backing up to the state, our Housing Element
cycle gives each area or region a regional housing needs
allocation. From that there is a body—currently right now
there is a Housing Methodology Committee body—who is going
to determine how those numbers will be split up among the
jurisdictions in the Bay Area. The numbers that come from
that are in numerous categories, so there are above-
moderate units, which is normal market rate units; there
are moderate units, which is below market rate; and there
are also low; very-low; and extremely-low categories. Those
numbers, when they are provided to the Town, are also
designated as a specific affordability level.
So, that is the number of units in each of those
categories the Town is expected to plan for over the eight-
year housing (inaudible) cycles, so that's how that is
generally handled.
Cost-wise, our Hello Housing contracts, I believe
the base is $70,000 approximately, and then it also has
additional fees that come in if they do work above and
beyond what's in the contract, including the resale of BMP
units; they handle that process as well. If you have any
other specific questions, I'd be happy to answer them as
well.
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CHAIR HANSSEN: So, Commissioner Hudes has more
questions.
COMMISSIONER HUDES: Just a follow up. We have
174 units that have come about in this program, I believe
some for sale and some rental, and this is a result of the
Town having this program and encouraging developers to
develop under it. What does it cost the Town in order to
get affordable housing in town?
JOEL PAULSON: I'm not sure I can quite follow
the question. The Town has had this ordinance in place, I
believe, since 1979, so when development that meets the
thresholds as they've evolved over the years, whether
that's a planned development or some other mechanism, once
they get over a certain number of units then they have to
provide Below Market Price units based on our ordinance.
A couple of other pieces of information.
Typically the for-sale units—I'll just give a hypothetical—
if you were required to do four BMP for-sale units then two
them would become moderate and two of them would become low
pursuant to our guidelines.
And in four rentals all the rentals are based on
the moderate-income level, so that's how the rental price
is set and every year the federal government provides those
rental rates for Santa Clara County.
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COMMISSIONER HUDES: Just if I could follow up.
So, to get this program basically the Town provides some
administration and there are some costs associated with
that, but the bulk of what it costs, almost all of it,
comes from developers, is that correct?
JOEL PAULSON: That's correct.
COMMISSIONER HUDES: Okay, thank you.
CHAIR HANSSEN: Do any other Commissioners have
questions for Staff?
TOWN ATTORNEY SCHULTZ: If I might?
CHAIR HANSSEN: Go ahead. The Town Attorney has a
comment.
TOWN ATTORNEY SCHULTZ: Let me just add that
while I think it is true that, yes, today almost all of it
comes from the development of projects that meet the
requirements to provide below market price housing, but if
you go through the historic of how we got to this issue of
providing for below market price housing a lot of that came
through the redevelopment agencies, and the money we got
through redevelopment, because a component of all the money
that we collected had to go towards affordable housing.
I'm not sure how much we have in that fund right
now but it's really still left over from the redevelopment
agency and it enabled us to buy certain properties like the
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Dittos Lane that's right now going through a BMP program.
So, before we actually went and purchased property or do
public/private partnerships with different housing
advocates, that's kind of dried up because we don't have
that redevelopment money.
So, now we do primarily rely on it. That's how it
came back, if you go way back to the redevelopment
agencies.
CHAIR HANSSEN: Okay. Thank you so much. I was
going to ask, it's sort of a question and a comment
combined. I had been involved on the Housing Element along
with a number of other Commissioners, the current Housing
Element is going from 2015 to 2023, and the issue with the
Housing Element has been that you plan for density in
certain locations in Town but it's incumbent upon
developers to make a proposal to build those units, and so
to me—and this is where my question comes in—it seems to me
that the Below Market Price Program is really the only way
we can be assured via our Town Code that when developers
come in that we can get at least a couple of affordable
units because they can offset their costs of the market
price units with the below market price units. Is that a
correct statement?
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JOCELYN SHOOPMAN: I would say that it's correct
in that this program relies on private developers who
propose applications to the Town, that propose a certain
amount of housing units, where then now these regulations
we can put in place and we can ask for the below market
rate units.
CHAIR HANSSEN: So, it seems like it's been
successful from the Town's perspective.
JOCELYN SHOOPMAN: I'll let Joel answer that, but
I would think yes.
CHAIR HANSSEN: All right, so that being the case
is there anyone else that has questions of Staff? Did I see
Commissioner Burch put her hand up? No. All right, well
then we will now invite comments from members of the
public. Do we have any members of the public that would
like to speak on this item?
JOEL PAULSON: For the member of the public we
now have two, and I see Heidi Owens' hand raised so I'm
going to allow her to speak.
CHAIR HANSSEN: Okay, Ms. Owens.
HEIDI OWENS: Hi, my question is if we can and why
we don't align the Below Market Price Program with those
different categories that you spoke about from the RHNA
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numbers? Why don't we have an extremely-low-income
requirement, et cetera?
CHAIR HANSSEN: Staff, you're probably the best
to be able to comment on this from the history perspective.
JOEL PAULSON: Thank you, and thank you for the
question. So, it is challenging enough for us to exact
moderate and low units out of developers to make that work.
Where you typically see the very-low and extremely-low
units, those are generally done in either partnerships, as
the Town Attorney mentioned before, public/private
partnerships, or by specifically affordable housing
developers who are looking to get tax credits for their
projects and that helps fund that as well.
It is very rare to see a just standard developer
come with either very-low or extremely-low units unless
you're talking about very extremely high-density projects
where there is a significant number of units which wouldn't
be probably viable in the Town, and then again with either
funds of a jurisdiction or the nonprofits who that's really
their business to create affordable housing and to be
competitive for those tax credits, they generally have to
get down into that very-low, extremely-low level to be
competitive with other projects vying for those credits as
well.
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And I'm not sure if the Town Attorney has any
additional thoughts on that. Yeah, it looks like he
doesn't.
CHAIR HANSSEN: I will jump in and say one thing
from the perspective of having sat on the Housing Element
Advisory Board. I remember very clearly that when we were
going through and trying to process our last RHNA that one
of the difficulties we had is I think it would have been a
desire of everyone to mandate more very, very low income,
but the feedback we got from the state, what I recall is
that we can't put a lot of restrictions on where they fall
in those buckets because the state views that as an
impediment to getting more housing built.
And, Mr. Paulson, if I'm incorrect let me know
but I remember that was kind of a big deal because we were
going through and saying why can't we force the issue a
little bit more but the answer was that's an impediment to
housing production, which is something the state doesn't
want.
JOEL PAULSON: Chair Hanssen, that's correct.
Again, they're always looking for jurisdictions to remove
barriers or impediments to housing production, so if we had
a program of that nature that looked at very-low or
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extremely-low as requirements of some percentage, then that
would be challenging.
I would say just one more kind of historical
point that I'm trying to think, and there are probably very
few instances where it actually came to fruition. The Town
used to have a requirement for a community benefit, and so
what some projects would do is, even if they were only
required to do a moderate unit they might make that a low
unit as an additional community benefit or make it the
price point at a level lower than what would be required by
our code, so just a little additional information.
CHAIR HANSSEN: Are there any other questions
from the public?
JOEL PAULSON: I do not see any other hands
raised. Give it a couple of seconds here. Seeing none, I
think we're ready to move on in discussion.
CHAIR HANSSEN: All right, so thank you, Ms.
Owens, for your question and we will now close the public
portion of the hearing and ask if Commissioners have any
additional questions of Staff, wish to comment on the code
amendments, or introduce a motion for consideration by the
Commission?
It looks like we have a few hands up. I saw Vice
Chair Janoff and I saw Commissioner Hudes.
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VICE CHAIR JANOFF: Thank you. Just a quick
clarification of the process. I've got four comments. Did
you want them at once? Well, three of them are questions,
one is a comment. You want them all at once or one at a
time, or how would you like to handle that?
CHAIR HANSSEN: I think it's fine to go ahead and
make all your comments at one time because we want to make
sure that every commissioner has a chance to talk about any
questions or comments that they have, and then hopefully we
move forward to a motion.
VICE CHAIR JANOFF: Okay, great. So, just real
quickly then, as a matter of format there are a whole bunch
of lists of bulleted items or numbered items. The
penultimate item as the term "and" afterward, which to me
is an all-inclusive rather than these are items on a list,
so some of them are not appropriate, some of them might be
appropriate.
I'll just point out on page 33 there's a
disconnect between the list at the top of the page and the
list that follows subsequently; there is or isn't an "and".
And then I'll just refer to pages 42, 43, 49, 50, and 51 as
having similar lists that may be confusing or overly
restrictive.
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My second comment is on page 47 there's an
example calculation regarding how to calculate the 80-
percent or 120-percent. We don't know what the assumed MFI
is and I think it would be clarifying for that number to be
included if it's just an example, so we know how the full
calculation is made.
Page 56, Item 3 says it requires the unit to
remain affordable for 30 years. I wasn't sure what that
restriction is. Is it a restriction on the loan or on the
rent? There's something confusing about that restriction.
Then finally page 55, Item 5, "Tenant rents and
incomes will be monitored annually." What happens if their
income goes up? To what end are they monitoring annually?
So just a question. I'm not sure if these need
discussion but just clarification, perhaps in the text.
CHAIR HANSSEN: So, how do you want to handle
questions? And I know Commissioner Barnett had quite a
number of comments that were in the same vein about making
things more clear, and he actually had proposed new
language, so how does Staff want to handle that? Because at
the end of the day the action by the Commission will be
either a recommendation to forward this to Town Council, it
could have changes along with it, or we could say that it's
not ready for that, but usually in the past when we've done
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this we pass along all the comments of the Commissioners
unless somebody disagrees. So, maybe Staff could help.
JOEL PAULSON: A couple of things. One is thank
you for the comments, Vice Chair; we'll take a look at
those and/ors.
To answer your last question, the guidelines
specifically talk about if you are in a rental unit and
your income goes up and you no longer qualify for the BMP
program, then what happens is you now have to pay full
market rate rental, and then the next unit that comes up
available for rent in that complex becomes a BMP for the
next person so that we always maintain the number.
And what I'll say is that it's not the same as
for-sale. So, you get into the program and you meet the
requirements and are successful in being selected and then
purchasing the BMP, your income can go up infinitely and we
don't obviously evict folks or make them sell the unit if
their income increases for for-sale.
VICE CHAIR JANOFF: Thank you for that.
CHAIR HANSSEN: Just to jump in as a follow up,
and Commissioner Hudes had a question. But when they sell
the unit it says in the code that they're going to sell the
unit at a below market price.
JOEL PAULSON: That's true.
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CHAIR HANSSEN: Even if they're affordability of
paying their mortgage and stuff during the time they owned
it has changed, they still are bound to sell it as an
affordable unit, and it's got to be that unit that they're
in, right?
JOEL PAULSON: Correct.
CHAIR HANSSEN: All right, so Commissioner Hudes,
go ahead.
COMMISSIONER HUDES: Thank you. First of all, I
think that the comments by Commissioner Barnett should be
part of whatever motion that we get to and so rather than
repeat them I'm going to go to some other questions. I was
kind of stumbling over the same things he carefully put
into his item. I did have a couple of questions that it
would be good to get a response on.
The first one is on page 8 in the last paragraph
where it talks about the employees working in town that
would be entitled to the program. We have very few
permanent employees these days at moderate- to low-income.
Many employers are keeping the hours of employees below 35
to avoid paying for healthcare. I had a couple of questions
about this because I think we're looking at a little bit of
a different workforce today. Are part-time workers who
might be working more than one job included? And I notice
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that in the definitions there a definition of self-
employed, but I wonder in this section whether self-
employed and sort of gig economy workers would be included
as well? That's the first question I had.
JOEL PAULSON: Well, those are great questions.
Most of these modifications for processing those things is
really handled by Hello Housing, so what we'll do is we
will get that information and get it back to you. But we
also raised that issue as depending on the action of the
Planning Commission tonight and we can figure out how they
exactly define that and whether or not people who are part-
time maybe in Los Gatos and San Jose and Campbell or in
multiple jurisdictions, then how is that handled? As well
as the gig economy workers who may do work in town but they
do work all over the place. So, those are good questions
and we definitely can get an answer to that from Hello
Housing.
COMMISSIONER HUDES: Great, thank you. I had a
couple others. Should I keep going, Chair?
CHAIR HANSSEN: Go ahead, because I don't see any
other Commissioners that had their hands up at the moment.
COMMISSIONER HUDES: Okay. So, this one is
probably the bigger thing I wanted to sort of get my head
around and that is we're raising the limit so I assume that
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that will get more people into the pool, and I'm a bit
concerned about how do we protect the ability of the really
low-income folks to participate in this program if we're
pulling in a lot more folks? One of the ways, it seems, is
the point program. So, my first question on this is that
Item C on page 10, is that the only way that we
differentiate between the income of everyone who is jumping
into this pool, the 60-percent gets an extra point?
JOEL PAULSON: I believe so, and I would just
look to Ms. Shoopman to confirm that.
JOCELYN SHOOPMAN: Yes, that's the only bullet
that is going to differentiate.
COMMISSIONER HUDES: So, I guess the question I
raise, which I think is kind of a big question, is by
increasing the 120-percent of median doesn't that cause us
to have less of a preference for people who previously may
have been available in the low- and very-low-income and
decrease their chances of getting affordable housing? My
question is should we allocate more points equitably based
on income, for instance, six points for very-low, four
points for low, to allow these folks to compete with the
larger number of people in the pool. It's not a technical
question; it's more sort of a policy question that I'm
raising here. Does that make sense though?
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JOCELYN SHOOPMAN: It does, and I will say to
give some context when the Policy Committee considered this
in their November meeting part of that meeting included
input from the Applicant for 20 Dittos Lane who was
proposing the teacher housing, and part of her conversation
in that meeting was that many of these teachers were in the
80- to 120-percent median family income range, and so based
on our current guidelines they go up to 100. Those
teachers, janitorial workers, office administration
wouldn't be able to meet the program, and so that was part
of the conversation of raising it to 120. Also, that would
be in line with the RHNA numbers for the California
Department of Housing.
JOEL PAULSON: So, I just offer a little bit more
on that, Commissioner Hudes. The predominant majority of
the state as well as how they designate different income
categories goes up to 120. The Town's was 100. At 100 you
actually have a pool that is pretty limited, but on the
for-sale units they also have to qualify. The reality is
that if someone is in the 60-percent and this was a
moderate unit, they're not going to qualify just from an
income to mortgage ratio standpoint. I don't know that it's
taking away from those folks' opportunities. What really
would be necessary is for us to have some private
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developers, some of the nonprofits, come in and have units
designated specifically for those categories, because then
what that does is that gets rid of everybody else who is
above and so that pool is on equal footing, because that's
what they're doing.
The Town Attorney has probably looked at this
more recently than I, but just as an example the 50 below
market rate units in the North Forty project, 49 of those
are either very-low or extremely-low, and I can't remember
if it's very-low and extremely or it's low and very-low,
and I think there's one moderate unit for the manager who
will be onsite. It allows more people to qualify up to the
120, and it really does, as Ms. Shoopman mentioned, kind of
gets us in alignment with how the state defines those
income categories.
CHAIR HANSSEN: Go ahead, Commissioner Hudes.
COMMISSIONER HUDES: I just am raising this
because we think we're doing a good thing by opening the
pool to more people but since we have very few units that
actually come up we may be having the unintended
consequence of limiting the opportunities for the lowest
income people, and as you point out the issue isn't I don't
think so much with the purchase units but the predominance
is on the rental units. So, I don't know whether what I've
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suggested would make sense or not, we could save that for
discussion, but I just am concerned about an unintended
consequence of opening the pool.
I had one more sort of real quick technical
point.
CHAIR HANSSEN: Okay, go ahead.
COMMISSIONER HUDES: And that's on page 11, the
first paragraph, that sentence, it seems it might be more
straightforward to just say, "If an applicant twice refuses
to purchase an available unit they will be removed from the
current applicant pool." The way it's worded, especially as
it's been revised, is not so clear.
JOEL PAULSON: Okay, we can look at simplifying
that language.
COMMISSIONER HUDES: And that's all I had. Thank
you.
CHAIR HANSSEN: If no other Commissioners had
questions, I had a couple questions. Let me just check; one
second.
First of all, I wanted to say after I ask my
other two questions I want to get some feedback from other
Commissioners on the issues that Commissioner Hudes raised,
which is is this the most equitable way of allocating those
below market price units and is it negatively affecting the
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lower income people by raising the limit? So, I'm hoping
that some other Commissioners will have some comments on
that but I had two kind of quick questions.
I might not be interpreting this correctly but
whereas in the hillsides we might not have forced a below
market price unit, if I'm understanding this correctly like
the next time we see one of these eight-unit development
proposals in the hillsides that they're going to be
required to do at least one below market price unit, right?
JOCELYN SHOOPMAN: The previous language stated
that hillside projects shall only pay in lieu fees. That
language was struck out. It still leaves the possibility
for them to pay an in lieu fee if they can provide
justification that a BMP unit in that development would not
be viable.
CHAIR HANSSEN: Okay. My next question was going
to kind of go along that vein. Generally when we've seen
these five- to eight-unit developments that we're talking
about $3 and $4 million houses, so I wasn't knowing how the
math would ever work when you have these $3 and $4 million
dollar houses to make it affordable for someone that's
making even 120-percent of the market income. So, I think I
understand the thing behind it.
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But so the other thing that I noted is that the
in lieu fees, generally this proposed language is going to
make it more restrictive towards making a BMP versus having
the option of opting out based on paying in lieu fees, but
if you read the code, it's fine, but if you read the
document it sort of seemed like oh, well if you have any
problems regardless of whether you're in the hillsides or
not that you can get Town Council approval to do the in
lieu fees, and I just wondered if that was a good thing if
we're trying to make it tighter and get more BMPs versus
having people pay into in lieu fees? Is that going to be
tight enough?
JOCELYN SHOOPMAN: I'm sorry, so were you
referring to the language in the Town Code as not being in
line with the guidelines?
CHAIR HANSSEN: Well, I might have interpreted it
incorrectly but the Town Code was pretty clear that that
was only for the hillsides where they could potentially do
in lieu fees, and as I was reading the guidelines it
sounded more open to me, so maybe I misinterpreted it. Let
me ask the clarifying question though. The intent is the
only people that can ask for in lieu fees are going to be
people that are developing in the hillsides, is that
correct?
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JOEL PAULSON: I think you're looking at the Town
Code section which specifically talks about HR, and then on
pages 2 and 3 of the guidelines—and that's the number of
page, not the page in the PDF—they talk about HR only, or
residential projects conversion, and all developments with
five to nine units with an underlying of HR as well. So, it
looks like that's covered both on the code and the
guidelines. but we'll take another look at it as well prior
to getting it to Council just to confirm.
CHAIR HANSSEN: Perfect. Okay. Now, Commissioner
Burch had her hand up.
COMMISSIONER BURCH: Thank you. I have a couple
of questions, if that's okay.
One item had to do with the section concerning
the resale of a below market home and my question was if
the property owners did some work on the house, an addition
or something that actually increased the value of the home,
before that is sold does the Town do an updated assessment
and then set the allowable resell value?
JOEL PAULSON: I'll jump in unless Ms. Shoopman
has something to say first, but generally what happens is
Hello Housing, there are specific calculations that are
used for upgrades, whether that's upgrading appliances,
upgrading finishes, things like that, adding air
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conditioning if there wasn't air conditioning. And then
there is also a depreciation scale that they use, and so
they determine what if any value is still left depending on
how long ago those were installed and the cost of those
installations.
I am trying to recall, but I don't recall ever
having seeing an addition to a BMP. Typically what we get
is they replaced their carpet with hardwood, or they put in
air conditioning where they didn't have it, things like
that. But yes, there is some flexibility there and a
process to handle that increase in value that would not
otherwise be (inaudible).
COMMISSIONER BURCH: Chair, do you mind if I ask
just a couple more?
CHAIR HANSSEN: Go ahead.
COMMISSIONER BURCH: All right. On page 38 in
discussion with the in lieu fee, how was 6-percent
determined to be the correct percentage?
JOEL PAULSON: That I don't know. That's what
it's been ever since I've been here, 20-plus years, but I
do not know the origins unfortunately of that number.
COMMISSIONER BURCH: I thought that might be the
answer. Historically does that feel appropriate?
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JOEL PAULSON: We think it's appropriate, and
that in combination with the fact that we are now making it
extremely hard and only in the hillsides to allow in lieu
fees. And that was the Policy Committee's (inaudible) as
well is we really want the units produced, we don't have a
whole lot of large development in town in the first place
to get BMPs, and so I think we have somewhere in the
neighborhood of $3.5 million in our BMP in lieu fee fund,
and so the reality is if the Town…
And we do have documents and there will probably
continue to be conversations of how to use that money. I
think some of it is being used for the Dittos Lane
projects, so that's generally what we use it for, and then
we use it for the administration of the BMP Program, which
currently there is an RFP out because every five years
approximately we go out and see if the current provider
still is kind of the appropriate provider for those
services, so we're going through that process currently as
well.
But it doesn't accrue much money. There's still a
handful. I think we have probably five more in the hillside
PD, and then I think the in lieu fees were also allowed for
Greenwich Terrace, which is eight lots, so other than that,
unless we get subdivisions in the hillside we're going to
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be asking for the units, and the only opportunity for the
in lieu fees is in the hillsides and that's going to be
even more limited for a number of reasons, not to mention
fire and our own regulations, so we still think that that's
viable. Our provider hasn't (inaudible) is low or high, so
I think we're comfortable at this point moving forward with
that number and we'll reach out to them again to see if
there are any newer thoughts.
COMMISSIONER BURCH: So then I would wonder if
there's not a way to put some language around maybe
evaluation periods on that 6-percent. We do know how
property value goes around here and ensuring that if you
are getting this from developers, and I get that it's in a
very limited scope, but just ensuring that what you get
really does match the current financial conditions of the
real estate market so that it can be put to good use. I'm
not saying it needs to be changed, I just wondered if
there's a way we could put some kind of language around an
annual or every five year reevaluation of that percentage
and its applicability to the current market?
JOEL PAULSON: We could do that. What I will say
is that every time you want to reevaluate it we have to do
a brand new nexus study, which means hiring a consultant,
having them go through that and provide information, so
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it's not something we can just change or have Staff ability
to modify or do that work on our own.
COMMISSIONER BURCH: Right.
JOEL PAULSON: The other thing I can offer is
that it depends on the development, but hillside
developments specifically is where the majority of those
funds come from historically, and it's actually most of
those folks. They'll get the planned development and
they'll get the subdivision, they sell the individual lots,
then the homeowner pays those fees because they're the one
who comes forward with the house, so it's not the developer
paying that up front.
Now, there is some negotiation with price, with
that factored in, so they may that conversation when
they're selling those lots to potential homeowners. I'm not
sure, I'm assuming there is because otherwise every time
someone had to pay that fee I'm sure we'd hear a lot more
than we currently hear regarding that issue.
CHAIR HANSSEN: To follow up on what Commissioner
Burch was asking, I mean you said it wasn't a problem, so
in your opinion and Staff this 6-percent has been enough of
a deterrent that do we typically get the people to… I mean,
from what I've seen on Planning Commission we typically get
them to do the BMP, so we haven't seen that many people do
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the in lieu fees that are not in the hillsides in like the
last five years?
JOEL PAULSON: No, absolutely not.
CHAIR HANSSEN: Okay, so at the moment it seems
like the 6-percent is enough of a deterrent that they're
better off financially doing the BMP than they are…because
they're going to make whatever decision is the least amount
of money to them, right?
JOEL PAULSON: Well, so that's probably a
stretch. Using your analysis of let's just say a $2 million
house, they're going to pay the BMP fee for that because
they would have to subsidize that home if they constructed
it significantly. Probably the most recent example is the
homes that went up off of Knowles, the old county
courthouse site. Those were not small homes, they're not
hillside homes by any means, but I think the moderate units
there were like they had to sell them for $448,000,
somewhere in that neighborhood. That probably barely, even
in a flatland project, covered their construction costs.
But in a hillside there are a number of other
factors as well. Typically our hillside lots are larger
lots, typically larger homes. If someone was going to build
those in the hillside I imagine they would come in asking
for a smaller lot and a smaller home, just because the
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other is if you're going in and you qualify for the Below
Market Price Program you're not going to have the extra
money to have a gardener or landscaper take care of that
big property and then utilities and other things that go
into it just sheerly based on the size of the home, those
would be burdens to our below market price folks to try to
be able to even maintain that.
They're private roads, there could be common
area/open space that would have HOA fees that would be very
high, so those are all some of the challenges that we have,
but I think we're going to see less and less of this and
they're going to ultimately probably have to go all the way
to the Council if they want to try to pay the in lieu fee
even for an HR (inaudible).
CHAIR HANSSEN: Just one quick question. The
housing that's going up on Union Avenue across from
Safeway, I know we heard about that. I'm trying to
remember. It was under the Housing Accountability Act, but
because it was nine units do they have to do a BMP?
JOCELYN SHOOPMAN: They do, so they are doing a
BMP above the mixed-use building.
CHAIR HANSSEN: Yeah, I thought that was the
case. So, then that says that part is working, that we're
getting people to do the units where it's not in the
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hillsides, so I guess we'll have to see what happens with
the hillsides, but I think Commissioner Burch had a good
point worth considering. I don't know if it is financially
feasible for the Town to keep looking at it, but since
we're changing some of the dynamics we might need to at
least keep our eye on it. Now, Commissioner Badame has her
hand up.
COMMISSIONER BADAME: Thank you. Mr. Paulson, you
reminded me of the planned development—actually, I was on
the Planning Commission at the time—for Knowles near
Pollard. Can you remind me how many BMP units we got out of
that planned development?
JOEL PAULSON: Four.
COMMISSIONER BADAME: Thank you.
CHAIR HANSSEN: Commissioner Burch has her hand
up again.
COMMISSIONER BURCH: Sorry.
CHAIR HANSSEN: Don't be sorry.
COMMISSIONER BURCH: Mr. Paulson just reminded me
though of one of the things I wanted to ask about. On page
41 there's actually a note about HOA fees. It's Item C.
JOEL PAULSON: What page is that on, the
document?
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COMMISSIONER BURCH: That is on 41. It where an
applicant has to demonstrate the ability to pay things
based on exactly what you were just saying. Like I would
assume people that are looking at BMPs, even if it was in a
development that had an HOA I feel like they probably
shouldn't be expected to pay an HOA fee. Does the Town have
the ability to dictate that or is that a developer right?
JOEL PAULSON: I'd probably defer to the Town
Attorney but I don't think that's something that we can
require the developer that any BMP does not have to pay HOA
fees. They're still using those facilities as well, but I
have not heard that that's an ability of the Town unless
Mr. Schultz has some additional information.
TOWN ATTORNEY SCHULTZ: I've never seen it but we
can look into it. We'll put that on the list when it goes
to Council. I have not seen it where that's happened. I
used to have all sorts of concerns like when the roof has
to be repaired if that unit hasn't provided the funds for
that fix you're asking all the other neighbors that have
chipped in their funds to pay for that neighbor's ability.
COMMISSIONER BURCH: Or even if the HOA fee could
be…
JOEL PAULSON: Reduced.
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COMMISSIONER BURCH: …correlated more to the
value of the home for that person maybe, I'd be curious.
TOWN ATTORNEY SCHULTZ: The issue for ownership
is really to integrate them, and so if they weren't paying
anything to the homeowners association would that mean they
wouldn't be able to sit on the board?
COMMISSIONER BURCH: Yeah, you're right.
TOWN ATTORNEY SCHULTZ: But we can look into it.
I mean, it's an interesting concept, because ownership of
BMPs is a trouble in any town and city because paying the
HOAs, we've had a few where they've fallen tremendously
behind on that and had to bail them out and find someone
else to bail them out, and so maybe it is something we need
to look at to see if there's any way we can incorporate
that into some of the larger developments.
COMMISSIONER BURCH: Right. Thanks. And then I
just had one more, Chair, and then I'll stop.
CHAIR HANSSEN: No, that's fine.
COMMISSIONER BURCH: On page 44, Item 3A, I was
actually just wondering if maybe Mr. Paulson could explain
that one to me. I understood pretty much everything within
the point system. That one I wasn't following along, so
it's like for people that lived in the Town but then moved
out?
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JOEL PAULSON: That's been in our guidelines for
quite a while, ten years and moved out of town, (inaudible)
application.
TOWN ATTORNEY SCHULTZ: That's usually it's maybe
who had lived here more than ten years and then they have
maybe been gone just for a year or two. You don't have to
be gone ten years but at least within the last ten years
you've moved out maybe because you couldn't find rent in
this area, now you want to move back in.
COMMISSIONER BURCH: Oh, okay.
TOWN ATTORNEY SCHULTZ: But you couldn't go more
than ten, so if you lived here for 11 years and then were
gone for 11 years, you don't get the two points, but if
you've been here 11 years and you've been gone less than
that ten years, then you'd get the two points.
JOEL PAULSON: It's really I think (inaudible)
displacement, right?
TOWN ATTORNEY SCHULTZ: Yeah.
JOEL PAULSON: So if someone gets priced out of
the market and has to move to an adjacent jurisdiction
because they can get rent affordably, if a BMP unit comes
up back in town where they've lived for quite some time you
want to be able to provide them that opportunity and I
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think that's probably why those points are in the
guidelines.
COMMISSIONER BURCH: Okay, thanks. That makes
more sense. Thank you.
CHAIR HANSSEN: Did you have any more questions
at the moment?
COMMISSIONER BURCH: (Inaudible) I can't promise
(inaudible).
CHAIR HANSSEN: That's fine, because we should
answer all of your questions. So, do any other
Commissioners have questions at the moment? It looks like
Commissioner Barnett. I'm hoping to hear from some of the
other Commissioners about the points that Commissioner
Hudes brought up, and so let me go to Commissioner Barnett
for what comments he has.
COMMISSIONER BARNETT: Speaking to that point, I
was wondering if Staff could help out with some notion of
how many of the BMP applicants for purchase or for rental
are at certain income levels that we can already define?
JOEL PAULSON: A couple of things. One is
rentals. Currently you have to be at 80-percent or below
the median income for Santa Clara County, and so kind of
getting back to Commissioner Hudes' point is yes, this does
expand that pool, but as the sheet will mention this was in
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direct response to an issue that comes up quite often with
in this instance the teacher housing that was being done at
Dittos Lane.
For the for-sale units you have to fall into one
of those categories. Right now it's moderate or low is
typically what we see. If you have more than one unit then
the units get split between those two categories and then
you have to be in that income bracket so 100-percent of
people qualify for each of the income levels that apply for
that.
CHAIR HANSSEN: Okay, so did that answer your
question, Commissioner Barnett?
COMMISSIONER BARNETT: Yes, it does.
CHAIR HANSSEN: Okay. So, just to kind of do a
(inaudible) on where we are right now, because we had lots
of good questions and comments so far. Our objective for
this hearing is that we're supposed to make a
recommendation to Town Council, and in doing so if we're
recommending that they move forward with this it can be
with comments. We do need to make the findings that are
spelled out in the Staff Report in CEQA and compliance with
the General Plan.
So, that being the case we can take a number of
directions, and when we've done these studies in the past
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we usually forward it along even if it's positive but
please consider all these things that we brought up. But we
could also say it's not ready and it needs to go back to
the Policy Committee and that's the most negative scenario,
so I wanted to put that out there in terms of moving the
discussion forward, and Commissioner Hudes has his hand up,
so go ahead.
COMMISSIONER HUDES: I'm prepared to summarize
into a motion if we're at that point, or if there are other
important points that folks would like to raise I will just
wait a bit.
CHAIR HANSSEN: Well, Commissioner Janoff has her
hand up so I'm going to take her comments, but I would say
that it would be a good idea to try to get a motion out
there to see where the Commission is, to see if we need to
modify things. So, Vice Chair Janoff.
VICE CHAIR JANOFF: Thank you. I just wanted to
say that I thought Commissioner Hudes' concerns about the
increase on the upper range is an interesting question and
we really don't know the answer because it's untested, and
I'm wondering whether it's possible to have a revisit with
a small report of some sort that can… If we decided to go
forward in supporting the larger range could we ask for a
report in an appropriate period of time that says this has
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boxed a lot of people out or it's provided new
opportunities for people to get in, just so we know whether
this has been a constructive change or a not constructive
change? I think that it's an interesting point and we don't
know how to test it now; we won't know until we have some
data.
Then generally speaking I think the comments that
have been raised tonight have been very constructive and
clear. I would support forwarding this to the Town with
those comments to be considered.
CHAIR HANSSEN: Thank you very much for your
comments. So, Commissioner Hudes, if you wanted to make a
motion, that would be great.
COMMISSIONER HUDES: Yeah, actually I wanted to
start with one more comment and then I'll include it in the
motion, but I wanted to get it on the table first.
I don't think we have enough affordable housing.
I think the program is very important and I think we're
going to be pushed with a lot of numbers to reach and I
think it's going to be important that we create affordable
housing opportunities.
These numbers of how many units a developer has
to build were developed a long time ago. The profit on
development in town has gone up, we know that, and so I
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would add a question of whether it might be appropriate to
look at raising the number that needs to be created, the
amount of housing, by perhaps 10-percent? So, whatever
formulas that we're using today, for instance a 5:19
requires 10-percent; perhaps it should be 11-percent so
that we actually end up getting more housing.
Now, it's pretty controversial and a big thing so
I'm going to hold off on the motion in case folks would
like to comment on that, but it seems to me that while
everything has gone up, yes, costs have gone up, prices
have gone up, but profits have gone up as well and so
perhaps there's an opportunity to take a look, maybe even
surveying what other municipalities are doing to see if we
can get more affordable housing created.
JOEL PAULSON: Through the Chair?
CHAIR HANSSEN: Go ahead.
JOEL PAULSON: Commissioner Hudes, I think that's
a great idea and recommendation. I think basically you're
recommending that the percentages for the various
categories be reviewed and potentially increased. We would
have to perform a nexus study to do that. I know a number
of other jurisdictions in Santa Clara County have done that
recently; the Town did not participate in that action and
that was over the last few years, but we might be able to
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use some of that base information if it's not stale to go
out and do an RFP or RFQ for a nexus study for the
potential to increase our BMP requirements to hopefully get
more units.
CHAIR HANSSEN: And Vice Chair Janoff has a
comment, and I do as well, so go ahead.
VICE CHAIR JANOFF: Just in light of those
comments, Director Paulson, do you know the outcome? Do you
know whether those numbers have been increased or
decreased? I mean, I'm sensitive to your previous comments
that we are wanting to not disincentivize the building of
affordable housing, so do you have any idea or any
information about what changed or didn't change with the
municipalities who conducted those studies?
JOEL PAULSON: I don't, but we can look at it. I
know that there are some jurisdictions that have higher
minimum requirements, 15-percent or maybe a few of them
have 20-percent, that's just across the board. Ours doesn't
start at 20-percent until I think you get over 100, but we
can take a look at a couple of those studies before it goes
to Council and move forward that information with that
question from Commissioner Hudes.
CHAIR HANSSEN: I had the same thought. I liked
Commissioner Hudes' suggestion, but from a big picture
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perspective I'm thinking that we ought to try to get this
thing… It's going to be improved by the language changes
that have already been proposed without the additional
recommendations of the Planning Commission, so I think we
can add onto that, but the one thing we have to balance it
with is the research in the market that we're not going to
deter any production of affordable housing by squeezing the
developers more, but at the same time if a market supports
it we should try to do that.
I don't know at what point this is going to
Council but if it's possible to do that before that I think
it's worth looking at, but I don't want to stand in the… My
personal feeling is I don't want to stand in the way of
getting the code somewhat tighter even if there are to-dos
that go along with it. So, Commissioner Hudes had a
comment.
COMMISSIONER HUDES: I'm prepared to make a
motion to incorporate that idea, if that's okay.
CHAIR HANSSEN: Okay, go ahead.
COMMISSIONER HUDES: I move that we forward a
recommendation to the Town Council to approve the changes
as provided by Staff with the additions of the comments of
the Planning Commission, and I want to highlight several
changes that I think need to be pretty explicit.
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The comments from Commissioner Barnett, as
written.
Commissioner Burch's comments about valuation, in
particular resale considerations.
Director Paulson's commitment to take a look and
do some research on part-time and gig workers.
Specifically the consideration of looking at
additional points for different income levels in the
formulation, and again, this is not explicit to change it
but to look specifically at five points for 60-percent and
three points for 80-percent as something for the
consultants to look at to try to balance this and give a
better opportunity for low-income residents to participate.
Consider increasing the number of units by doing
a survey of other communities to see whether it would be
possible to raise the requirements by 10-percent across the
board.
So, those are the ones that I captured that I
highlighted. There might be others, maybe somebody would
like to add them to the motion, but that's the motion as I
have it.
CHAIR HANSSEN: Are you able to make the findings
that are spelled out in the Staff Report?
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COMMISSIONER HUDES: Yes, I would include those
findings.
CHAIR HANSSEN: Okay. So, let's see if there are
any Commissioners that would want to second the motion and
then we could always ask for modifications before we vote.
Commissioner Badame.
COMMISSIONER BADAME: I would second the motion
based upon the additions made by Commissioner Hudes.
CHAIR HANSSEN: Okay, so we have a motion and a
second. Before we take a vote though this might be a good
time to take any additional comments if there are
Commissioners that thought there is anything in addition to
what Commissioner Hudes had to say or if you had any
additional comments that you haven't already made about
this motion in general, this would be a good time to do it
before we take a vote. So I wanted to see if any other
Commissioners… But everyone had contributed suggestions so
I think we're okay. I don't see any hands raised.
So, that being the case we have a motion and a
second. Did I miss any? Okay, right. So then we'll do a
roll call vote and I will start with Commissioner Badame.
COMMISSIONER BADAME: Yes.
CHAIR HANSSEN: And then Commissioner Burch.
COMMISSIONER BURCH: Yes.
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CHAIR HANSSEN: Okay, Commissioner Hudes.
COMMISSIONER HUDES: Yes.
CHAIR HANSSEN: Commissioner Barnett.
COMMISSIONER BARNETT: Yes.
CHAIR HANSSEN: Vice Chair Janoff.
VICE CHAIR JANOFF: Yes.
CHAIR HANSSEN: And then I vote yes as well, so
the motion passes unanimously, and Mr. Paulson, are there
any appeal rights for this decision?
JOEL PAULSON: There are not appeal rights as
this is a recommendation.
CHAIR HANSSEN: Okay, thank you very much. And
thank you for everyone for all your comments, because I
think they were really helpful and will help shape this
into a better solution for our town.
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