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Linda C. Klein
415.262.5130
[email protected]
File No. 101136
November 7, 2023
VIA E-MAIL
Mr. Noah Housh
Director of Community Development
City of Cotati
201 West Sierra Avenue
Cotati, CA 94931
[email protected]
Re: State Density Bonus Request Letter for Redwood Row Project Dear Mr. Housh:
On behalf of our client, City Ventures, we are submitting this State Density Bonus Law (“SDBL”) request for City Ventures’ proposed mixed use project consisting of 167 residential units and approximately 10,000 square feet of commercial space (the “Project”).1 The Project would front on the Gravenstein Highway, just to the west of U.S. 101 and south of the Lowe’s Home Improvement (APN Nos. 046-286-017 to -020) (the “Property”), in the City of Cotati (the “City”). Thirty-four units would be affordable rental units, with at least eight of these 34 units offered at levels affordable to very low income households.2 As set forth below, the Project qualifies for a density bonus, incentives and concessions, and waivers. This letter is organized in three parts. Part 1 describes the Project’s qualification to request the benefits provided under the SDBL, including a density bonus in the first instance.3 Part 2 provides a legal summary of provisions in the SDBL regarding incentives, concessions, and waivers. Part 3 identifies City Ventures’ specific requests under the SDBL for the Project. It also reserves the right to update and/or amend these requests in the future as needed. 1 The Property previously was mass graded in connection with an approved shopping center project. 2 The remainder of these 34 affordable units would be divided, first, according to the City’s inclusionary housing requirements, with the remaining 10 units distributed across RHNA income categories. 3 The City also has a local density bonus ordinance. In the event of conflict, state law controls.
Noah Housh
November 7, 2023
1. Project Qualification Under the SDBL
The SDBL applies to “housing development” projects4 that provide on-site affordable housing and offers four categories of benefits: increased density over the maximum residential density that otherwise would be allowed; certain incentives and/or concessions; waivers; and an option to use certain vehicular parking ratios. (Gov. Code, § 65915.) The density bonus and the number of incentives and/or concessions depends on the number and type of affordable units.
The first step in determining SDBL benefits is to calculate “base density.”5 The Property has a General Plan land use designation of “General Commercial” (“GC”) and is located in the “Commercial, Gravenstein Corridor” (“CG”) zoning district (Muni. Code, § 17.20.030.B), both of which allow for mixed use residential uses at a density of up to 15 dwelling units per acre.
Applied to the 10.41-acre Property, this results in a “base density” of up to 157 residential units for the Project (i.e., 10.41 acres x 15 du/acre = 156.15, rounded up per the SDBL to 157 units).
Note that, under the SDBL, each component of any density calculation resulting in fractional units, including “base” and “bonus” densities, is rounded up to the next whole number. (Gov.
Code, § 65915, subd. (q).) This state law provision would take precedence over any local provision directing a density calculation to be rounded down. Even if rounded down to 156 units, however, the Project would still comply with any ultimate density bonus calculation.
The second step is to determine the percentage and level of affordable units. The Project proposes to set aside at least eight units at levels affordable to very low-income households.
These units, which are five percent of the “base” density, entitle the Project to a 20 percent density bonus. (Gov. Code, § 65915, subd. (f)(2).) Applied to the Project, this would allow for up to 189 residential units (157 x 1.2 = 188.4, rounded up to 189), which in turn provides for the Project’s 167 total units. In addition, the Project also would be entitled to receive one incentive or concession (id. § 65915, subd. (d)(2)(A)), an unlimited number of waivers (id. § 65915, subd. (e)(1)), and the use of certain parking ratios (id. § 65915, subd. (p)), as specified below.
2. Incentives, Concessions, and Waivers
(a) Incentives and Concessions
An incentive or concession is a reduction in development standards or modification of zoning or architectural requirements, or any other regulatory incentive or concession proposed by the developer, that results in identifiable and actual cost reductions to provide for affordable housing costs. (Gov. Code, § 65915, subd. (k).) The California Housing and Community Development Department (“HCD”) has taken the position that the SDBL “clearly indicates that requirements beyond development standards are eligible” as incentives or concessions, including 4 A “housing development” is defined for purposes of the SDBL as “a development project for five or more residential units, including mixed-use developments.” (Gov. Code, § 65915, subd. (i).) 5 “Base density” under the SDBL means “the maximum number of units allowed under the zoning ordinance, specific plan, or land use element of the general plan.” (Gov. Code, § 65915, subd. (o)(6).) Noah Housh
November 7, 2023
“regulatory requirements,” provided that the request has identifiable and actual cost reductions. (HCD Letter of Inquiry and Technical Assistance to City of San Jose, Dec. 14, 2021, at p. 3.6) Courts have explained that an applicant is not required to prove that a requested incentive or concession would lead to cost reductions. Rather, specific requests are “presumed” to result in cost reductions, and an agency bears the burden to demonstrate otherwise if it intends to deny a request. (See Bankers Hill 150 v. City of San Diego (2022) 74 Cal.App.5th 755, 770 [citing Schreiber v. City of Los Angeles (2021) 69 Cal.App.5th 549, 555].) Likewise, while an applicant may be required to provide a basic explanation as to why a project is eligible to receive an incentive or concession (e.g., drawings and the like), an agency cannot require preparation of a supporting report or study. (See, e.g., HCD Notice of Violation to City of Encinitas, March 25, 2021, at pp. 3–4 [“The Legislature was clear that no additional studies, reports, or analysis were to be required.”].7) Cost reductions, HCD has noted, “should be apparent from the project application, thus negating any need for ‘financial analysis or report.’ ” (Id.) An agency must grant an incentive or concession unless it can make written findings, based on substantial evidence, according to certain statutory limitations. The only reasons to deny an incentive or concession are if: (i) the incentive or concession would not result in identifiable and actual cost reductions; (ii) the incentive or concession would have a specific, adverse impact on public health and safety, and there is no feasible way to mitigate or avoid that impact without rendering the development unaffordable to low income and moderate income households; (iii) the incentive or concession would have an adverse impact on any real property listed in the California Register of Historical Resources; or (iv) the incentive or concession would be contrary to state or federal law. (Gov. Code, § 65915, subd. (d)(1).) The agency bears the burden of proof for the denial of an incentive or concession. (Id. § 65915, subd. (d)(4).) (b) Waivers
In addition to incentives or concessions, a developer may request waivers of any development standards that would have the effect of physically precluding the construction of a development at the density or with the incentives or concessions permitted by the SDBL. (Gov.
Code, § 65915, subd. (e)(1).) “Development standards” are defined broadly as “a site or construction condition, including, but not limited to, a height limitation, a setback requirement, a floor area ratio, an onsite open-space requirement, or a parking ratio that applies to a residential development pursuant to any ordinance, general plan element, specific plan, charter, or other local condition, law, policy, resolution, or regulation.” (Id., subd. (o)(1).) Waivers can be requested for “any development standard that will have the effect of physically precluding the construction of a development” that meets the SDBL’s minimum affordable requirements “at the densities or with the concessions or incentives permitted by [SDBL].” (Id., subd. (e)(1).) 6 https://www.hcd.ca.gov/community-development/housing-element/docs/sclSanJose-LOI-TA-121421.pdf. 7 https://www.hcd.ca.gov/community-development/housing-element/docs/sdiencinitas-nov-densitybonus03252021.pdf.
Noah Housh
November 7, 2023
An applicant is entitled to unlimited waivers. (Id.) A local government may deny a requested waiver under certain, limited circumstances. Specifically, a local government may deny a requested waiver only if granting the waiver “would have a specific, adverse impact . . . upon health or safety, and for which there is no feasible method to satisfactorily mitigate or avoid the specific adverse impact” or “would have an adverse impact on any real property that is listed in the California Register of Historical Resources, or to grant any waiver or reduction that would be contrary to state or federal law.” (Id.) Conditions that would have a specific, adverse impact upon the public health and safety “arise infrequently.” (Id. § 65589.5, subd. (a)(3).) A local government can require “an applicant to provide reasonable documentation to establish eligibility” for a requested waiver or reduction of a development standard. (Id. § 65915, subd. (a)(2).) According to HCD, the “showing or ‘reasonable documentation’ required by the applicant is that the project qualifies for a density bonus.” (HCD’s Notice of Violation Letter to the City of Encinitas, Jan. 20, 2022.8) HCD also has concluded that “[a] project that meets the requirements of the [SDBL] is entitled to waivers if they are needed, ‘period.’” (Id., quoting Wollmer v. City of Berkeley (2011) 193 Cal.App.4th 1329, 1346–1347.) A recent Court of Appeals case has further confirmed that a local agency cannot deny a requested waiver based on whether a developer could have designed its project in a way that minimizes the need for requested waivers. (Bankers Hill 150, supra, 74 Cal.App.5th 755.) In Bankers Hill 150, project opponents claimed that the project could be redesigned to be more consistent with the city’s development standards and thus the city should have denied the requested waivers. The court rejected that argument, holding that the city could not demand the developer to redesign its building to better meet the city’s development standards even if a design existed that would allow fewer deviations than the proposed project. (Id. at p. 775.) In addition, HCD has clarified that a waiver must be granted if it is necessary to facilitate a requested incentive or concession. (HCD Letter of Technical Assistance to the City of San Jose, May 20, 2022.9)
3. City Ventures’s Specific Requests Under the SDBL
City Ventures makes the following specific requests under the SDBL. It also reserves the right to update and/or amend these requests in the future as the application process continues. (a) Density Bonus
As noted above, City Ventures is entitled to a density bonus of 20 percent over the otherwise allowed “base density” of 157 residential units. Consistent with that bonus, City Ventures requests a density bonus of just over 8 percent to allow for the Project’s 167 units. 8 https://www.hcd.ca.gov/community-development/housing-element/docs/sdiencinitas-nov-012022.pdf. 9 http://www.hcd.ca.gov/community-development/housing-element/docs/sclSanJose-TA-052022.pdf.
Noah Housh
November 7, 2023
(b) Incentive/Concession
City Ventures requests the following incentive/concession under the SDBL. (i) Location of Inclusionary Units
The City’s inclusionary housing ordinance states that, except as otherwise provided, “inclusionary units shall be dispersed throughout a residential development.” (Muni. Code, § 17.31.040.A.) This requirement would prohibit a developer from effectively competing for tax credit financing and other lower cost financing that results in identifiable and actual cost reductions for affordable housing. City Ventures wishes to access such funding available to competitive, 100 percent affordable housing projects and thus requests an incentive/concession from the City’s dispersal requirements to allow the Project’s 34 affordable stacked flats or apartment units to be developed on one parcel in the northeast corner of the Property. (c) Waivers
City Ventures requests the following waivers from the applicable zoning standards and criteria of the CG zoning district, application of which would physically preclude construction of the Project at the density and with the incentive/concession permitted under the SDBL. (i) Height
City Ventures requests a waiver of the 35-foot height limit in the CG zoning district (Muni. Code, § 17.24.030 [Table 2-13]) to allow for Project building heights up to 45 feet.
Increased building heights are needed to accommodate the proposed residential units along with accompanying Project site amenities and nonresidential uses. Absent this waiver, application of this development standard would preclude construction of the proposed housing development project at the permitted density and with the incentive/concession permitted under the SDBL. (ii) Accessibility Requirements for Multifamily Projects The City’s multifamily requirements state that multifamily projects of five or more units “shall be designed and constructed so that a minimum of ten percent of the units are one-story, and shall include features to provide for disabled accessibility, including wide doors, grab bars, etc., as determined by the review authority.” (Muni. Code, § 17.42.120.B.) City Ventures requests a waiver from this requirement to allow all of the Project’s units to be constructed as proposed, with amenities also as proposed.10 Absent this waiver, application of this development standard would preclude construction of the proposed housing development project at the permitted density and with the incentive/concession permitted under the SDBL. 10 Separately, the Project would comply with ADA/Building Code and any state law accessibility requirements, including that 10 percent of the units would be ADA accessible/adaptable as required under the Building Code.
Noah Housh
November 7, 2023
(iii) Minimum FAR for Nonresidential Use
The City’s mixed-use requirements provide that the nonresidential use components of mixed-use projects in the CG zoning district must have a minimum FAR of 0.25. (Muni. Code, § 17.42.100.B.1.) City Ventures requests a waiver from this requirement to allow for an FAR of approximately 0.02 (i.e., 10,000 square feet of proposed commercial use / 10.41 acres [453,459.6 square feet] = .022). This waiver is needed to allow for the proposed housing density on the site with the accompanying Project amenities as designed. Absent this waiver, application of this development standard would preclude construction of the proposed housing development project at the permitted density and with the incentive/concession permitted under the SDBL. (iv) Setbacks
City Ventures requests waivers from the setback requirements of the CG zoning district (see Muni. Code, § 17.24.030 [Table 2-13])) to allow for minimum Project setbacks as follows:
(i) front, 0 feet; (ii) side, 10 feet; and (iii) rear, 15 feet if abutting residential, none otherwise.
The above setbacks are needed to accommodate the proposed residential units along with Project site amenities and nonresidential uses. Absent these waivers, application of these development standards would preclude construction of the proposed housing development project at the permitted density and with the incentive/concession permitted under the SDBL. * * *
Please do not hesitate to contact me if you have any questions. We look forward to working with the City to bring needed housing, including affordable housing, to the area.
Sincerely,
Linda C. Klein
101136\17105747