EAST PALO ALTO
CITY COUNCIL
STAFF REPORT
DATE: December 15, 2022
TO: Honorable Mayor and Members of the City Council
VIA: Patrick Heisinger, Interim City Manager
BY: Karen Camacho, Interim Housing & Economic Development Manager Elena Lee, Planning Manager
SUBJECT: Appropriate TOT Revenue to fund Master Temporary Use Permits for Temporary Housing
Recommendation
Adopt a Resolution to appropriate an amount not exceeding $60,000 from Transient Occupancy Tax revenue to fund permit fees and additional City expenses for Master Temporary Use Permit (“Master TUP”) applications for temporary housing with a maximum of $15,000 per application.
Alignment with City Council Strategic Plan
This recommendation is primarily aligned with:
Priority No. 2: Enhance Economic Vitality
Priority No. 4: Improve Public Facilities and Infrastructure Priority No. 6: Create a Healthy and Safe Community
Background
On June 7, 2022, the City Council authorized the use of a Master Temporary Use Permit (“Master TUP”) application to permit temporary housing, housing for unhoused residents, on public or private property. The intent was to allow for expedited permit processing for property owners interested in allowing vehicles to park overnight or providing temporary shelter on the property. This action followed Council direction on April 5, 2022 for staff to develop a Master TUP for temporary housing solutions for unhoused residents that may take the form of:
· Vehicles parked overnight on private property
· Temporary shelter provided in existing buildings on private property · Temporary housing placed on-site on private property
The Master TUP program is one of multiple strategies to accommodate unhoused residents in East Palo Alto. With this program, the City is seeking to expand safe parking locations for individuals living in RVs and to provide a temporary shelter option for unhoused residents within East Palo Alto. The City has met on a monthly basis with the County of San Mateo Human Services Agency (“HSA”) and service providers LifeMoves and Project WeHOPE since April 2021 to offer interim and permanent housing and case management services to unhoused residents, and partnered with WeHOPE for the last four years to offer RV safe parking services. The Master TUP program is intended to close the gap in interim housing solutions by engaging local nonprofits and faith communities in this effort.
The Master TUP consists of a single application containing all applicable site standards and conditions for different types of temporary housing on all parcel types. Applicants could apply for a single property or for a multi-site program, such as a rotating shelter, for up to 12 months at a time. The intention is to provide a streamlined and efficient process to facilitate housing solutions. Consistent with the requirements of the East Palo Alto Municipal Code for temporary use permits, public noticing and a Director’s hearing will be required prior to the issuance of a TUP.
Following Council’s direction on June 7, 2022, staff has created and made available the Master TUP application packet and created a webpage with detailed information on the application and process. The webpage can be found at this following location:
https://www.cityofepa.org/planning/page/master-tup-temporary-shelters. The webpage explains the process and provides the application and contacts for questions. As of the distribution of the staff report, no applications have been submitted. The City’s permit processing fee for a Master TUP is a likely deterrent.
On June 7, 2022, staff also recommended that the City cover permit fee costs and additional possible expenses such as architecture, consultant fees, and fees for other reviewing agencies (e.g., Menlo Fire). Council passed Resolution No. 80-2022, authorizing staff to use Housing Funds to cover permit fees for a Master TUP for temporary housing, with the goal of lowering barriers to participation. While use of Housing Funds was authorized, the amount and source of funds for the permit fees were not identified.
Staff is seeking Council approval to allocate up to $60,000 in Transient Occupancy Tax (“TOT”) revenue to cover the payment of the TUP planning fee for applicants, which is currently $11,474 for a new application and $1,728 for TUP renewals. This amount can cover up to four applications with an allowance for other eligible City expenses. This funding could also cover future increases in permit fees due to annual adjustments based on the construction cost index (“CCI”).
Analysis
Master Temporary Use Permit Fee
One of the primary objectives of the Master TUP is to inform applicants upfront about the requirements for temporary housing, and to ensure that the Planning and Building Divisions and outside reviewing agencies have sufficient information to streamline the review and approval of applications. As with any TUP, Master TUP applications are subject to site standards and conditions that ensure safety and conformance with applicable Planning and Building codes. Operational conditions would be addressed and, based on site conditions, the maximum number of RVs or unhoused residents on each site would also be defined. The intent of the fee is to fund staff work on reviewing the proposal and identifying measures or other requirements needed to ensure all standards are met.
The cost of a TUP application for a 12-month period is $11,474, with a renewal fee of $1,728, according to the City’s current Comprehensive Fee Schedule (effective July 1, 2022). The cost for the initial application is a substantial amount. City coverage of the permit fee would remove a financial barrier for property owners to provide housing opportunities for the unhoused on their property. Staff recommends that the City fund the planning application fee using Transient Occupancy Tax revenue to incentivize applicants to offer their property for temporary housing.
TOT revenue is collected through a hotel tax which is submitted to the City of East Palo Alto on a monthly basis.
Eligible Expenses and Terms for TUP Fee Assistance
Staff recommends that the City Council consider appropriating a maximum of $60,000 so eligible applicants (e.g., churches, nonprofits and private entities) could apply for assistance to cover costs associated with the City’s Master TUP application process. This appropriation would be sufficient to cover up to four TUPs. The proposed qualifying expenses and terms for fee assistance are as follows:
· Eligible applicants can include churches, non-profit organizations and private property owners that have space or facilities on their property to accommodate unhoused individuals;
· Applicant/property owner shall submit an application to accommodate at least ten individuals to receive the fee assistance;
· Applicants shall propose providing overnight parking or accommodations for the full one-year term of the Master TUP;
· Qualifying expenses include the Planning permit fee (currently $11,474), the renewal fee (currently $1,728), and associated City fees and expenses that are necessary for approval of the Master TUP;
· For administrative ease, staff is not recommending covering third-party architectural or consultant costs or fees of other agencies;
· Maximum assistance for each Master TUP is $15,000; a Master TUP application can cover a single site or multiple properties; and
· Requests for fee assistance will be on a first come, first served basis.
Next Steps
If authorized, staff will set aside TOT funds to fund the permit fees and additional City expenses for a Master TUP. Staff will reach out to the community to inform them that assistance on the permit processing fees is available. Staff will also prepare an informational report to the City Council in six months on the status of the Master TUP program and the applicants that have applied for the funds. If deemed necessary, adjustments may be recommended for Council consideration.
Fiscal Impact
Assuming four qualifying Master TUP applications are received, the Planning permit fee would total $45,896 based on the City’s current Comprehensive Fee Schedule (effective July 1, 2022). An additional $14,104 is recommended to cover additional costs for other City fees and expenses to process the initial permit. The proposed maximum assistance for each Master TUP application is $15,000 and the authorized fiscal impact on the TOT Fund would not exceed $60,000.
Public Notice
The public was provided notice by making the agenda and report available on the City’s website on a bulletin board located at 2415 University Avenue, East Palo Alto.
Environmental
The action being considered does not constitute a “Project” within the meaning of the California Environmental Quality Act (CEQA), pursuant to CEQA Guideline section 15378 (b)(5), in that it is a government administrative activity that will not result in direct or indirect changes in the environment.
Attachments
1. Resolution