Hayward City Council
December 6, 2022

V. Investment Advisory Committee

The City Manager will appoint an Investment Advisory Committee (IAC). The IAC shall, at minimum, consist of the Assistant City Manager, Director of Finance or Deputy Director of Finance, City Attorney or Assistant City Attorney, one department head, and a minimum of one non-City employee that possesses financial skills to be chosen by the City Manager as available.

The IAC shall meet at least quarterly for the purpose of overseeing the implementation of the City's investment program and assuring it is consistent with the Statement of Investment Policy as approved by the Council. The committee shall include in its discussions such topics as economic outlook, portfolio diversification and maturity structure, potential risks to the City's funds, approval of authorized financial institutions, and the performance of the investment portfolio. Written investment procedures must be approved by the IAC.

VI. Ethics and Conflict of Interest

Officers and employees involved in the investment process shall refrain from personal business activities that could conflict with proper execution of the investment program or impair their ability to make impartial decisions.

All members of the City’s IAC shall annually file Statements of Economic Interests (SEIs or Form 700) with the California Fair Political Practices Commission.

VII. Investment Policy Adoption

The City's Statement of Investment Policy shall be annually reviewed and approved by the Investment Advisory Committee and thereafter shall be reviewed and approved by the City Council at a public meeting.

VIII. Standard of Prudence

All participants in the investment process shall act responsibly as custodians of the public trust. Investment officials shall recognize that the investment portfolio is subject to public review and evaluation. Nevertheless, in a diversified portfolio, it must be recognized that occasional measured losses are inevitable, and must be considered within the context of the overall portfolio's investment return, provided that adequate diversification has been implemented.

The standard of prudence to be used by investment officials shall be the “prudent investor standard,” which states:

“When investing, reinvesting, purchasing, acquiring, exchanging, selling, or managing public funds, a trustee shall act with care, skill, prudence, and diligence under the circumstances then prevailing, including, but not limited to, the general economic conditions and the anticipated needs of the agency, that a prudent person acting in a FY 20232 - Statement of Investment Policy

like capacity and familiarity with those matters would use in the conduct of funds of a like character and with like aims, to safeguard the principal and maintain the liquidity needs of the agency.”

Investment officers acting in accordance with written procedures and the Statement of Investment Policy, and exercising due diligence shall be relieved of personal responsibility for an individual security's credit risk or market price changes, provided deviations from expectations are reported in a timely fashion and the liquidity and the sale of securities are carried out in accordance with the terms of this Policy.

IX. Reporting

The following investment activity reports will be completed.

A. Monthly
The Director of Finance shall post a monthly investment and transaction summary to the City’s public website that will be available to the City Manager, Investment Advisory Committee, City Council Budget & Finance Committee, City Council, and the general public. Code section 53607 requires agencies to make a monthly report of transactions available to the legislative body.

The investment summary will list investment transactions executed during the month, and will report key aspects of the investment portfolio, including the following information about each investment instrument: issuer, par amount, purchase price, sales price, realized gains and losses, maturity dates, credit ratings, and the percentage of the portfolio by each type of investment.

B. Periodic
While there is no legislative requirement for quarterly investment activity reporting, the Director of Finance shall submit periodic investment reports to the City Manager, Investment Advisory Committee, City Council Budget & Finance Committee, and City Council.

A periodic report shall include all components of the City’s monthly report, highlight key aspects of information contained in the investment reports, and inform readers of economic conditions affecting the portfolio. The report will present recent investment performance and future investment strategy; disclose any perceived threats to portfolio quality, security or liquidity; compare the portfolio performance to that of the City’s established performance benchmark, state compliance with the Investment Policy and include a statement denoting the ability to meet expenditure requirements for the next six months.

C. Annual
While there is no legislative requirement for submission of an annual investment report, the Director of Finance shall present a comprehensive annual report on the investment program and investment activity no later than 180 days following the end of the fiscal year. This report shall be presented to the Investment Advisory Committee. The annual report shall include a performance summary, shall suggest policies and improvements FY 20232 - Statement of Investment Policy

that might enhance the investment program, and include an investment plan for the ensuing fiscal year. In conjunction with its review of the annual investment report, the Investment Advisory Committee shall review and reaffirm the Statement of Investment Policy of the City, whether or not specific policy modifications are suggested.

Following the annual review of the Statement of Investment Policy by the Investment Advisory Committee, the Investment Policy shall be submitted to the City Council, together with any changes recommended by the Investment Advisory Committee. The City Council shall consider any such recommended changes and approve the Statement of Investment Policy at a public meeting of the City Council.

X. Investment Instruments

A summary and description of authorized investment instruments is below.

INVESTMENT INSTRUMENT SUMMARY

Security Type
Maximum
Maturity
Min
Credit
Qualit
y
Authorized
Investment
Limit
Per
Issuer
Limit
A. US Treasury Notes/Bills 5 Years None 100% 100%
B. US Agencies 5 Years None 100% 40%
B. US Agencies–Mortgage-
Backed
5 Years None 20% 20%
C. Banker’s Acceptance (BA) 1 8 0 d ays A-1 40% 5%
D. Commercial Paper 270 da ys A-1 40% 5%
E. Negotiable Certificates of
Deposit
5 Years “A” 30% 5%
F. Repurchase Agreements 1 Yea r None 20% 20%
G. Medium Term Notes (MTN) 5 Years “ A” 30% 5%
H. Money Market Fund N/ A AAAm 20% 10%
I. Alameda County Investment
Pool
None None 10% 10%
J. Shares of beneficial interest
issued by a joint powers authority
None AAAm 100% N/A
K. LAIF None None Max amount
allowed by
Advisory
Board
N/A
L. Collateralized Certificates of
Deposit
5 Years None 25% 20%
M. Municipal Bonds 5 Years “A” 20% 5%
N. Supranationals 5 Years “AA” 30% 30%
O. Asset-Backed Securities 5 Yr WAL 1 “AA” 20% 5%

The following sections describe individual investment types. The sections specify a

1 WAL – Weighted Average Life. See glossary for definition FY 20232 - Statement of Investment Policy

percentage limitation for a particular category of investment. That percentage is applied on the date of purchase. A later increase in a percentage resulting from a change in values or assets shall not constitute a violation of the Policy restriction. For purposes of compliance with this Policy, an investment’s term or remaining maturity shall be measured from the settlement date to final maturity. A security purchased in accordance with this Policy shall not have a forward settlement date exceeding 45 days from the time of investment.

Unless stated otherwise in the Policy, no more than 5% of the City’s portfolio may be invested in securities issued by any one issuer.

A. United States Treasury Notes, Bonds, Bills, or Certificates of Indebtedness, or those for which the faith and credit of the United States are pledged for the payment of principal and interest with a final maturity not exceeding five years from the date of trade settlement.

CA Govt Code 53601(b)

B. Federal Agency or United States Government-Sponsored Enterprise (GSE) Obligations, participations, or other instruments, including those issued by or fully guaranteed as to principal and interest by federal agencies, or United States government-sponsored enterprises with a final maturity not exceeding five years from the date of trade settlement. There is no limit to the amount of the City’s portfolio that may be invested in federal agency or GSE securities, except that the aggregate investment in federal agency mortgage-backed securities shall not exceed 20% of the City’s total portfolio. Furthermore, the aggregate investment in any one federal agency or GSE issuer shall not exceed 40% of the City’s total portfolio.

CA Govt Code 53601(f)

C. Banker’s Acceptances, otherwise known as bills of exchange or time drafts, that are drawn on and accepted by a commercial bank with a final maturity not exceeding 180 days from the date of trade settlement, rated at least “A-1” or the equivalent by a nationally recognized statistical-rating organization (NRSRO). The aggregate investment in banker’s acceptances shall not exceed 40% of the City’s total portfolio.

CA Govt Code 53601(g)

D. Prime Commercial Paper with the highest letter and numerical rating as provided for by a NRSRO. The entity that issues the commercial paper shall meet all of the following conditions in either paragraph 1 or paragraph 2 below:

(1) The entity meets the following criteria:
 is organized and operat ing in the United States as a general corporation;  has total assets in excess o f five hundred million dollars ($500,000,000); and  has debt other than commercia l paper, if any, that is rated in a rating category of at least "A" or its equivalent by a NRSRO.

FY 20232 - Statement of Investment Policy

(2) The entity meets the following criteria:
 is organized within the United St ates as a special purpose corporation, trust, or limited liability company;
 has program wide credit enhancem ents including, but not limited to, over- collateralization, letters of credit, or surety bond; and  has commercial paper that is ra ted "A-1" or higher, or the equivalent, by a NRSRO.

Eligible commercial paper shall have a final maturity not exceeding 270 days from the date of trade settlement. The aggregate investment in commercial paper shall not exceed 40% of the City’s total portfolio. Furthermore, the City may invest no more than 5% of its total investment assets in the commercial paper and the medium-term notes of any single issuer.

CA Govt Code 53601(h)

E. Negotiable Certificates of Deposit issued by a nationally- or state-chartered bank, a savings association or a federal association as defined by Section 5102 of the California Financial Code, a state or federal credit union, or by a federally-licensed or state-licensed branch of a foreign bank with a final maturity not exceeding five years from the date of trade settlement. Deposits are limited to institutions which have long-term debt rating in a rating category of at least “A” or the equivalent by a NRSRO. The aggregate investment in negotiable certificates of deposit shall not exceed 30% of the City’s total portfolio.

CA Govt Code 53601(i)

F. Repurchase Agreements with a final termination date not exceeding 360 days from the date of trade settlement collateralized solely by United States Treasury, federal agency, or United States government sponsored enterprises permitted by this Statement of Investment Policy. The purchased securities (the “collateral”) shall have a minimum market value of 102% of the dollar value of the funds invested. The market value of the collateral securities shall be marked-to-the-market daily and the value shall be adjusted no less frequently than weekly. No substitution of collateral shall be allowed without the prior approval of the Finance Director. All collateral securing repurchase agreements must be delivered to the City’s custodian bank or handled under a tri-party repurchase agreement. The City or its trustee shall have a perfected first security interest under the Uniform Commercial Code in all securities subject to repurchase agreement.

Approved repurchase agreement counterparties shall have a repurchase agreement counterparty credit rating of at least “A-1” or the equivalent and a long-term credit rating of at least “A” or the equivalent by a NRSRO. Repurchase agreement counterparties shall execute a City approved master repurchase agreement with the City. No more than 20% of the City’s total portfolio shall be invested in repurchase agreements.

FY 20232 - Statement of Investment Policy

CA Govt Code 53601 (j)

G. Medium-Term Notes issued by corporations organized and operating within the United States or by depository institutions licensed by the United States or any state and operating within the United States, with a final maturity not exceeding five years from the trade settlement, and rated in a rating category of at least “A” or the equivalent by a NRSRO at the time of purchase. The aggregate investment in medium-term notes shall not exceed 30% of the City’s total portfolio. Furthermore, the City shall invest no more than 5% of its total investment assets in the commercial paper and the medium-term notes of any single issuer.

CA Govt Code 53601 (k)

H. Money Market Funds. Shares of beneficial interest issued by diversified management companies that are money market funds registered with the Securities and Exchange Commission under the Investment Company Act of 1940 (15 U.S.C.

Sec. 80a-1, et seq.). To be eligible for investment pursuant to this subdivision these companies shall either:

(1) attain the highest ranking letter or numerical rating provided by not less than two of the three largest NRSROs, or

(2) have an investment advisor registered or exempt from registration with the Securities and Exchange Commission with not less than five years of experience managing money market mutual funds and with assets under management in excess of $1,000,000,000.

The purchase price of shares shall not exceed 20% of the City’s total portfolio and shall not include any commission that the companies may charge. Furthermore, no more than 10% of the City’s total portfolio may be invested in any one money market fund.

CA Govt Code 53601 (l)

I. Alameda County Investment Pool. The City’s maximum investment in the Alameda County pool is limited to 10% of the City’s total aggregate portfolio.

CA Govt Code 53684

J. Other Investment Pools. Shares of beneficial interest issued by a joint powers authority organized pursuant to Section 6509.7 that invests in the securities and obligations authorized in subdivisions (a) to (r), inclusive. Each share shall represent an equal proportional interest in the underlying pool of securities owned by the joint powers authority. To be eligible under this section, the joint powers authority issuing the shares shall have retained an investment adviser that meets all of the following criteria:

1) The adviser is registered or exempt from registration with the Securities and FY 20232 - Statement of Investment Policy

Exchange Commission.

2) The adviser has not less than five years of experience investing in the securities and obligations authorized in subdivisions (a) to (q), inclusive.

3) The adviser has assets under management in excess of five hundred million dollars ($500,000,000).

CA Govt Code 53601 (p)

K. State of California’s Local Agency Investment Fund (LAIF). The City's participation in LAIF shall conform to State Regulation. The City maintains a total of two LAIF investment accounts and may invest the maximum amount permitted by LAIF’s Local Investment Advisory Board. In general, it is the City's intention to use investment in LAIF as a temporary repository for short-term funds needed for liquidity purposes. The Finance Director shall maintain appropriate information concerning LAIF's current investment policies, practices and performance on file.

The Finance Director shall also maintain files on LAIF's requirements for participation, including, but not limited to, limitations on deposits or withdrawals and the composition of the portfolio.

CA Govt Code 16429.1

L. Collateralized Certificates of Deposit in FDIC-insured financial institutions located in California with a maximum maturity no longer than five years from the date of deposit. Deposits are limited to banks who have a long-term debt rating in a rating category of at least “A” or the equivalent and a short-term debt rating of at least “A-1” or the equivalent by a NRSRO. The City may waive collateral for any portion of its deposit that is covered by federal deposit insurance.

Money shall not be deposited in any state or federal credit union if a member of the legislative body of the City, or any person with investment decision making authority of the administrative office, manager's office, budget office, auditor-controller's office, or treasurer's office of the City, also serves on the board of directors, or any committee appointed by the board of directors, or the credit committee or supervisory committee, of the state or federal credit union.

The amount on deposit shall not exceed the total paid-up capital (to include capital notes and debentures) and surplus of any depository bank, or the total of the net worth of any savings and loan association. However, deposits in collateralized certificates of deposit shall not exceed 25% of the City’s total portfolio, nor shall the City deposit more than 20% of its total portfolio in the collateralized certificates of deposit of any one bank.

CA Govt Code 53649

M. Municipal Bonds issued by the state of California and any local agency within the state, including bonds payable solely out of revenues from a revenue-producing FY 20232 - Statement of Investment Policy

property owned, controlled, or operated by the state or any local agency, or by a department, board, agency or authority of the state or any local agency.

Registered treasury notes or bonds of any of the other 49 United States in addition to California, including bonds payable solely out of the revenues from a revenue- producing property owned, controlled, or operated by a state or by a department, board, agency, or authority of any of the other 49 United States, in addition to California.

The aggregate investment in municipal bonds may not exceed 20% of the City’s total portfolio.

CA Govt Code 53601(c), CA Govt C ode 53601(d), and CA Govt Code 53601(e)

N. Supranationals defined as United States dollar denominated senior unsecured unsubordinated obligations issued or unconditionally guaranteed by the International Bank for Reconstruction and Development, International Finance Corporation, or Inter-American Development Bank, with a final maturity not exceeding five years from the trade settlement, and eligible for purchase and sale within the United States. Supranationals shall be rated in a rating category of at least “AA” or the equivalent by a NRSRO at the time of purchase.

The aggregate investment in supranationals may not exceed 30% of the City’s total portfolio.

CA Govt Code 53601(q)

O. Asset-Backed Securities defined as all mortgage pass-through securities, collateralized mortgage obligations, mortgage-backed or other pay-through bonds, equipment lease-backed certificates, consumer receivable pass-through certificates, and consumer receivable-backed bonds, with a final maturity not exceeding five years from the trade settlement.

Asset-backed securities shall be rated in a rating category of at least "AA" or the equivalent by a NRSRO at the time of purchase and have a maximum remaining maturity of five years or less.

The aggregate investment in asse t-backed securities may not ex ceed 20% of the City’s total portfolio.

CA Govt Code 53601(o)

XI. Prohibited Investments
Investments not specifically approved by this Statement of Investment Policy are prohibited, including inverse floaters, range notes, mortgage derived interest-only strips, and securities that could result in zero interest accrual if held to maturity, except as provided in the subsequent paragraph.

FY 20232 - Statement of Investment Policy

Notwithstanding the prohibitions stated in the above paragraph, effective January 1, 2021, the City may invest in securities issued by, or backed by, the United States government that could result in zero- or negative-interest accrual if held to maturity, in the event of, and for the duration of, a period of negative market interest rates. The City may hold these instruments until their maturity dates. Securities described in this paragraph shall remain in effect only until January 1, 2026, and as of that date is repealed.

XII. Credit Downgrade

The minimum rating criteria for particular investment categories is applied on the date of purchase. The City may from time to time be invested in a security whose rating is downgraded. In the event a rating drops below the minimum allowed rating category for that given investment type, the securities shall be reviewed and a plan of action shall be recommended by the Director of Finance or investment manager. The Director of Finance may consult the Investment Advisory Committee on the action to be taken and shall advise its Chairman and Members of the final disposition of the matter either by e- mail or fax.

If an investment advisor is used, the investment advisor will immediately notify the Director of Finance if a purchased security has been downgraded below accepted minimums specified herein, or if the security is placed on negative credit watch, where downgrade could result in a rate drop below acceptable levels of that fact. The course of action to be followed will then be decided on a case-by-case basis, considering such factors as the reason for the rate drop, prognosis for recovery or further drop, and market price of the security. The City Council will be advised of the situation and intended course of action by e-mail or fax.

XIII. Maturity and Diversification

Maturities shall be based on a review of cash flow forecasts. Maturities will be scheduled to permit the City to meet all projected obligations.

The City may not invest in a security that exceeds five years from the date of purchase unless City Council has granted express authority to make that investment no less than three months prior to the investment.

XIV. Internal Controls

The Finance Director shall establish a system of internal controls. The controls shall be designed to prevent losses of public funds arising from fraud, employee error, misrepresentation by third parties, unanticipated changes in financial markets, or imprudent actions by employees and officers of the City. Controls deemed most important include:

 Clearly delegating authority to subordinate staff members. Subordinate staff members must have a clear understanding of their authority and responsibilities to avoid improper actions. Clear delegation of authority also preserves the internal control FY 20232 - Statement of Investment Policy

structure that is contingent on the various staff positions and their respective responsibilities.

 Separating transaction authority from accounting and record keeping. By separating the person who authorizes or performs the transaction from the people who record or otherwise account for the transaction, a separation of duties is achieved.

 Delivery versus payment. All trades where applicable will be executed by delivery vs. payment (DVP). This ensures that securities are deposited in the eligible financial institution before the release of funds. A third party custodian as evidenced by safekeeping receipts will hold securities.

 Avoiding physical delivery securities. Book entry securities are much easier to transfer and account for since actual delivery of a document never takes place.

Delivered securities must be properly safeguarded against loss or destruction. The potential for fraud and loss increases with physically delivered securities.

 Confirming telephone transactions for investments and wire transfers in writing.

Due to the potential for error and improprieties arising from telephone transactions, all telephone transactions should be supported by written communications and approved by the appropriate person. Written communications may be via fax if on letterhead and the safekeeping institution has a list of authorized signatures.

 Developing wire transfer agreements with the lead bank or third party custodian.

This agreement should outline the various controls and security provisions, and delineate responsibilities of each party making and receiving wire transfers.

FY 20232 - Statement of Investment Policy

XV. Banks and Security Dealer Selection

The Investment Advisory Committee shall approve all financial institutions from which securities are purchased or sold.

In selecting financial institutions for the deposit or investment of City funds, the Finance Director shall consider the creditworthiness of institutions. The Finance Director shall continue to monitor financial institutions' credit characteristics and financial history throughout the period in which City funds are deposited or invested.

Only primary government securities dealers that report to the New York Federal Reserve shall be used for the purchase of repurchase agreements. (It is acknowledged that inclusion on the primary dealer listing of the Federal Reserve Bank of New York is not a guarantee of creditworthiness.)

Effective October 14, 1987, the City shall be prohibited from investing funds with any person who is knowingly or intentionally engaged in the development or production of nuclear weapons. Person is defined as any person, private corporation, institution or other entity, which is within the jurisdiction of the City of Hayward.

If a third-party investment advisor is authorized to conduct investment transactions on the City’s behalf, the investment advisor may use its own list of approved broker/dealers and financial institutions for investment purposes.

XVI. Risk Tolerance

The City recognizes that investment risks can result from issuer defaults, market price changes, or various technical complications leading to temporary illiquidity. Portfolio diversification is employed as a way to control risk. Investment managers are expected to display prudence in the selection of securities as a way to minimize default risk. No individual investment transaction shall be undertaken that jeopardizes the total capital position of the overall portfolio.

The Director of Finance shall periodically establish guidelines and strategies to control risks of default, market price changes and illiquidity. All investment reports shall specifically address whether current investment results have been affected by any of the foregoing risks, and shall explain what actions investment officials have taken to control or correct for such risks.

A thorough investigation of any money market fund or investment pool, including LAIF and the Alameda County Pool, is required prior to investing, as well as on an ongoing basis. The following information should be obtained and analyzed:

I. A description of eligible investment securities
II. A written statement of invest ment policies and objectives III. A description of interest c alculation and their distribution, and the treatment of gains and losses
IV. A description of how the se curities are safeguarded and how often the FY 20232 - Statement of Investment Policy

securities are priced and the program audited
V. Information about the size and frequency of deposits and withdrawals allowed, and how much notice is needed for withdrawals
VI. A schedule for receiving st atements and portfolio listings VII. A fee schedule, as well as how and when the fees are assessed VIII. The rating of the pool/fund
IX. Information about i nvestment advisers, including registration with the Securities and Exchange Commission, length of experience and total assets under management

In addition to these general policy considerations, the following specific policies will be strictly observed:

1. All investment fund s will be placed directly with qualified financial institutions. The City will not deposit or invest funds through third parties or money brokers.

2. A competitive bid p rocess, utilizing financial institutions approved by the Investment Advisory Committee, will be used to place investment purchases.

Based on annual evaluation, securities dealers, banks, and other financial institutions will be dropped or continued on the eligibility list. The following criteria will be used in the evaluation:

a. Number of transactions competitively won
b. Prompt and accur ate confirmation of transactions
c. Efficient securities delivery
d. Accurate market information account servicing

If a third party investment advisor is authorized to conduct investment transactions on the City’s behalf, the investment advisor may rely on its review process and use its own list of approved broker/dealers for investment purposes.

3. The Finance Director may desi gnate an official to manage investments and designate a second official to perform investment management during absences of the primary designee. The Finance Director shall ensure that competent investment management is maintained and shall ensure that, if both designated investment officials are replaced or are simultaneously absent, any temporary replacement(s) shall be closely supervised, indoctrinated in the requirements of this Statement of Investment Policy, and given written investment procedures regulating the authority to invest in maturities beyond six months by means of appropriate controls and restraining requirements.

4. In order to assist in identifying "qualified financial institutions," the Finance Director shall forward copies of the City's Statement of Investment Policy to those financial institutions with which the City is interested in doing business and require written acknowledgement of the policy.

FY 20232 - Statement of Investment Policy

XVII. Safekeeping and Custody

To protect against potential fraud and embezzlement, the assets of the City shall be secured through third-party custody and safekeeping procedures.

The investment official shall be bonded to protect the public against possible embezzlement and malfeasance. An independent auditor shall review safekeeping procedures annually. The auditor may conduct surprise audits of safekeeping and custodial procedures.

All cash and securities in the City’s portfolio shall be held in safekeeping in the City’s name by a third party bank trust department, acting as agent for the City under the terms of a custody agreement executed by the bank and the City.

All securities will be received and delivered using standard delivery versus payment (DVP) procedures; the City's safekeeping agent will only release payment for a security after the security has been properly delivered. The only exception to the foregoing shall be depository accounts and securities purchases made with: (i) local government investment pools, and (ii) money market funds, since the purchased securities are not deliverable.

FY 20232 - Statement of Investment Policy

Appendix A
Comparison and Interpretation of Credit Ratings1

Long-Term Debt Ratings Debt Ratings
Rating Interpretation Moody’s Standard &
Poor’s
Fitch
Best Quality Grade Aaa AAA AAA
High Quality Grade Aa1
Aa2
Aa3
AA+
AA
AA-
AA+
AA
AA-
Upper Medium Grade A1
A2
A3
A+
A
A-
A+
A
A-
Medium Grade Baa1
Baa2
Baa3
BBB+
BBB
BBB-
BBB+
BBB
BBB-
Speculative Grade Ba1
Ba2
Ba3
BB+
BB
BB-
BB+
BB
BB-
Low Grade B1
B2
B3
B+
B
B-
B+
B
B-
Poor Grade to Default Caa CCC+ CCC
In Poor Standing -
-
CCC
CCC-
-
-
Highly Speculative
Default
Ca
C
CC
-
CC
-
Default -
-
-
-
-
D
DDD
DD
D

Short-Term/Commercial Paper Investment Grade Ratings
Rating Interpretation Moody’s Standard &
Poor’s
Fitch
Superior Capacity P-1 A-1+/A-1 F1+/F1
Strong Capacity P-2 A-2 F2
Acceptable Capacity P-3 A-3 F3

1 These are general credit rating guidelines and are for information only.

FY 20232 - Statement of Investment Policy

Appendix B
Glossary

ASK PRICE: The price at which a seller offers to sell a security to a buyer.

ASSET-BACKED SECURITIES: Bonds created from various types of consumer debt.

Returns on these securities come from customer payments on their outstanding loans. The primary types of asset-backed securities are mortgages, home equity loans, auto loans, leases, credit card receivables and student loans.

BANKERS’ ACCEPTANCE: A letter of credit issued in a foreign trade transaction which allows exporters to receive payment prior to importation of their goods. Banks provide short-term financing to facilitate the transaction and may sell the obligation to a third party. Bankers’ Acceptances are secured by the issuer of the bill, while the underlying goods also serve as collateral.

BANK DEPOSITS: Collateral in the form of currency that may be in the form of demand accounts (checking) or investments in accounts that have a fixed term and negotiated rate of interest.

BENCHMARK: A comparative base for measuring the performance or risk tolerance of the investment portfolio. A benchmark should represent a close correlation to the level of risk and the average duration of the portfolio’s investments.

BID PRICE: The price at which a buyer offers to purchase a security from the seller.

BOND: A debt investment in which an investor loans money to an entity (corporate or governmental) that borrows the funds for a defined period of time at a fixed interest rate called a coupon payment. Bonds are used by companies, municipalities, states and the U.S. government to finance a variety of projects and operating activities.

BROKER: A broker aligns buyers and sellers of securities and receives a commission when a sale occurs. Brokers generally do not hold inventory or make a market for securities.

CALIFORNIA LOCAL AGENCY OBLIGATIONS: Bonds that are issued by a California county, city, city and county, including a chartered city or county, school district, community college district, public district, county board of education, county superintendent of schools, or any public or municipal corporation.

CD (CERTIFICATE OF DEPOSIT): Time deposits issued by a bank, savings or federal credit union, or state-licensed branch of a foreign bank. Negotiable Certificates of Deposits rely on the credit rating of the issuing entity.

COLLATERAL: Securities, evidence of deposit, or other property that a borr ower
pledges to secure repayment of a loan. Also refers to securities pledged by a bank FY 20232 - Statement of Investment Policy

to secure deposits of public monies.

COLLATERALIZATION: Process by which a borrower pledges securities, property, or other deposits for the purpose of securing the repayment of a loan and/or security.

COMMERCIAL PAPER: Short-term unsecured promissory note issued by a company or financial institution. Commercial paper is issued at a discount and matures at face value. Usually a maximum maturity of 270 days, and given a short-term debt rating by one or more NRSROs.

COUNTY POOLED INVESTMENT FUNDS: The aggregate of all funds from public agencies placed in the custody of the county treasurer or chief finance officer for investment and reinvestment.

COUPON: The annual rate of interest that a bond’s issuer promises to pay the bondholder, expressed as a percentage of the bond’s face value.

CREDIT RISK: Credit risk is the likelihood that an issuer will be unable to make scheduled payments of interest or principal on an outstanding obligation.

CUSTODIAN: An agent such as a broker or a bank that stores a customer’s investments for safekeeping. The custodian does not have fiduciary responsibilities.

DEALER: A dealer, as opposed to a broker, acts as a principal in security transactions, selling securities from, and buying securities for his/her own position.

DEFAULT: To default is to fail to repay principal or make timely interest payments on a bond or other debt investment security, or failure to fulfill the terms of a note or contract.

DELIVERY VERSUS PAYMENT (DVP): A securities industry procedure whereby payment for a security must be made at the time the security is delivered to the purchaser's agent.

DIVERSIFICATION: Dividing investment funds among a variety of securities offering independent returns.

DURATION: The weighted average time to maturity of a bond where the weights are the present values of future cash flows. Duration measures the price sensitivity of a bond to changes in interest rates.

FIDUCIARY: An individual who holds something in trust for another and bears liability for its safekeeping.

FLOATING RATE INVESTMENTS: Notes whose interest rate is adjusted according to the interest rates of other financial instruments. These instruments provide protection against rising or falling interest rates, but may pay lower yield than fixed rate notes.

FY 20232 - Statement of Investment Policy

FUTURES: Commodities, which are sold in the present time and are to be delivered at a future date.

INTEREST ONLY STRIPs: Securities with cash flow based entirely on the monthly interest payments received from a mortgage, Treasury, or bond payment. No principal is included in these types of securities.

INVERSE FLOATING RATE INVESTMENTS: Variable-rate notes (such as inverse floating rate notes) whose coupon and value increase as interest rates decrease.

INVESTMENT PROGRAM: The process of modern portfolio management. The process includes establishing investment policy, analysis of the economic and capital markets environment, portfolio monitoring and rebalancing, and measuring performance.

LIQUIDITY: The ease with which investments can be converted to cash at their present market value. Liquidity is significantly affected by the number of buyers and sellers trading a given security and the number of units of the security available for trading.

LOCAL AGENCY BONDS: These bonds are issued by a county, city, city and county, including a chartered city or county, school district, community college district, public district, county board of education, county superintendent of schools, or any public or municipal corporation.

LOCAL AGENCY INVESTMENT FUND (LAIF): A voluntary investment fund open to state and local government entities and certain non-profit organizations in California in which organization pools their funds for investment. LAIF is managed by the State Treasurer’s Office.

MARKET RISK: Market risk is the risk that investments will change in value based on changes in general market prices.

MARKET VALUE: The price at which a security is trading and could presumably be purchased or sold.

MASTER REPURCHASE AGREEMENT: A written contract which includes provisions specific to the governmental agency that is signed by an authorized officer with each counterparty. A master agreement will often specify details to the nature of transactions, the relationship of the parties to the agreement, parameters pertaining to the ownership and custody of collateral, and remedies in the event of default by either party.

MATURITY: The date upon which the principal or stated value of an investment becomes due and payable.

MEDIUM TERM NOTES (MTN): Unsecured, investment-grade senior debt securities of major corporations that are sold either on a continuous or an intermittent basis.

MTNs are highly flexible debt instruments that can be structured to respond to FY 20232 - Statement of Investment Policy

market opportunities or to investor preferences.

MONEY MARKET: The market in which short-term debt instruments (bills, commercial paper, bankers’ acceptances, etc.) are issued and traded.

MORTGAGE-BACKED SECURITIES: A debt instrument with a pool of real estate loans as the underlying collateral. The mortgage payments of the real estate assets are used to pay interest and principal on the bonds.

MORTGAGE PASS-THROUGH SECURITIES: A securitized participation in the interest and principal cash flows from a specified pool of mortgages. Principal and interest payments made on the mortgages are passed through to the holder of the security.

MUTUAL FUNDS: An investment company that pools money and can invest in a variety of securities, including fixed-income securities and money market instruments.

Money market mutual funds invest exclusively in short-term (1-day to 1-year) debt obligations such as Treasury bills, certificates of deposit, and commercial paper. The principal objective is the preservation of capital and generation of current income.

NATIONALLY RECOGNIZED STATISTICAL RATING ORGANIZATION (NRSRO):

The formal term to describe a credit rating agency that is registered with the U.S. securities and exchange commission's office of credit ratings. Ratings provided by NRSROs are used frequently by investors and are used as benchmarks by federal and state agencies. Examples include Moody’s, Standard and Poor’s, and Fitch.

OFFER: The price asked by a seller of securities. See Ask Price and Bid Price.

OPTION: A contract that provides the right or obligation, depending on the buyer or seller’s position within the contract, to buy or to sell a specific amount of a specific security within a predetermined time period at a specified price. A call option provides the right to buy the underlying security. A put option provides the right to sell the underlying security. The seller of the contracts is called the writer.

PORTFOLIO: A collection of securities held by an investor.

PRIMARY DEALER: A group of government securities dealers who submit daily reports of market activity and positions and monthly financial statements to the Federal Reserve Bank of New York and are subject to its informal oversight. Primary dealers include Securities and Exchange Commission (SEC)-registered securities broker- dealers, banks, and a few unregulated firms.

PRINCIPAL ONLY STRIPS: Securities with cash flow based entirely on the principal payments received from an obligation.

RANGE NOTES: A range note is a bond that pays interest if a specified interest rate remains above or below a certain level and/or remains within a certain range.

RATE OF RETURN: The yield obtainable on a security based on its purchase price or FY 20232 - Statement of Investment Policy

its current market price.

REPURCHASE AGREEMENT (RP, Repo): A contractual transaction between an investor and an issuing financial institution (bank or securities dealer). The investor exchanges cash for temporary ownership or control of collateral securities, with an agreement between the parties that on a future date, the financial institution will repurchase the securities.

SAFEKEEPING: A service to customers rendered by banks for a fee whereby securities and valuables of all types and descriptions are held by the bank in the customer's name.

SECONDARY MARKET: A market made for the purchase and sale of outstanding issues following the initial distribution.

SECURITIES AND EXCHANGE COMMISSION (SEC): A federal government agency comprised of five commissioners appointed by the President and approved by the Senate. The SEC was established to protect the individual investor from fraud and malpractice in the marketplace. The Commission oversees and regulates the activities of registered investment advisers, stock and bond markets, broker/dealers, and mutual funds.

STATE OBLIGATIONS: Registered treasury notes or bonds of the 50 United States, including bonds payable solely out of the revenues from a revenue-producing property owned, controlled, or operated by a state or by a department, board, agency, or authority of any of the 50 United States.

STRIPS: Bonds, usually issued by the U.S. Treasury, whose two components, interest and repayment of principal, are separated and sold individually as zero-coupon bonds. Strips are an acronym for Separate Trading of Registered Interest and Principal of Securities.

SUPRANATIONALS: International financial institutions that are generally established by agreements among nations, with member nations contributing capital and participating in management. Supranational bonds fi nance economic and infrastructure development and support environmental protection, poverty reduction, and renewable energy around the globe.

TRUSTEE: An individual or organization, which holds or manages and invests assets for the benefit of another. The trustee is legally obliged to make all trust-related decisions with the trustee's interests in mind, and may be liable for damages in the event of not doing so.

U.S. AGENCY OBLIGATIONS: Federal agency or United States government- sponsored enterprise obligations (GSEs), participations, or other instruments. The obligations are issued by or fully guaranteed as to principal and interest by federal agencies or United States government-sponsored enterprises. Issuers include:

Fannie Mae, Farmer Mac, Federal Farm Credit Banks, Freddie Mac, Federal Home FY 20232 - Statement of Investment Policy

Loan Banks, Financing Corporation, Tennessee Valley Authority, Resolution Trust Funding Corporation, World Bank, Inter-American Development Bank, and PEFCO.

U.S. TREASURY OBLIGATIONS (TREASURIES): Securities issued by the U.S.

Treasury and backed by the full faith and credit of the United States. Treasuries are considered to have no credit risk and are the benchmark for interest rates on all other securities in the U.S. and overseas. The Treasury issues both discounted securities and fixed coupon notes and bonds.

Treasury Bills: All securities issued with initial maturities of one year or less are issued as discounted instruments, and are called Treasury Bills (T-bills). The Treasury currently issues 3-month and 6-month T-bills at regular weekly auctions. It also issues "cash management" bills as needed to smooth cash flows.

Treasury Notes: All securities issued with initial maturities of 2- to 10-years are called Treasury Notes (T-notes), and pay interest semi-annually.

Treasury Bonds: All securities issued with initial maturities greater than 10-years are called Treasury Bonds (T-bonds). Like Treasury Notes, they pay interest semi- annually.

WAL: Weighted Average Life: Is the weighted average time for principal repayment, that is, the average time it takes for every dollar of principal to be repaid. The time weights are based on the principal payments, i.e., the years with more principal payments will have a higher weight..

YIELD: The rate of annual income return on an investment, expressed as a percentage.

Yield does not include capital gains.

Income Yield is obtained by dividing the current dollar income by the current market price for the security.

Net Yield or Yield to Maturity is the current income yield minus any premium above par or plus any discount from par in purchase price, with the adjustment spread over the period from the date of purchase to the date of maturity of the bond.

ZERO-COUPON BOND: A bond on which interest is not payable until maturity (or earlier redemption), but compounds periodically to accumulate to a stated maturity amount. Zero-coupon bonds are typically issued at a discount and repaid at par upon maturity.

CITY OF HAYWARD
Hayward City Hall
777 B Street
Hayward, CA 94541
www.Hayward-CA.gov
File #: CONS 22-687
DATE: December 6, 2022
TO: Mayor and City Council
FROM: Director of Finance

SUBJECT
Adopt a Resolution Accepting Transmittal of the Annual Mitigation Fee Act Report (AB1600)

RECOMMENDATION
That Council adopts a resolution (Attachment II) accepting the annual Mitigation Fee Act (AB 1600) report prepared to satisfy Government Code Subsection 66006(b)(1).

SUMMARY
The AB 1600 (Cortese) portion of the Mitigation Fee Act applies to fees charged in connection with the approval of development projects to defray the cost of public facilities. AB 1600 was enacted by the State Legislature in 1987, and applies to developer fees established, increased, or imposed on or after January 1, 1989. This legislation requires an annual report on the status of all eligible fees pursuant to the Mitigation Act to satisfy Government Code Subsection 66006(b)(1) requirements. This staff report includes four primary requirements that the City must satisfy in order to comply with the Mitigation Fee Act, and the City’s response for each requirement for the prior fiscal year.

ATTACHMENTS
Attachment I Staff Report
Attachment II Resolution
Attachment III Annual Report of Development Fees
CITY OF HAYWARD Printed on 12/2/2022Page 1 of 1
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DATE: December 6, 2022

TO: Mayor and City Council

FROM: Director of Finance

SUBJECT: Adopt a Resolution Accepting Transmittal of the Annual Mitigation Fee Act Report (AB1600)

RECOMMENDATION

That Council adopts a resolution (Attachment II) accepting the annual Mitigation Fee Act (AB 1600) report prepared to satisfy Government Code Subsection 66006(b)(1).

SUMMARY

The AB 1600 (Cortese) portion of the Mitigation Fee Act applies to fees charged in connection with the approval of development projects to defray the cost of public facilities. AB 1600 was enacted by the State Legislature in 1987, and applies to developer fees established, increased, or imposed on or after January 1, 1989. This legislation requires an annual report on the status of all eligible fees pursuant to the Mitigation Act to satisfy Government Code Subsection 66006(b)(1) requirements. This staff report includes four primary requirements that the City must satisfy in order to comply with the Mitigation Fee Act, and the City’s response for each requirement for the prior fiscal year.

BACKGROUND

It is common for local agencies to charge fees on new development to fund construction of capital facilities that will serve the development. The AB 1600 (Cortese) portion of the Mitigation Fee Act applies to fees charged in connection with the approval of development projects to defray the cost of public facilities. AB 1600 was enacted by the State Legislature in 1987, and applies to developer fees established, increased, or imposed on or after January 1, 1989. This legislation also requires an annual report on the status of all eligible fees pursuant to the Mitigation Act.

DISCUSSION

Below are the four primary requirements that the City must satisfy in order to comply with the Mitigation Fee Act, and the City’s response for each requirement for the prior fiscal year.

1. Requirement: Make certain determinations regarding the purpose and use of a fee and establish a “nexus” or connection between a development project (or class of projects) and the public improvement being financed with the fee.

Response: For all projects requiring development fees subject to AB 1600, the City complies with this requirement by establishing a connection between the development and public improvements to be financed. This is accomplished through the established fee structure, which calculates the amount of public improvements required to be financed based on the type of development.

2. Requirement: Segregate fee revenue from the General Fund in order to avoid comingling of capital facilities fees and general funds.

Response: AB 1600 development fees are held in special deposit accounts outside of the General Fund and are therefore not comingled with other fees or funds.

3. Requirement: The City must make findings each fiscal year describing the continuing need for the money for all fees that have been in the possession of the City for five years or more, and for which the dollars have not been spent or committed to a project.

Response: Water and sewer connection fees are both nonrefundable. The fees collected are used to finance the acquisition, construction, and improvement of public water and sewer facilities needed because of this new development. The required nexus for the water and sewer connection fees are described more particularly in Attachment III to this report. On December 19, 2019 the City adopted updated park impact fees in accordance with the Mitigation and Quimby Acts, therefore there are no findings to report.

4. Requirement: Refund any fees, including accumulated interest, for developer deposits in which the findings noted above cannot be made.

Response: No refunds are required at this time.

The City has satisfied the Mitigation Fee Act requirements for FY 2022.

ECONOMIC IMPACT

Compliance with AB 1600 allows the City to hold development deposits for future improvements to the community to offset the impacts of these new developments.

FISCAL IMPACT

This is an informational report and includes no fiscal impact is associated with it. Attachment III provides a summary of the applicable fees pursuant to the Mitigation Act for FY 2022.

This report is prepared annually in compliance with Assembly Bill 1600 and allows the City to hold development deposits for future improvements to the community to offset the impacts of these new developments.

STRATEGIC ROADMAP

This agenda item is a routine operational item and does not relate to any of the projects outlined in the Council’s Strategic Roadmap.

PUBLIC CONTACT

A public notice was published in The Daily Review on November 18, 2022, announcing the date, time, location, and subject matter of this report.

Prepared by: Marichu Maramba, Accounting Manager
Kaitlyn Byrne, Management Analyst I

Recommended by: Dustin Claussen, Director of Finance

Approved by:
________________________________________
Kelly McAdoo, City Manager

ATTACHMENT II

HAYWARD CITY COUNCIL

RESOLUTION NO. 22-

Introduced by Council Member _______________

RESOLUTION ACCEPTING THE REPORT AND ADOPTING FINDINGS RELATED

TO FEES COLLECTED FOR THE DEVELOPMENT PROJECTS SUBJECT TO THE

REQUIREMENTS OF THE MITIGATION FEE ACT

WHEREAS, Government Code section 66006, part of the Mitigation Fee Act, which is sometimes referred to as Assembly Bill 1600, requires the City to make findings each fiscal year de scribing the continuing need to retain fees collected from developers , but which remain unexpended and/or uncommitted after a period of five years; and

WHEREAS, The funds maintained for such period of time must be refunded if the requisite findings cannot be made; and

WHEREAS, The City has unexpended fees that it needs to retain for futu re expenditures.

NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Hayward hereby accepts the report of the Director of Finance dated December 6, 2022, including any attachments or exhibits thereto, and adopts the findings contained therein, a copy of which is attached to the staff report as Attachment III.

IN COUNCIL, HAYWARD, CALIFORNIA _______________________, 2022

ADOPTED BY THE FOLLOWING VOTE:

AYES: COUNCIL MEMBERS:

MAYOR:

NOES: COUNCIL MEMBERS:

ABSTAIN: COUNCIL MEMBERS:

ABSENT: COUNCIL MEMBERS:

ATTEST: ______________________________________
City Clerk of the City of Hayward

APPROVED AS TO FORM:

_________________________________________
City Attorney of the City of Hayward

ATTACHMENT III
City of Hayward
Annual Report on Development Impact Fees, Per Government Code 66000 AB 1600 Statement
Sewer System Connection Charges and Fees
Municipal Code, Chapter 11, Article 3, Section 11-3.255 authorizes the City to assess connection fees to any customer (new or existing) who installs new or additional fixtures, processes, or equipment, or otherwise causes an increase in wastewater discharge into the City sewer. Residential users shall be assessed for each unit. Commercial, Industrial, Institutional and Other Users will be calculated in accordance with the number of gallons of daily capacity required to serve the customers and the pounds per year of carbonaceous biochemical oxygen demand and suspended solids. https://www.hayward-ca.gov/your-government/documents/master-fee-schedule Beginning Balance, 7/1/2021 $ 31,554,044

REVENUES
Fees 4,897,975
Intergovernmental 41,879
Interest income (619,811)
Miscellaneous 1,089,205
Total revenues 5,409,248

EXPENDITURES
Percent
Financed with
Fees
Recycled Water Treatment and Distribution Facilities (07507) 16,465 26% Sludge Screening (07567) 2,190,978 100
Radio Telemetry and Transducer replacement (07119) 6,990 100 WPCF Headworks Channel Actuators (07714) 114,811 100
Trash capture implementation (07746) 70,796 0
Co-Generation System Maintenance Contract (07679) 85,339 0 WPCF Laboratory equipment replacement (07783) 89,945 100 Sewer Main Install 880/WILLIMET (07717) 159,890 100
GIS conversion/migration (07514) 6,000 100
Transfer out 3,998,314
Total Expenditures 6,739,528
Excess of revenues over/(under) expenditures (1,330,280) Ending balance, 6/30/22 $ 30,223,764
Note:

Transfer out in the amount of $1,747,314 was for debt service payments to fund Solar project and WPCF Improvement project Phase I.

Transfer out in the amount of $2,251,000 was for capital projects.

City of Hayward
Annual Report on Development Impact Fees, Per Government Code 66000 AB 1600 Statement
Water System Facilities Fees
Municipal Code, Chapter 11, Article 2, Section 11-2.05 authorizes the City to impose a Water System Facilities Fee upon every applicant for a new water service. The facilities fee will be based on the water meter size. https://www.hayward-ca.gov/your-government/documents/master-fee-schedule Beginning Balance, 7/1/2021 $ 45,043,069

REVENUES
Fees 5,483,173
Intergovernmental 61,428
Interest income (981,418)
Miscellaneous (190,298)
Total revenues 4,372,885

EXPENDITURES
Percent Financed
with Fees
Transfer out 535,128 0
Radio Telemetry & Transducer Replacement (07119) 8,282 100 D Street/Treeview/Maitland reservoir water quality pump upgrade (07108) 730 100
New .75 MG Tank - Garin reservoir (07183) 14,627 0
Groundwater Sustainability plan imp (07191) 320,759 100 GIS data development & conversion (07177) 6,000 100
Groundwater Management Plan (07021) 1,739 100
System seismic upgrades (07136) 37,520 100
Water office improvements (07139) 12,464 100
Total Expenditures 937,249 0
Excess of revenues over/(under) expenditures 3,435,636
Ending balance, 6/30/22 $ 48,478,705
Notes:

Transfer out in the amount of $265,000 was for capital projects.

Transfer out in the amount of $270,128 was for debt service payments to fund Recycled Water project.

City of Hayward
Annual Report on Development Impact Fees, Per Government Code 66000 AB 1600 Statement
Park-in-Lieu Fees
Municipal Code, Chapter 10, Article 16, Section 10-16.20 authorizes the City to impose a Park Impact Fee upon park and recreational facilities. The fee shall not exceed the cost to the City mitigating the impact of such development on park and recreational facilities in the City.
https://www.hayward-ca.gov/your-government/documents/master-fee-schedule Beginning Balance, 7/1/2021 $ 1,663,964

REVENUES
Fees - mitigation act 241,808
Fees - quimby act 2,085,005
Interest income -
Miscellaneous -
Total revenues 2,326,813

EXPENDITURES
Percent Financed
with Fees
Total Expenditures -
Excess of revenues over/(under) expenditures 2,326,813
Ending balance, 6/30/22 $ 3,990,777

CITY OF HAYWARD
Hayward City Hall
777 B Street
Hayward, CA 94541
www.Hayward-CA.gov
File #: CONS 22-698
DATE: December 6, 2022
TO: Mayor and City Council
FROM: Fire Chief

SUBJECT
Adopt a Resolution Authorizing the City Manager to Execute a Letter of Intent with the Alameda County Fire Department to Negotiate the Terms of a Proposal for Ambulance Services and/or Emergency Medical Services in Alameda County

RECOMMENDATION
That the Council adopts a resolution (Attachment II) authorizing the City Manager to execute a letter of intent with the Alameda County Fire Department to negotiate the terms of a proposal for ambulance services and/or emergency medical services in Alameda County.

SUMMARY
ACFD recently released a Request for Proposals (“RFP”) for private ambulance providers in order to develop a proposal that would be submitted to Alameda County in the summer of 2023 as a competitive bid for ambulance services in the County. Cities and Fire Departments within Alameda County have an opportunity to come together in negotiations with ACFD to refine this proposal and the terms and conditions of City participation in the model.

ATTACHMENTS
Attachment I Staff Report
Attachment II Resolution
Attachment III Draft Letter of Intent
CITY OF HAYWARD Printed on 12/2/2022Page 1 of 1
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DATE: December 6, 2022

TO: Mayor and City Council

FROM: Fire Chief

SUBJECT: Adopt a Resolution Authorizing the City Manager to Execute a Letter of Intent with the Alameda County Fire Department to Negotiate the Terms of a Proposal for Ambulance Services and/or Emergency Medical Services in Alameda County

RECOMMENDATION

That the Council adopts a resolution (Attachment I) authorizing the City Manager to execute a letter of intent with the Alameda County Fire Department to negotiate the terms of a proposal for ambulance services and/or emergency medical services in Alameda County.

SUMMARY

ACFD recently released a Request for Proposals (“RFP”) for private ambulance providers in order to develop a proposal that would be submitted to Alameda County in the summer of 2023 as a competitive bid for ambulance services in the County. Cities and Fire Departments within Alameda County have an opportunity to come together in negotiations with ACFD to refine this proposal and the terms and conditions of City participation in the model.

BACKGROUND

Currently, in Alameda County, 911 ambulance transport is provided in two ways: 1) by City fire departments that maintain “201” rights1 to provide ambulance transport (Berkeley, Albany, Piedmont, and Alameda); or 2) through a contract between the Alameda County Emergency Medical Services (EMS) Agency and a private ambulance provider (for the Cities of Oakland, Fremont, Hayward, Livermore, Pleasanton, and the contract cities of ACFD (Union City, San Leandro, Dublin)). This model has had varying levels of success and has struggled at times with financial viability over the years it has been in operation.

In April 2019, after concerns about the financial and operational viability of the private ambulance provider model arose, the Alameda County Board of Supervisors convened an

1 “201” Rights – http://emsaac.org/images/stories/2017-08- 14_EMSAAC_Position_Paper_Grandfathering_and_Exclusivity.pdf

Emergency Medical Services (EMS) re-design Task Force (“Task Force”) that was chaired by Hayward Fire Chief Garrett Contreras and EMS Agency Interim Director Anne Kronenburg. The Task Force evaluated these issues for over 18 months and had representatives from cities impacted by the Exclusive Operating Area (EOA) ambulance contract as well as hospitals, special districts, and long-term care facilities. The Task Force ultimately expressed overarching support for development of a Fire Based EMS delivery system, as explained further below.

The current contracted ambulance provider for Alameda County is Falck Ambulance. Falck has had the contract with Alameda County EMS Agency since July 1, 2019. For a variety of reasons (many of which were evaluated by the EMS re-design task force), Falck has struggled to meet contractual obligations, primarily related to ambulance response and transport times, at multiple points during the contract term. Falck was out of compliance in October, November, and December of 2021. The County placed Falck on a monitored performance improvement plan that included many factors to bring them into compliance. The Board of Supervisors has received information about these contract compliance issues during regular meetings and these issues have also been reported in the media2.

In October of 2021, at the monthly Alameda County Fire Chiefs Association meeting, Falck, with the support of EMS Agency staff, asked the Fire Chiefs for help in the form of staffing ambulances with Fire Agency Paramedics. As a result, Fire Chiefs within the County, in partnership with ACFD and local firefighter unions, have been working together for approximately one year to bring to fruition the recommendations of the EMS Re-design Task Force. While Falck has supported partnerships that would make the system solvent within Alameda County, it is unknown whether they will bid on the new County contract or partner with ACFD on the new model. This new model would generally look similar to the model in Contra Costa County, whereby the County Fire Department contracts with a private ambulance provider (not yet identified) to provide primary response service to cities within in the County. Surge capacity units would be provided by City Fire Departments on an as needed basis dependent on predicted call volumes. This model would be more financially viable than the current “private provider only” model because cost recovery rates for public entities are higher (statutorily) than for private providers.

ACFD recently released a Request for Proposals (“RFP”) for private ambulance providers in order to develop a proposal that would be submitted to Alameda County in the summer of 2023 as a competitive bid for ambulance services in the County. Cities and Fire Departments within Alameda County have an opportunity to come together in negotiations with ACFD to refine this proposal and the terms and conditions of City participation in the model.

DISCUSSION

In order to submit a competitive bid, in partnership with ACFD, in response to Alameda County’s ambulance RFP in the summer of 2023, the Fire Chiefs within the County

2 911 response times from Falck in Alameda County are 'a mess,' patients transported on fire engines - ABC7 San Francisco (abc7news.com)

recommend that the Cities of Oakland, Hayward, Fremont, and Livermore/Pleasanton (represented by their Fire Department JPA) execute a letter of intent with ACFD. The Letter of Intent contemplated in this report will enable the City of Hayward and the Hayward Fire Department to enter into negotiations with the Alameda County Fire Department to develop the commitments and obligations of each City fire department in the model described in the Background section above. The key elements of these negotiations will include, but will not be limited to:

1. Development of the Countywide ambulance deployment model to be proposed in response to the County EMS Agency RFP, including identification of alternate transport locations

2. ACFD’s plan for deploying ambulances within the Exclusive Operating Area (EOA), including system status management strategies and ambulance numbers, types, response times, and posting locations; this may include whether, to what extent, and on what terms, City of Hayward will provide ambulance services as an ACFD subcontractor

3. The extent to which ACFD and City of Hayward will provide cross-jurisdictional automatic and mutual aid for FRALS and/or ambulance services

4. In kind contributions of and/or access to facilities necessary to implement the deployment model, e.g. locating ACFD’s or its subcontractors’ ambulance units within the City of Hayward and associated fees

5. Staffing obligations and/or requirements of City fire departments

6. Shared use of technology, including access and sharing of data across the agencies

7. Cost Recovery - Amounts and mechanisms for ACFD to recover City of Hayward costs from payors, including administration fees to be charged by ACFD

ACFD is proceeding with this model and intends to submit a proposal in response to the County RFP for ambulance services in the summer of 2023. If the cities do not engage in these negotiations, there would be limited city input into the proposal and the terms and conditions of this model would be dictated exclusively by ACFD and their proposal. If negotiations are unsuccessful, there would be no obligation for a city to participate in the ultimate proposal, and the Alameda County EMS Agency would still be obligated to provide 911 ambulance response services to that community. However, the current service concerns and response time delays would likely continue.

The current milestones for this process looks like:

November 10, 2022: Proposals due for private partner with ACFD to submit for Countywide Ambulance proposal
December 2022/January 2023: City Councils authorize execution of letters of intent January 2023: Countywide Ambulance RFP* released
April/May 2023: Countywide Ambulance proposals (including possible ACFD partnership) due*; State approval required prior to BOS award of contract

June/July 2023: Countywide Ambulance award of contract*

* All County RFP dates are subject to change

FISCAL IMPACT

At this stage of the process, there are no fiscal impacts other than the staff time needed to negotiate with the Alameda County Fire Department. Those negotiations will determine the ultimate fiscal, in kind, and/or staffing implications of the proposal for ambulance services.

Once this proposal has been finalized, staff will share details of the proposal with the City Council and request authorization to enter into a formal MOU or other agreement with ACFD.

NEXT STEPS

If approved and authorized by Council, the City Manager will execute the Letter of Intent, and staff will begin negotiations with the Alameda County Fire Department on the terms of the proposal to be submitted to the County in response to the upcoming ambulance RFP. Once this proposal has been finalized, staff will share details of the proposal with the City Council and request authorization to enter into a formal MOU or other agreement with ACFD.

Prepared and Recommended by: Garrett Contreras, Fire Chief

Approved by:

_________________________________________
Kelly McAdoo, City Manager

ATTACHMENT II

HAYWARD CITY COUNCIL

RESOLUTION NO. 22-_____

Introduced by Council Member __________________

RESOLUTION AUTHORIZING THE CITY MANAGER TO EXECUTE A LETTER

OF INTENT WITH THE A LAMEDA COUNTY FIRE DEPARTME NT TO

NEGOTIATE THE TERMS OF A PROPOSAL FOR AM BULANCE SERVICE S

AND/OR EMERGENCY MEDICAL SERVICES IN ALAMEDA COUNTY

WHEREAS, in April 2019 after concerns about the financial and operational viability of the private ambulance provider m odel, the Alameda County Board of Supervisors convened an Emergency Medical Services (“EMS”) re-design Task Force (“Task Force”); and

WHEREAS, the Task Force ultimately expressed overarching support for development of a Fire Based EMS delivery system; and

WHEREAS, the Alameda County Fire Department is developing an ambulance service proposal in response to the upcoming Request for Proposals that will be issued by Alameda County in the spring of 2023; and

WHEREAS, the Alameda County Fire Department wishe s to partner with other Fire Departments within Alameda County to develop a new partnership model for ambulance services that will address current issues with response times and financial feasibility; and

WHEREAS, upon finalizing the partnership model , staff will return to Council and present further details regarding the City of Hayward’s obligations and commitments under this new model.

NOW, THEREFORE, BE IT RESOLVED by the City Council of Hayward that the City Manager is authorized to execute a Lett er of Intent with the Alameda County Fire Department to negotiate the terms and conditions of a partnership model in response to the upcoming Request for Proposals that will be issued by Alameda County in the spring of 2023.

ATTACHMENT II

IN COUNCIL, HAYWARD, CALIFORNIA____________________,2022

ADOPTED BY THE FOLLOWING VOTE:

AYES: COUNCIL MEMBERS:

MAYOR:

NOES: COUNCIL MEMBERS:

ABSTAIN: COUNCIL MEMBERS:

ABSENT: COUNCIL MEMBERS:

ATTESTED: ________________________________________
City Clerk of the City of Hayward

APPROVED AS TO FORM:

__________________________________________
City Attorney of the City of Hayward

ATTACHMENT III

LETTER OF INTENT BETWEEN

THE ALAMEDA COUNTY FIRE DEPARTMENT AND CITY OF HAYWARD

This Letter of Intent (“LOI”) is made and entered into as of the Effective Date set forth below, by and between the Alameda County Fire Department (“ACFD”) and City of Hayward (each, a “Party” and collectively, the “Parties”).

This LOI is made with reference to the following facts and circumstances:

A. The County of Alameda (“County”) has tentatively scheduled for release in February 2023, a request for proposals for emergency ambulance services and/or emergency medical services (“EMS”) within County’s exclusive operating area (“EOA”) with service to begin July 1, 2024 (the “Solicitation”).

B. ACFD intends to submit a proposal (“the Proposal”) in response to the Solicitation (.

C. The Parties are engaged in informational discussions regarding the Proposal, as well as opportunities in connection with the Solicitation, the Proposal, and any resulting contract between County and ACFD , including but not limited to first response advanced life support (“FRALS”) services.

D. The Parties have determined that working collectively and leveraging their diverse capabilities will enable ACFD to develop a competitive Proposal that meets or exceeds the Solicitation’s requirements, which neither of the Parties could accomplish on their own.

ACCORDINGLY, the Parties agree as follows:

1. ACFD’s Role s and Responsibilities . ACFD agrees to the following roles and responsibilities under this LOI:
a. Proposal Development . ACFD shall plan, develop, draft, and submit to County, the Proposal in accordance with the Solicitation’s specifications and requirements and applicable laws and regulations.
b. Consultation and Negotiations. ACFD shall consult and negotiate with City of Hayward regarding the extent of City of Hayward participation in ACFD’s Proposal and resulting contract with County, if any, as ACFD’s subcontractor for related services, as well as the terms and conditions of any subcontracting arrangement between the Parties.

2. City of Hayward ’s Roles and Responsibilit ies. City of Hayward agrees to the following roles and responsibilities under this LOI:
a. Proposal Development . City of Hayward shall assist, as reasonably requested, ACFD to plan, develop, draft, and submit to County, the Proposal in accordance with the So licitation’s specifications and requirements and applicable laws and regulations.

ATTACHMENT III

b. Consultation and Negotiations. City of Hayward shall consult and negotiate with ACFD regarding the extent of City of Hayward participation in ACFD’s Proposal and resulting co ntract with County, if any, as ACFD’s subcontractor for related services, as well as the terms and conditions of any subcontracting arrangement between the Parties.
c. Cooperation with ACFD Subcontractors and Consultants. City of Hayward shall cooperate with subcontractors and consultants retained by ACFD to assist with the development of the Proposal and negotiation of a resulting contract with County, if any.

3. Subjects for Consultation and Negotiations . The subjects that the Parties shall consult on, and negotiate over, include but are not limited to the following:
a. Service Integration. The integration of FRALS and ambulance services into a unified incident response system within the EOA.
b. FRALS. City of Hayward’s provision of FRALS and associated fees. c. Ambulance Stations . Locating ACFD’s or its subcontractors’ ambulance units within City of Hayward and associated fees.
d. Ambulance Deployment Plan . ACFD’s plan for deploying ambulances within the EOA, including system status management strategies and ambulance numbers, types, response times, and posting locations. e. City of Hayward ’s Provision of Ambulance Services . Whether, to what extent, and on what terms, City of Hayward will provide ambulance services as an ACFD subcontractor.
f. Automatic and Mutual Aid . The extent to which ACFD and City of Hayward will provide cross -jurisdictional automatic and mutual aid for FRALS and/or ambulance services.
g. Cost Recovery . Amounts and mechanisms for ACFD to recover City of Hayward’s costs from payors, including administ ration fees to be charged by ACFD.
h. Personnel Matters . Relations between, and usage of, the firefighter and EMS personnel employed by ACFD, its subcontractors, and/or City of Hayward.

4. No Obligation to Contract . This LOI shall not be construed as creating an y legal obligation for any Party or their consultants, subcontractors, and agents to proceed with or enter into any transaction or agreement.

5. No Financial Obligation . This LOI does not obligate either party financially; it merely serves as a basis to identify the level of interest regarding the development

ATTACHMENT III

and participation in ACFD’s Proposal and resulting contract with County, if any, as ACFD’s subcontractor for rela ted services, as well as the terms and conditions of any subcontracting arrangement between the Parties.

6. Effective Date and Term.
a. The “Effective Date” of this LOI shall be the date of the last Party signature. b. This LOI shall remain in effect through July 1, 2024, or the date when ACFD implements services under a contract with County for emergency ambulance services, whichever is later.

7. Termination. Either Party may terminate its participation in this LOI by providing 30 days’ advance written notice of its termination to the other Party.

8. Independent Contractor Status It is understood and agreed that the Parties shall perform as independent contractors under this LOI and in respect to their relationships with each other and that they are not and shall not be deemed an employee, officer, or agent of the other Parties. It is further understood and agreed that the Parties, their officers, agents, and employees shall in no event be entitled to any benefits to which the employees of the other Parties are entitled, including, but not limited to, overtime, retirement, worker’s compensation, and leave benefits.

9. Jurisdiction and Venue . The laws of the State of California shall govern the interpretation and performance of this LOI. Venue for any litigation relating to the formation, interpretation or performance of this LOI shall be in Alameda County.

10. Modification. This LOI may not be modified, nor may compliance with any of its terms be waived, except by written instrument executed and approved in the same manner as this LOI.

11. Notice.
a. Any notices required hereunder shall be given, in writing, as follows:

If to ACFD, to:

William McDonald, Fire Chief
Alameda County Fire Department
Administration Office
6363 Clark Ave, Dublin CA 94568
Phone: 510-632-3473 or 925-833-3437
[email protected]

If to City of Hayward, to:

To the City: Attn: Kelly McAdoo, City Manager
City of Hayward

ATTACHMENT III

777 B Street, 4 th Floor
Hayward, CA 94541 -
5007

b. Notices shall be deemed given when received if by facsimile or by electronic means (if a record of receipt is kept by the sending party showing the date and time of receipt) or three (3) days following deposit in the United States Mail, postage prepaid, to the addressees set forth in subsec tion (a) above.

12. Authority to Execute. The individuals executing this LOI represent and warrant that they have the legal capacity and authority to do so on behalf of their respective legal entities.

13. Counterparts. This Agreement may be executed in any numbe r of counterparts, each of which shall be deemed an original, but all such counterparts together shall constitute but one and the same instrument.

IN WITNESS WHEREOF, the Parties have executed this LOI:

ALAMEDA COUNTY FIRE

DEPARTMENT

CITY OF HAYWARD

William McDonald, Fire Chief Garrett Contreras, Fire Chief Date

Date Kelly McAdoo, City Manager Date

Approved as to form:

Attest:___________________________________
Miriam Lens, City Clerk Date

Approved as to Form and Procedure:

Counsel for Alameda County Fire Department

Michael S. Lawson, City Attorney, City of
Hayward

CITY OF HAYWARD
Hayward City Hall
777 B Street
Hayward, CA 94541
www.Hayward-CA.gov
File #: PH 22-065
DATE: December 6, 2022
TO: Mayor and City Council
FROM: Assistant City Manager/Development Services Director

SUBJECT
Density Bonus Ordinance: Introduce an Ordinance Related to Text Amendments to Chapter 10 (Planning, Zoning, and Subdivisions) of the Hayward Municipal Code for the Adoption and Updates to the City’s Density Bonus Ordinance and Adopt a Resolution Supporting the Proposed Zoning Text Amendments and Approving an Addendum to the Hayward 2040 General Plan Environmental Impact Report for the Administration of a New Density Bonus Program in the City of Hayward

RECOMMENDATION
That the Council adopts a resolution (Attachment II) supporting the proposed Text Amendments to Chapter 10, Article 17 and Article 19, of the Hayward Municipal Code for the adoption and updates to the City’s Density Bonus Ordinance, including an Addendum to the Hayward 2040 General Plan (Attachment IV) and introduces an Ordinance for Zoning Text Amendments to Chapter 10, Planning, Zoning and Subdivisions (Attachment III) of the Hayward Municipal Code regulating development seeking a Density Bonus.

SUMMARY
The City’s existing Density Bonus Ordinance, adopted in 2005, does not conform with current State law.

The current State law, which is required to be implemented by local jurisdictions, offers more density, more incentives, and additional relaxed parking requirements to projects that qualify for the density bonus. While the State’s Density Bonus formula takes precedence, the City can change the formula to offer a higher density bonus and more incentives for certain projects, but under no circumstances can the City offer smaller density bonuses or fewer incentives than the State formula mandates. Staff is proposing to update the City’s Density Bonus Ordinance to reflect four main changes:

1. Exceed the State’s Density Bonus Maximum by 5% for all density bonus projects that provide on- site affordable units;

2. Exceed the State's Density Bonus Maximum by 10% for projects that provide on-site affordable units and target special populations;

3. Increase the number of incentives/concessions for projects that exceed the minimum on-site affordable housing requirements under the City’s Affordable Housing Ordinance (AHO) in order to CITY OF HAYWARD Printed on 12/2/2022Page 1 of 2
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File #:PH 22-065
encourage development of more affordable units; and

4. Streamline the review of Density Bonus applications to allow new applications to be considered by the highest approving body.

These recommendations are based on previous feedback provided by the Council, Planning Commission, and the City’s Homelessness Housing Task Force (HHTF). Staff is proposing to streamline the review of Density Bonus applications and is working on a policy for fee deferrals to offset upfront costs associated with affordable housing construction to help overall project feasibility. Staff believes that the recommended updates to the City’s Density Bonus Ordinance will further incentivize affordable housing production and promote housing for several target populations as identified in the recently completed Displacement Study.

ATTACHMENTS
Attachment I Staff Report
Attachment II Resolution Text Amendments
Attachment III Ordinance Text Amendments
Attachment IV CEQA Addendum Hayward 2040 General Plan
Attachment V Recommendations Not Included with the Density Bonus Ordinance Attachment VI Stakeholder Interview Comments
Attachment VII Draft Planning Commission Minutes of 11/10/22 CITY OF HAYWARD Printed on 12/2/2022Page 2 of 2
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DATE: December 6, 2022

TO: Mayor and City Council

FROM: Assistant City Manager/Development Services Director

SUBJECT: Density Bonus Ordinance: Introduce an Ordinance Related to Text Amendments to Chapter 10 (Planning, Zoning, and Subdivisions) of the Hayward Municipal Code for the Adoption and Updates to the City’s Density Bonus Ordinance and Adopt a Resolution Supporting the Proposed Zoning Text Amendments and Approving an Addendum to the Hayward 2040 General Plan Environmental Impact Report for the Administration of a New Density Bonus Program in the City of Hayward

RECOMMENDATION

That the Council adopts a resolution (Attachment II) supporting the proposed Text Amendments to Chapter 10, Article 17 and Article 19, of the Hayward Municipal Code for the adoption and updates to the City’s Density Bonus Ordinance, including an Addendum to the Hayward 2040 General Plan (Attachment IV) and introduces an Ordinance for Zoning Text Amendments to Chapter 10, Planning, Zoning and Subdivisions (Attachment III) of the Hayward Municipal Code regulating development seeking a Density Bonus.

SUMMARY

The City’s existing Density Bonus Ordinance, adopted in 2005, does not conform with current State law. The current State law, which is required to be implemented by local jurisdictions, offers more density, more incentives, and additional relaxed parking requirements to projects that qualify for the density bonus. While the State’s Density Bonus formula takes precedence, the City can change the formula to offer a higher density bonus and more incentives for certain projects, but under no circumstances can the City offer smaller density bonuses or fewer incentives than the State formula mandates. Staff is proposing to update the City’s Density Bonus Ordinance to reflect four main changes:

1. Exceed the State’s Density Bonus Maximum by 5% for all density bonus projects that provide on-site affordable units;

2. Exceed the State's Density Bonus Maximum by 10% for projects that provide on-site affordable units and target special populations;

3. Increase the number of incentives/concessions for projects that exceed the minimum on-site affordable housing requirements under the City’s Affordable Housing Ordinance (AHO) in order to encourage development of more affordable units; and

4. Streamline the review of Density Bonus applications to allow new applications to be considered by the highest approving body.

These recommendations are based on previous feedback provided by the Council, Planning Commission, and the City’s Homelessness Housing Task Force (HHTF). Staff is proposing to streamline the review of Density Bonus applications and is working on a policy for fee deferrals to offset upfront costs associated with affordable housing construction to help overall project feasibility. Staff believes that the recommended updates to the City’s Density Bonus Ordinance will further incentivize affordable housing production and promote housing for several target populations as identified in the recently completed Displacement Study.

BACKGROUND

As mentioned above, the City’s existing Density Bonus Ordinance1 adopted in 2005 does not conform with current State law. As part of this project, the current Density Bonus Ordinance, contained in Chapter 10, Article 19 of the Hayward Municipal Code, will need to be repealed and replaced with a new Density Bonus Ordinance that, at minimum, complies with State guidelines and reflects the direction previously provided by Council that includes additional bonuses and concessions specific to Hayward. Additional details on the State’s density bonus laws and the feedback received from the Council, Planning Commission, and HHTF are included below.

Summary of State Density Bonus

The Density Bonus Law2 is about creating a package of incentives intended to help make the development of affordable and other special needs housing economically feasible. The main incentives include permitting a density increase beyond the local limits, providing incentives or concessions that reduce development costs, and waiving development standards that prohibit development at the approved density. Cities are required to grant a density bonus and other incentives and/or concessions to projects which contain one of the following:

• At least 5% of the housing units are restricted to very-low-income residents. • At least 10% of the housing units are restricted to low-income residents. • At least 10% of the housing units in a for-sale common interest development are restricted to moderate-income residents.
• 100% of the housing units (other than manager’s units) are restricted to very-low, low, and moderate-income residents (with a maximum of 20% moderate-income). • At least 10% of the housing units are for transitional foster youth, disabled veterans, or unhoused individuals, with rents restricted at the very-low-income level. • At least 20% of the housing units are for low-income college students in housing dedicated for full-time students at accredited colleges.

1 Existing Density Bonus Ordinance:
https://library.municode.com/ca/hayward/codes/municipal_code?nodeId=HAYWARD_MUNICIPAL_CODE_CH10PLZOSU_ART19DEBOOR 2 Meyers Nave Guide to California Density Bonus Law:
https://www.meyersnave.com/wp-content/uploads/California-Density-Bonus-Law_2022.pdf

• The project donates at least one acre of land to the city or county for very-low income units, and the land has the appropriate general plan designation, zoning, permits and approvals, and access to public facilities needed for such housing. • The project is a senior citizen housing development (no affordable units required). • The project is a mobile home park, age-restricted to senior citizens (no affordable units required).

Projects that exceed the minimum requirements can get a higher density bonus and are eligible for additional incentives/concessions and waivers.

Joint City Council and Planning Commission Work Session. On February 1, 20223, the Council and Planning Commission held a Joint Work Session to review and discuss the updates to the City’s Density Bonus Ordinance for compliance with the State Density Bonus Laws and Residential Objective Standards. The Council and Planning Commission indicated support for:

• Creating an ordinance that is flexible enough to accommodate future changes by citing State law instead of codifying the full state legislation. • Aligning the density bonus approval process with the standard entitlement process to streamline housing permitting.
• Offering incentives above what State law offers.
• Tailoring the Ordinance to meet Hayward’s housing needs. • Pre-defining approved incentives/concessions.

Based on the feedback from the Council and Planning Commission staff has developed a draft Ordinance that reflects changes in State law as well as streamlines the review of Density Bonus applications.

Some of the priorities identified by the Council and Planning Commission will be useful when negotiating community benefits related to some land use entitlements (Planned Development rezonings or General Plan Amendments). In some cases, the priorities identified increase development costs instead of decreasing them and therefore are not relevant to the density bonus. Details about the development priorities which are not included in the discussion of the density bonus project are included in Attachment V.

Homelessness Housing Task Force. On June 29, 20224, the HHTF held a work session to review several options proposed by staff related to updates to the City’s Density Bonus Ordinance. In general, the HHTF supported incentives for certain target populations (senior housing, student housing, and family housing), supported incentives for universal design, and supported additional concessions/incentives to help make projects more feasible.

In response to HHTF feedback, staff refined the recommendations and streamlined the proposed Ordinance to allow applicants more flexibility in obtaining these incentives and help

3 February 1, 2022, Joint Session Staff Report and Attachments https://hayward.legistar.com/LegislationDetail.aspx?ID=5397460&GUID=B175606F-4591-4D2E-B41A-328BD292B038&Options=&Search= 4 June 29, 2022, Homelessness Housing Task Force
https://hayward.legistar.com/MeetingDetail.aspx?ID=984031&GUID=DE1B9C86-30F8-45F0-AF24-276EF93176B6&Options=info|&Search=

administration of the density bonus program be more efficient for staff. Additional analysis of these components is detailed in the Discussion section below.

City Council Work Session. On October 18, 20225, the Council held a work session to review staff’s recommended updates to the Density Bonus Ordinance (as detailed in the Discussion section below). Council expressed overall support for proposed updates but highlighted their concern for granting any additional concessions that further reduce parking requirements beyond what the State already allows and highlighted the need for additional teacher and faculty housing. In response to Council feedback, staff has detailed the options to support additional teacher/faculty housing and included more details about the parking requirements in the sections below.

Teacher/Faculty Density Bonus. As previously described, the Council expressed a desire to include teachers or school faculty as a target population to assist those individuals with additional housing options. Although City staff is not proposing to provide specific incentives for teachers or school faculty as part of this Density Bonus project, new State legislation (AB2295), effective January 2024, will make it easier for school districts to build affordable housing for their teachers and staff. Specifically, AB2295 will allow staff housing to be built on any property owned by a school district without requiring the district to request zoning changes from city or county officials if the housing development satisfies certain conditions, including other local objective zoning standards, objective subdivision standards, and objective design review standards. The legislation deems a housing development that meets these requirements consistent, compliant, and in conformity with local development standards, zoning codes or maps, and the general plan. In addition, the legislation exempts a housing development project subject to these provisions from various requirements regarding the disposal of surplus land. Currently most of the school district property in the City of Hayward is zoned for residential uses and could accommodate new housing units but contain a Public Quasi-Public General Plan land use designation, which does not allow for residential uses.

In October 2022, the Hayward Unified School District sent a Notice to the City and other interested stakeholders announcing the potential sale or lease of eight (8) district owned properties, which are currently located in zoning districts that allow for residential uses, but contain a Public Quasi-Public (PQP) General Plan land use designations. Per AB2295, each of these properties could be developed for additional teacher, faculty, or affordable housing without a General Plan Amendment so long as the project complies with certain conditions, detailed in the legislation. Until such time as new faculty or teacher housing is built on school district property, staff will continue to promote all other affordable housing available to teachers and school faculty.

Density Bonus Parking Requirement. As noted earlier, the Council expressed concern with additional reductions to the amount of parking required to qualify for density bonuses.

California Government Code Section 65915(p) establishes certain maximum parking ratios for density bonus projects. A project that meets the applicable ratio under the Government

5 City Council Work Session 10.18.22
https://hayward.legistar.com/MeetingDetail.aspx?ID=999763&GUID=DEF02F36-948B-42C3-A6D3-BDC6F5E6BA08&Options=info|&Search=

Code may take advantage of the ratio without using a concession or waiver. If a project requires a further reduction in parking standards from what the local agency otherwise requires, then that further reduction must be sought as a concession or waiver.

The reduced parking standard generally applies to projects that are 100% affordable and/or located near a major transit stop. In the event an applicant is requesting to provide fewer spaces than State law allows, the request would qualify as an incentive or concession and the applicant would be required to provide reasonable documentation to demonstrate that the request qualifies per State law. While the City is somewhat limited in rejecting these requests, staff has included a requirement in the draft Ordinance that requires the applicant provide a Transportation Demand Management (TDM) plan to help reduce parking demand. To date, the City has not received any requests or approved any additional parking reductions beyond what the State already allows as part of a density bonus project and in fact many of the recently approved Density Bonus projects, including the Maple and Main, have proposed parking that meets or exceeds the City’s Off-Street Parking Regulations in order to meet resident needs.

In the event the Council would like to impose a higher parking requirement, State law does allow cities to require a higher parking ratio for certain housing projects if the higher parking ratio is supported by a specific parking study that demonstrates a higher parking requirement is necessary. As previously mentioned, staff is currently working with a transportation consultant to complete a parking analysis as part of the Residential Design Study and expects that analysis to be completed in early 2023. Once completed, staff plans to schedule work session(s) with the Planning Commission and Council to present those findings and discuss next steps.

Planning Commission Work Session. On November 10, 2022, the Planning Commission held a work session to discuss and provide feedback to Council on the proposed Density Bonus Ordinance revisions. The Planning Commission was generally supportive of the proposed revisions including the flexibility that the Ordinance would provide to developers to ensure feasibility of residential development projects providing affordable units. The Planning Commission requested clarification from staff at the meeting on the increased density bonus above the requirements in State law, the applicable parking ratios, and requested additional policy clarification on how fee deferrals and fee waivers would be applied. The Planning Commission also recommended that staff compare the proposed Ordinance to other jurisdictions and routinely monitor the City’s program to ensure the City remains competitive with surrounding jurisdictions and is meeting the City’s goal to produce more on-site affordable units. When developing the draft Ordinance, City staff and the City’s consultant did review Density Bonus Ordinances from other jurisdictions and confirmed that most cities defaulted to the State’s Density Bonus law without providing any additional density bonus increases, concessions, or incentives. Following feedback from the Council, HHTF, and Planning Commission, staff believes the additional density increases proposed by the Hayward program will further incentivize housing production and result in an increase in the number of on-site units provided.

DISCUSSION

Based on the feedback from the Council, Planning Commission, and HHTF, staff is proposing four main changes from the City’s existing Density Bonus Ordinance that will provide additional cost saving incentives that could increase the percentage of on-site affordable housing and/or deepen the level of affordability of affordable units included in density bonus projects. Staff believes that the recommended density bonus increases in excess of the State’s requirements, coupled with the potential for additional incentives/concessions will encourage the development of on-site affordable units in the City, streamline the review of applications, and help incentivize construction of housing in Hayward. The proposed Density Bonus Ordinance is included as Attachment III and summarized in Table 1 below.

Table 1: Existing State Density Bonus vs. Proposed Hayward Density Bonus Summary

Additional Density Bonus for On-Site Affordable Units

As shown in Table 1, staff is recommending a 5% density bonus increase over the maximum density bonus for projects that provide on-site affordable units and meet the State’s criteria.

Not only will this option support the construction of additional housing to assist the City in meeting its Regional Housing Needs Assessment (RHNA) requirement but will also create additional affordable units throughout the City, which is essential given the ongoing housing crisis throughout the State.

Additional Density Bonus for Special Target Populations

Staff is also recommending an additional density bonus for projects that both meet the State’s criteria for a maximum density bonus and target special needs populations. The State Density Bonus Law currently incentivizes the development of senior housing, student housing, and housing for foster youth, disabled veterans, and unhoused individuals by allowing a 20 to 35 percent increase in density and, in some cases, without inclusion of any affordable housing.

Based on feedback from the Council, Planning Commission, and HHTF, direction was provided to create additional density bonuses for housing that accommodate certain target populations, including the following:

Target Population
Served
State Required
Restricted
Affordable Units
State
Maximum
Density Bonus
Hayward
Maximum
Density
Hayward Maximum
Density Increase for
Special Targeting
Very Low Income 15% 50% 55% 60%
Low Income 24% 50% 55% 60%
Moderate Income 44% 50% 55% 60%
Foster
Youth/Disabled
Veterans/Unhoused
Individuals
10% restricted at
very low Income
20% 25% 30% (15% restricted at very
low income)
College Students 20% Low-Income
Student
35% 40% 45% (25% restricted low-
income students)

 Rental projects that provide more than 20% of the rental units for large families (3+ bedrooms).
 Projects that incorporate Universal Design features in more than 20% of the units.  Senior housing projects as defined by Government Code Section 65915, as it may be modified from time to time.
 College student housing projects as defined by Government Code Section 65915, as it may be modified from time to time.
 Projects with units set-aside for foster youth, disabled veterans, or individuals experiencing homelessness as defined by Government Code Section 65915, as it may be modified from time to time.

The feedback received is also consistent with the findings of the Displacement Study6, which identified a need for additional housing for certain populations. To further incentivize the construction of housing for these target populations, staff is recommending an additional 5% increase, in addition to the 5% baseline increase, for a 10% total density bonus increase for projects that serve these populations, which would be over and above the State’s maximum.

Staff does not recommend increasing the density bonus to encourage the development of affordable senior housing units instead of market rate senior projects. The recommended density bonus increases for Special Target Populations are shown in Table 1 above and detailed in Attachment III.

Increase the Number of Incentives/Concessions for On-Site Affordable Units

In addition to the recommended increases in Density Bonus for projects that provide on-site affordable units, staff is also recommending projects receive an additional incentive or concession to help project feasibility as shown in Table 2 below.

Table 2: Existing State vs. Proposed Hayward Incentives/Concessions No. of Incentives/
Concessions
Required by State
Proposed No. of
Incentives/
Concessions
Percentage of VLI
Units
Percentage of LI
Units
Percentage of MI
Units
1 1* 5% 10% 10%
2 3 10% 17% 20%
3 4 15% 24% 30%
4 5 100% (LI/VLI) or 100% (MI 20% /LI 80%)
*The first tier is not increased because compliance with the Affordable Housing Ordinance’s on-site affordable housing requirement make the project eligible for one incentive/concession.

Per current State law, cities are required to provide one or more incentives or concessions to each project which qualifies for a density bonus (except for market rate senior projects with no affordable units, and land donated for very-low-income housing). A concession or incentive is defined as:

6 Displacement Study:
https://www.hayward-ca.gov/sites/default/files/documents/Hayward-Displacement-Study-w- Appendix.pdf#:~:text=The%20City%20of%20Hayward%20Displacement%20study%20provides%20a,analysis%2C%20the%20study%20co mpares%20Alameda%20County%20and%20Hayward.

 A reduction of site development standards or a modification of zoning code or architectural design requirements, such as a reduction of minimum square footage requirements;
 approval of mixed-use zoning; or
 other regulatory incentives or concessions which result in identifiable and actual cost reductions.

The number of required incentives/concessions is based on the percentage of affordable units. The City is required to grant the incentives/concessions proposed by the developer unless it finds that the proposed concession or incentive does not result in identifiable and actual cost reductions; would cause a public health or safety problem; would cause an environmental problem; would harm historical property, or would be contrary to law.

A concession is supposed to result in a cost savings for affordable housing, and the City can deny a concession if it finds that a requested concession will not result in a cost savings for affordable housing. In the event the City does deny a request for incentive/wavier, the City has the burden to prove the absence of cost savings; however, the City can require the applicant submit reasonable documentation demonstrating such a savings. Staff has added this requirement to the draft Ordinance (Attachment III) in order to ensure that any concession being requested is tied to affordable housing production.

In response to recommendations from the Council, Planning Commission, and HHTF, staff has revised the previous approach for pre-defined incentives to provide applicants with more flexibility and be less prescriptive, as summarized in Table 2. For projects that are 100% affordable or exceed the City’s Affordable Housing Ordinance requirements by providing more on-site affordable units or units that provide deeper levels of affordability staff is recommending that one additional incentive/concession be provided.

Streamlined Density Bonus Process

To apply for a density bonus under the City’s current Ordinance, an applicant must submit a Density Bonus Application along with a description of what is being requested, why the project qualifies, pay the planning entitlement fee (as specified in the Master Fee Schedule), and provide any supporting and reasonable documentation to demonstrate the project qualifies for a density bonus. All Density Bonus applications in the City are reviewed and approved by the Planning Commission by default. However, the application moves to the Council if the project involves another permit or entitlement requiring Council approval such as a rezoning or General Plan Amendment. In the latter case the Planning Commission makes a recommendation to the Council regarding project approval or denial and adoption of any applicable CEQA documents including a recommendation on the density bonus request.

As part of the Ordinance update staff has updated the approving authority so that applications received under this new Ordinance could be considered by the highest approving body which in some cases may be an administrative staff approval. Streamlining density bonus applications will save the developer and City staff time and money, and it supports the goals identified in the two housing work plans adopted by Hayward to incentivizing housing production.

Fee Waivers (impact fees such as traffic and park fees). Council has already approved waiver of park fees and traffic impact fees for 100% affordable housing projects and reduction of fees for the on-site affordable housing units provided as part of a mixed-income project.

Developers would not need to request this concession, but staff would promote this incentive to incentivize on-site affordable housing.

Fee Deferral (utility, sewer, water, and infrastructure connections). Although utility fee deferral is not part of the actual Municipal Code update, staff is proposing, deferral of some utility connection fees that would help off-set some upfront financial obligations that applicants are required to pay. Currently, utility connection fees are due prior to installation of the meter and are necessary for maintaining infrastructure. These fees could be deferred for the affordable units until issuance of certificate of occupancy and would be made a condition of project approval. Deferral of fees saves the developer the cost to finance the fees. Following Ordinance adoption, staff will continue to work with the Public Works Department to determine if this remains a viable option and to ensure that risk of non-payment is minimized.

Staff envisions this would be accomplished by requiring the developer to sign an agreement that would be recorded to title of the property along with a lien or deed of trust. This would prevent sale of the property prior to payment of the connection fee due to the City. Staff can promote this option to developers in the event on-site affordable units are provided and fee deferrals are necessary to make a project feasible.

Environmental Review

In 2014, the City certified the EIR for the Hayward 2040 General Plan. The General Plan represents the community’s view of its future and expresses the community’s conservation and development goals through the year 2040. An Addendum to the General Plan EIR (Attachment IV) was prepared pursuant to Section 15164 of the CEQA guidelines which states, “The lead agency or a responsible agency shall prepare an addendum to a previously certified EIR if some changes or additions are necessary, but none of the conditions described in Section 15162 calling for preparation of a subsequent EIR have occurred.”

The proposed modifications to the General Plan EIR described in the attached Addendum would not require major revisions to the General Plan EIR due to new or substantially increased significant environmental effects. The analysis contained in the Environmental Checklist confirms that the modified project is within the scope of the General Plan EIR and would have no new or more severe significant effects and no new mitigation measures are required. Therefore, no subsequent or supplemental EIR or further CEQA review is required.

STRATEGIC ROADMAP

In January 2020, the Council adopted six Strategic Priorities as part of its three-year Strategic Roadmap. This agenda item supports the Strategic Priority of Preserve, Protect and Produce Housing for all. Specifically, this item relates to the implementation of the following:

Project 4: Implement housing incentives and production work plan in accordance to state housing limits
Project 4b: Amend Density Bonus Ordinance

FISCAL IMPACT

The budget for this project is $75,000, which is covered and paid through a State Housing and Community Development SB2 Planning Grant awarded in 2019. At this time, staff does not anticipate any additional costs associated with this project or fiscal impacts to the City’s General Fund.

PUBLIC CONTACT

Outreach to Housing Developers. Revisions to the Density Bonus will only be effective if the proposed changes are useful to developers. In response to the Council and Planning Commission’s direction, staff conducted outreach to twenty housing developers, including affordable/non-profit, and market-rate housing developers, which consisted of a survey with the following seven questions emailed to the developers on May 6, 2022, with interviews scheduled from May 9, 2022, to May 18, 2022:

 What cost savings concessions would incentivize more affordable units, deeper affordability or some of the other City Priorities listed below?  Would you like to have more concessions than is currently allowable under State Density Bonus Law?
 Do you have any experience in other cities using expedited entitlement process - explain how that process works compared to our normal process?  Would it be beneficial to have a density bonus that exceeds 50% for mixed-income projects?
 Do you have any examples of fee waiver, reduction, or deferral programs that have been implemented in other Cities?
 Would a Density Bonus encourage you to set aside 20% of the units for students?  Would increase incentives improve your ability/desire to provide on childcare facility? If so, what would that look like?

Of the twenty housing developers, three affordable/non-profit housing developers and three market-rate developers responded to staff’s survey and were interviewed. Depending on the type of developer (market-rate, affordable, non-profit), the challenges and suggestions for development of housing vary. A summary of the feedback received from those interviews is included as Attachment VI.

NEXT STEPS

If the Council introduces the attached ordinance this evening, a second reading and adoption will be brought back during a regular meeting scheduled in January 2023. If approved, the proposed text amendments will be effective 30 days after adoption.

Prepared by: Jeremy Lochirco, Planning Manager
Christina Morales, Housing Division Manager
Rozalynne Thompson, Senior Planner

Recommended by: Jennifer Ott, Assistant City Manager/Development Services Director

Approved by:

________________________________________
Kelly McAdoo, City Manager

ATTACHMENT II

HAYWARD CITY COUNCIL

RESOLUTION NO. 22-

Introduced by Council Member __________

RESOLUTION TO ADOPT AMENDMENTS TO CHAPTER 10, ARTICLE 1 7 (AFFORDABLE HOUSING ORDINANCE) AND CHAPTER 10, ARTICLE 1 9 (DENSITY BONUS ORDINANCE) OF THE HAYWARD MUNICIPAL CODE

RELATED TO THE UPDATE OF THE DENSITY BONUS ORDINANCE

WHEREAS, Government Code Section 65915 et seq. (“State Density Bonus Law”) requires every city and county to adopt an ordinance providing density bonuses and other incentives or concessions to applicants wishing to develop eligible projects and specifying how compliance with State Density Bonus Law will be implemented; and

WHEREAS, in November 2005, the City Council adopted the Density Bonus Ordinance (Ordinance No. 05-15), codified as Chapter 10, Article 19 in the Hayward Municipal Code (Density Bonus Ordinance), to comply with State Density Bonus Law; and

WHEREAS, Government Code Section 65915 has been amended multiple times since the City of Hayward (“City”) enacted Chapter 10, Article 19 (Density Bonus Ordinance) and the City Council desires Chapter 10, Article 19 to conform to State law; and

WHEREAS, in 2019, the City was awarded grant funding under Senate Bill (SB) 2 to undertake amendments to Chapter 10, Article 17 (Affordable Housing Ordinance) and Chapter 10, Article 19 (Density Bonus Ordinance) in order to comply with the State’s Density Bonus law; and

WHEREAS, on February 1, 2022, a Joint Work Session with the City Council and Planning Commission was to establish priorities for further analysis; and

WHEREAS, between May 2022 and June 2022, City staff conducted outreach to twenty housing developers, including affordable/non-profit, and market-rate housing developers, which consisted of a survey with seven questions emailed to the developers on May 6, 2022, with interviews scheduled with three affordable/non-profit housing developers and three market-rate developers that responded to staff’s survey from May 9, 2022, to May 18, 2022; and

WHEREAS, on June 26, 2022, the Homelessness Housing Task Force held a work session to review staff recommendations and provided feedback on the proposed Ordinance updates; and

ATTACHMENT II

WHEREAS, on October 18, 2022, the City Council held a public work session to provide feedback and guidance on the recommended updates to the Density Bonus Ordinance; and

WHEREAS, on November 10, 2022, the Planning Commission held a public work session to provide feedback on the recommended updates to the Density Bonus Ordinance; and

WHEREAS, on November 18, 2022, notice of the hearing was published in the manner required by law and the hearing was duly held by the City Council on December 6, 2022.

NOW, THEREFORE, BE IT RESOLVED that the City Council hereby finds and determines as follows:

CALIFORNIA ENVIRONMENTAL QUALITY ACT

1. Pursuant to California Environmental Quality Act (CEQA) Guidelines Section 15168, a Program Environmental Impact Report (EIR) was prepared for the Hayward 2040 General Plan. On July 1, 2014, the City Council adopted Resolution No. 14- 108, approving the Hayward 2040 General Plan update and related Program EIR.

2. In accordance with Section 15164 of the CEQA Guidelines, a lead agency shall prepare an addendum to a previously certified EIR if some changes or additions are necessary but none of the conditions described in Section 15162 calling for preparation of a subsequent EIR have occurred.

3. Based on the draft regulations and the analysis provided in the staff report and attached documents, no new or unanticipated levels of development are anticipated that were not previously identified in the General Plan and General Plan EIR, and no new or unanticipated traffic, employment density, or construction impacts are expected to be generated as a result of adoption of these regulations. Therefore, the proposed Amendments substantially conform to the Goals and Policies set forth in the General Plan, and that were analyzed in the related Program EIR. No further environmental review is necessary.

4. That the project complies with CEQA, and that the City Council has reviewed and considered the information prior to approving the project. The custodian of the record of proceedings upon which this decision is based in the Development Services Department, City of Hayward located at 777 B Street, Hayward, CA 94544.

ATTACHMENT II

FINDINGS FOR TEXT AMENDMENTS TO CHAPTER 10 OF THE HAYWARD MUNICIPAL CODE RELATED TO THE DENSITY BONUS ORDINANCE (REFERRED TO AS THE "TEXT AMENDMENTS")

1. Substantial proof exists that the proposed change will promote the public health, safety, convenience, and general welfare of the residents of Hayward;

The City’s existing Density Bonus Ordinance adopted in 2005 does not conform with current State law. The current State law, which is required to be implemented by local jurisdictions, offers more density, more incentives, and additional relaxed parking requirements to projects that qualify for the density bonus. The City can change the formula to offer a higher density bonus and more incentives for certain projects but under no circumstances can the City offer smaller density bonuses or fewer incentives than the State formula mandates. Section 10-17.700 of Chapter 10, Article 17 (Affordable Housing Ordinance) of the Hayward Municipal Code (HMC) will be amended for consistency with the proposed Density Bonus Ordinance and the current Density Bonus Ordinance, contained in Chapter 10, Article 19 of the HMC, will be repealed and replaced with a new Density Bonus Ordinance that, at minimum, complies with State guidelines and reflects the direction previously provided by Council. Specifically, as part of the update to the City’s Density Bonus Ordinance, a 5 percent density bonus increase will be granted for projects that meet the State’s criteria for on-site affordable housing for the maximum density bonus; a 10 percent total density bonus increase for housing that both meet the State’s criteria for on-site affordable housing for the maximum density bonus and accommodates certain target populations, including those people with disabilities, affordable student housing, and senior housing; and up to five incentives or concessions are granted to eligible projects that would otherwise qualify for only four incentives or concessions under the State Density Bonus Law. The additional incentives or concessions are being recommended to help project feasibility and support construction of a greater number of affordable units.

2. The proposed change is in conformance with all applicable, officially adopted policies and plans;

The proposed Text Amendments contained herein are consistent with the goals and policies of all elements of the Hayward 2040 General Plan and the State Density Bonus Law because the Text Amendments update the language to reflect the applicable polices and actions of the general plan and reflect the changes in State Density Bonus Law. The proposed Amendments are consistent with the following policies and actions of the Hayward 2040 General Plan:

 LU Policy 1-3: Growth and Infill Development. The City shall direct local population and employment growth toward infill development sites within the city, especially the catalyst and opportunity sites identified in the Economic Development Strategic Plan.

ATTACHMENT II

 LU Policy 1-5: Transit Oriented Development. The City shall support high-density transit-oriented development within the city’s Priority Development Areas to improve transit ridership and to reduce automobile use, traffic congestion, and greenhouse gas emissions.
 LU Policy 3-1: Complete Neighborhoods. The City shall promote efforts to make neighborhoods more complete by encouraging the development of a mix of complementary uses and amenities that meet the daily needs of residents. Such uses and amenities may include parks, community centers, religious institutions, daycare centers, libraries, schools, community gardens, and neighborhood commercial and mixed-use developments.
 ED Policy 5-5: Quality Development. The City shall require new development to include quality site, architectural, and landscape design features to improve and protect the appearance and reputation of Hayward.
 Housing Policy 2.2: Provide Incentives for Affordable Housing. The City shall promote the use of density bonuses and other incentives to facilitate the development of new housing for extremely low-, very low-, and low-income households.
 Housing Policy 2.4: Integration of Affordable Housing. The City shall encourage a mix of affordability levels in residential projects and encourage the dispersal of such units to achieve greater integration of affordable housing throughout the community.
 Housing Policy 3.1: Diversity of Housing Types. The City shall implement land use policies that allow for a range of residential densities and housing types, prices, ownership, and size, including low-density single family uses, moderate-density townhomes, and higher-density apartments, condominiums, transit-oriented developments, live-work units, and units in mixed-use developments.  Housing Policy 3.3: Sustainable Housing Development. The City shall improve affordability by promoting sustainable housing practices that incorporate a ‘whole system’ approach to siting, designing, and constructing housing that is integrated into the building site, consumes less water and improves water quality, reduces the use of energy use, and other resources, and minimizes its impact on the surrounding environment.
 Housing Policy 3.4: Residential Uses Close to Services. The City shall encourage development of residential uses close to employment, recreational facilities, schools, neighborhood commercial areas, and transportation routes.  Housing Policy 3.6: Flexible Standards and Regulations. The City shall allow flexibility within the City’s standards and regulations to encourage a variety of housing types.
 Housing Policy 4.1: Flexible Development Standards. The City shall review and adjust as appropriate residential development standards, regulations, ordinances, departmental processing procedures, and residential fees that are determined to be a constraint on the development of housing, particularly housing for lower- and moderate-income households and for persons with special needs.

ATTACHMENT II

 Housing Policy 4.2: Clear Development Standards and Approval Procedures. The City shall strive to maintain and administer clear development standards, and approval procedures for a variety of housing types, including, but not limited to, multifamily housing and emergency shelters.

Further, the proposed text amendments are internally consistent with other applicable provisions of Chapter 10 of the Municipal Code because applicable provisions of the Code will apply to projects eligible for density bonus under the Ordinance.

3. Streets and public facilities existing or proposed are adequate to serve all uses permitted when the property is reclassified; and

As determined in the Addendum to the Program EIR for the Hayward 2040 General Plan, the streets and public facilities that currently serve the City are not expected to be significantly impacted by the residential development projects eligible for a density bonus under the Density Bonus Ordinance. Projects eligible for density bonus are consistent and compatible with the other land uses that are currently permitted or conditionally permitted in the applicable zoning districts. No properties are proposed to be reclassified or rezoned with the proposed Text Amendments. As such, the streets and public facilities, both existing and proposed, would be adequate to serve the potential development of new residential development projects eligible for density bonus in the City.

4. All uses permitted when property is reclassified will be compatible with present and potential future uses, and, further, a beneficial effect will be achieved which is not obtainable under existing regulations.

No properties are proposed to be reclassified with the proposed Text Amendments that regulate density bonus under this Density Bonus Ordinance. A beneficial effect will be achieved with the proposed revision to the HMC, as it will allow for more predictable and transparent regulations, as well as create a more streamlined permitting process for applicants. The proposed Amendments will continue to allow density bonuses for residential development projects, which contribute to the diversity of housing options and add to the City’s existing housing stock. The proposed Amendments will require applicants submit an application and be subject to requirements in the Hayward Municipal Code (HMC) to ensure that any eligible development project will be compatible with present and potential future land uses.

NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Hayward, based on the foregoing findings, hereby adopts the findings in support of the proposed Text Amendments to Chapter 10, Article 17 and Chapter 10, Article 19, subject to the adoption of the companion Ordinance.

BE IT RESOLVED that this resolution shall become effective on the date that the companion Ordinance (Ordinance No. 22-___) becomes effective.

ATTACHMENT II

IN COUNCIL, HAYWARD, CALIFORNIA ____________________, 2022.

ADOPTED BY THE FOLLOWING VOTE:

AYES: COUNCIL MEMBERS:

MAYOR:

NOES: COUNCIL MEMBERS:

ABSTAIN: COUNCIL MEMBERS:

ABSENT: COUNCIL MEMBERS:

ATTEST: ______________________________________
City Clerk of the City of Hayward

APPROVED AS TO FORM:

_________________________________________
City Attorney of the City of Hayward

ATTACHMENT III

ORDINANCE NO. 22-

AN ORDINANCE AMENDING CHAPTER 10, ARTICLE 1 7 (AFFORDABLE HOUSING ORDINANCE) AND ARTICLE 19 (DENSITY BONUS ORDINANCE) OF

THE HAYWARD MUNICIPAL CODE RELATED TO AN UPDATE OF THE

DENSITY BONUS ORDINANCE

NOW THEREFORE THE CITY COUNCIL OF THE CITY OF HAYWARD DOES ORDAIN AS FOLLOWS:

Section 1 . Provisions. The City Council incorporates by reference the finding s contained in Resolution No. 22-___ approving the Zoning Text Amendments to the Hayward Municipal Code.

Section 2. Chapter 10, Article 1 7 (Affordable Housing Ordinance) of the Hayward Municipal Code is hereby amended to read as follows:

SEC. 10-17.700. DEVELOPMENT INCENTIVES

This Article confers economic and land use benefits on Residential Development Projects that provide on-site Affordable Units, as set forth below. a. Density Bonus. The Applicant may apply for a density bonus and other regulatory incentives provided by state law pursuant to Chapter 10, Article 19 of the Hayward Municipal Code. In calculating the number of Affordable Units required by this Article, any additional Dwelling Units authorized as a density bonus pursuant to Government Code Section 65915 et seq (“State Density Bonus Law”) shall not be counted as part of toward the base density calculation for the Residential Development Project.
b. Modified Development Standards to Increase Density.
(1) In a residential project which contains single family detached homes, Affordable Units may be attached Dwelling Units rather than detached homes. In a residential project that includes attached multi-story Dwelling Units, Affordable Units may contain only one story;
(2) When a Residential Development Project is within one-half mile of a rail station or the intersection of two or more major bus routes with a frequency of service interval of 15 minutes or less during the morning and afternoon peak commute periods, the Applicant may request that the Decision-Making Body reduce the number of parking spaces required for the development based on the assumption that some households will take public transportation to their jobs. This will allow for increased density within the development.

ATTACHMENT III

c. Expedited Processing. Expedited processing of development approvals and permits will be available for Residential Development Projects with on-site Affordable Units, consistent with State law.
d. Technical and Financial Assistance. Upon request, information shall be provided to Applicants regarding objective design guidelines and financial subsidy programs for Residential Development Projects that provide on-site affordable units.

Section 3. Chapter 10, Article 1 9 (Density Bonus Ordinance) of the Hayward Municipal Code is hereby repealed and replaced to read as follows:

SEC. 10-19.100. TITLE.

This Article shall be known and may be cited as the Density Bonus Ordinance of the City of Hayward.

SEC. 10-19.105. PURPOSE.

(a) This article provides requirements and incentives for the development of affordable housing units in conjunction with other residential and mixed -use projects and commercial projects in partnership with affordable housing providers as provided under State law. These provisions are intended to implement General Plan policies encouraging the production of affordable housing for all economic groups, and housing for disabled and older residents, transitional foster youth, and disabled veterans, and homeless persons as defined in Government Code Section 65915, all of which is integrated, compatible with and complements adjacent uses, and is located near public and commercial services. (b) This article is enacted pursuant to the City’s authority contained in Article II of the City Charter, and Government Code Section 65915(n), which authorizes a city to enact an ordinance that provides for a greater density bonus than what is granted under state law. (c) The incentives and concessions offered in this article are used by the City as one means of meeting its commitment to encourage housing affordable to all economic groups, and to meet its regional fair share requirements for the construction of housing affordable to very low, low, and moderate income persons. (d) All references in this Ordinance to the State Density Bonus Law refer to Government Code section 65915, et seq., as it may be amended from time to time.

SEC. 10-19.110. DEFINITIONS.

Certain words and phrases are defined within this Article. Where it appears from the context of such words, phrases, or provisions that a differe nt meaning is intended, the definition shall be as determined by the Director of Development Services or their designee.

(a) "Affordable Ownership Cost" is defined as the maximum purchase price that will be affordable to a:

ATTACHMENT III

1. Moderate-Income Household at Presu med Occupancy Levels, based on a reasonable down payment and
monthly housing payments (including mortgage principal and interest, property taxes, homeowner’s insurance, and
homeowner/condominium association fees where applicable) that do not exceed one hun dred ten percent of Area Median Income multiplied by thirty-five percent and divided by twelve.

2. Low-Income Household at Presumed Occupancy Levels, based on a reasonable down payment and monthly housing payments (including mortgage principal and interest, property taxes, homeowner’s insurance, and homeowner/condominium
association fees where applicable) that do not exceed seventy percent of Area Median Income multiplied by thirty percent and divided by twelve.

3. Very Low -Income Household at Presumed Occupancy Levels, based on a reasonable down payment and
monthly housing payments (including mortgage princip al and interest, property taxes, homeowner’s insurance, and
homeowner/condominium association fees where applicable) that do not exceed fifty percent of Area Median Income
multiplied by thirty percent and divided by twelve.
(b) "Affordable Rent" is defined as the maximum monthly rent, including all fees for housing services and a utility allowance as determined by the Alameda County Housing Authority, that does not exceed the following, based on Presumed Occupancy Levels:

1. For Extremely Low Income House holds: thirty percent of Area Median Income multiplied by thirty percent and divided by twelve.

2. For Very Low Income Households: fifty percent of Area Median Income multiplied by thirty percent and divided by twelve.

3. For Low Income Households: sixty percent of Area Median Income multiplied by thirty percent and divided by twelve. (c) “Affordable Unit” is defined as an ownership or rental Dwelling Unit whose price is set at an Affordable Ownership Cost or Affordable Rent as defined in this Article.
(d) “Applicant” is defined as any person, firm, partnership, association, joint venture, corporation, or any entity or combination of entities who seek residential property development permits or approvals from the City of Hayward.
(e) “Area Median Income (AMI)” is defined as the median income for the Alameda County, adjusted for household size, as published annually in Title 25 of the California Code of Regulations, Section 6932 (or its successor provision) by the California Department of Housing and Community Development (HCD). (f) “Child Care Facility” is defined as a facility installed, operated, and maintained for the nonresidential care of children as defined under applicable state licensing requirements for the facility.

ATTACHMENT III

(g) “Child Care Facility Den sity Bonus” means a floor area ratio bonus over the otherwise maximum allowable floor area permitted under the applicable zoning ordinance and land use elements of the general plan of the City of Hayward of the following amounts: A maximum of five (5) square feet of floor area for each one square-foot of floor area contained in the Child Care Facility for existing structures; or a maximum of ten (10) square feet of floor area for each one square-foot of floor area contained in the Child Care Facility for new structures.
(h) “Commercial development bonus” means a modification of development standards mutually agreed upon by the City and a commercial developer and provided to a commercial development eligible for such a bonus under Subsection 10-19.170. Examples of a commercial development bonus include an increase in floor area ratio or increased building height. (i) “Condominium Conversion Density Bonus” means an increase in units of twenty-five percent (25%) over the number of apartments, to be provided within the existing structure or structures proposed for conversion. (j) “Density Bonus” is defined as a density increase over the otherwise maximum allowable gross residential density as of the date of application by the applicant to the City as per State Density Bonus Law (SDBL) Government Code Section 65915 et seq.
(k) “Development Standard” is defined as site or construction conditions that apply to a Residential Development Project pursuant to any ordinance, general plan element, specific plan, charter amendment, or other local condition, law, policy, resolution, or regulation as per Government Code section 65915(o)(1) of State Density Bonus Law.
(l) “Dwelling Unit” is defined as a dwelling designed and intended for residential occupancy by one household.
(m) "Extremely Low, Very Low, Low, and Moderate -Income Households" are defined as households whose incomes do not exceed the extremely low, very low, low, or moderate -income limits, as applicable, established for Alameda County and adjusted for household size that are published annually in Title 25 of the California Code of Regulations, Section 6932 (or its successor provision) by HCD.
(n) “Floor Area” is defined with respect to a commercial or industrial project, as the floor area as calculated under the applicable zoning ordinance of the City of Hayward and, with respect to a Child Care Facility, as the total area contained within the exterior walls of the facility and all outdoor areas devoted to the use of the facility in accordance with applicable state childcare licensing requirements.
(o) “Household Income” is defined as the gross annual household income, monetary benefits, and all other sources of household income, before deductions or exemptions, and includes the income of all members of the household 18 years of age or older.
(p) “Major Transit Stop” as per California Public Resource 21064.3, which may be amended from time-to-time is defined as:
(1) An existing rail or bus rapid transit station.

ATTACHMENT III

(2) A ferry terminal served by either a bus or rail transit service. (3) The intersection of two or more major bus routes with a frequency of service interval of 15 minutes or less during the morning an afternoon peak commute periods.
(q) “Marketing Plan” is defined as a plan that describes how the App licant will inform the public, and those within the appropriate income groups, of the availability of Affordable Housing Units.
(r) “Maximum Allowable Residential Density” is defined as the density allowed under the zoning ordinance, or if a range of dens ity is permitted, means the maximum allowable density for the specific general plan designation and zoning range applicable to the project.
(s) “Mixed-Income Residential Project” is defined as a project that contains the amount of both on -site affordable (extremely low, very low, low -and moderate-income households) and market rate residential rental or for sale units required by the Affordable Housing Ordinance contained in Hayward Municipal Code Chapter 10, Article 17.
(t) “Mixed-Use Development Project” is defined as a Residential Development Project that may include a mix of commercial, office, industrial, or residential uses.
(u) “Mobile Home Park” is defined as a mobile home park that limits residency based on age requirements for housing for older pe rsons pursuant to Section 798.76 or 799.5 of the Civil Code.
(v) “Partnered housing agreement” means an agreement approved by the City between a commercial developer and a housing developer identifying how the commercial development will provide housing available at affordable ownership cost or affordable rent consistent with Section 10 -19.170. A partnered housing agreement may consist of the formation of a partnership, limited liability company, corporation, or other entity recognized by the state in whi ch the commercial developer and the housing developer are each partner, members, shareholders, or other participants, or a contract between the commercial developer and the housing developer for the development of both the commercial development and the residential development project. (w) “Presumed Occupancy Levels” as listed below shall be used to establish Affordable Ownership Cost and Affordable Rents, unless the Residential Development Project is financed with federal tax credits, in which case the applicable federal regulations shall determine the Presumed Occupancy Levels:
(1) One person for a studio unit;
(2) Two people for a one-bedroom unit;
(3) Three people for a two-bedroom unit; and
(4) One additional person for each additional bedroom thereafter. (x) “Resale Controls and/or Rent Restrictions” are defined as the restrictions, set forth by the City of Hayward or by state and/or federal law, by which the rents paid on rental Affordable Housing Units and the sales price for ownership Affordable Housing Units are limited to ensure that the unit remains affordable to Very Low or Low Income households for a term of no less than

ATTACHMENT III

fifty-five (55) years. With respect to rental units, such rent restrictions shall generally be in the form of a regulato ry agreement recorded against the applicable property. With respect to owner occupied units, such resale controls shall generally be in the form of resale restrictions, deeds of trust and/or other similar documents recorded against the applicable property.

Affordability restrictions and terms shall be consistent with State Density Bonus law.
(y) “Residential Development Project" is defined as any development for which a discretionary or ministerial permit is required that includes the creation of five (2) or more net new Dwelling Units or residential lots, or Dwelling Units and residential lots in combination. All development within a two-year period of two (2) or more Dwelling Units on a lot, or on contiguous lots for which there is evidence of common owne rship or control, even though not covered by the same City discretionary or ministerial permit, shall be considered to be one Residential Development Project. The provisions of this section shall be interpreted broadly to affect the purposes of this Chapte r and to prevent evasion of its terms. Residential development project includes a shared housing building development as defined in Government Code section 65915, et seq, as it may be amended from time to time.
(z) “Senior Citizen Household” is defined as a household headed by a person sixty- two (62) years of age or older.
(aa) “Senior Citizen Housing Development” is defined as a development of at least thirty-five (35) dwelling units reserved for Senior Citizen Households and as further described in Sections 51.3 and 51.12 of the Civil Code. (bb) “Universal Design” is defined as housing with barrier free design that focuses on making the house safe and accessible for everyone, regardless of age, physical ability, or stature. Universal design features shal l include, but not be limited to, features such as:
 Installation of varied-height cabinets and countertops  Flexible appliances
 Open space under the sink, cooktop, and preparation counter  Doorways and hallways that are 32 inches wide.
 Provide at least one (1) full bathroom (accessible bathroom) and one bedroom on the same level as the kitchen and the primary entry into the unit.
 The accessible bathroom(s) shall include the appropriate structural modifications so that grab bars can be easily installed in the future.  The accessible bathroom(s) shall be designed to accommodate a wheelchair turning radius, as determined by applicable Americans with Disabilities Act (ADA) standards.
 The accessible bathroom shall include an accessible shower/bathtub.  Install slip-resistant flooring on the accessible level(s) of the unit  Provide sliding or barn doors for closets and/or bathrooms of accessible bedrooms and bathrooms that can remain open.

ATTACHMENT III

SEC. 10-19.120. APPLICATION.

The provisions of this Article apply to Residential Development Projects consisting of either five (5) or more general Dwelling Units . Projects with special targeting , including foster youth, disabled veterans, projects for unhoused people, college student s, affordable Senior Citizen Housing Developments, rental projects that provide more than 20 percent of the rental units for large families (3+ bedrooms), projects incorporating Univers al Design principles, in conformance with Government Code Section 65915, et seq., or as it may be modified from time to time, are eligible for additional Density Bonus. For those projects that are subject to the provisions of Hayward Municipal Code Chapter 10, Article 17, Affordable Housing Ordinance, Affordable Housing Units provided under the Affordable Housing Ordinance may be counted toward the requirements of this Article. To the extent that the provisions of this Article and the Affordable Housing Ordinance are in conflict, the provisions of the Affordable Housing Ordinance prevail.

SEC. 10-19.125. DENSITY BONUS CALCULATION.

All calculations are rounded up for any fractional numeric value in determining the total number of units to be granted, including base density and bonus density as well as the resulting number of affordable units needed for a given density bonus project.

(a) If a residential development qualifies for a density bonus under more than one income category, or additionally, as a Senior Citizen Housing Development as defined herein, or as housing intended to serve transitional foster youth, disabled veterans, homeless persons, or lower income students, the applicant shall identify the categories under which the density bonus would be associated and granted.

Density bonuses from more than one category can be combined up to the maximum allowed under Government Code Section 65915, as it may be modified from time to time, or the maximum amount allowed by the City’s Density Bonus Law.
(b) The density bonus units shall not be included in determining the number of affordable units required to qualify a residential development for a density bonus pursuant to Government Code Section 65915, as it may be modified from time to time, or the maximum amount allowed by the City’s Density Bonus Ordinance. (c) The applicant may elect to accept a lesser percentage of density bonus than t he residential development project is entitled to, or no density bonus, but no reduction will be permitted in the percentages of required affordable units contained in Government Code Section 65915, subdivisions (b), (c), and (f).

Regardless of the number of affordable units, no residential development project shall be entitled to a density bonus of more than what is authorized under State law or as allowed by the City’s Density Bonus Ordinance.

SEC. 10 -19.130. STATE TARGETED AND CITY SPECIAL -TARGETED HOUSING UNITS.

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The City shall grant a density bonus and incentives, or concessions described in Section 10 -19.190, when an Applicant for a Residential Development Project seeks and agrees to construct a residential development that qualifies under State D ensity Bonus Law as shown in the table below. For Residential Development Projects that meet the criteria, the density bonus shall be calculated based on the density bonuses allowed under Government Code Section 65915, as it may be modified from time to time.

An additional density bonus increase shall apply to Mixed Income Residential Projects with special targeting that includes:
 Rental projects that provide more than 20% of the rental units for large families (3+ bedrooms)
 Projects that incorporate Universal Design features in more than 20% of the units  Senior housing projects as defined by Government Code Section 65915, as it may be modified from time to time
 College student housing projects as defined by Government Code Section 65915, as it may be modified from time to time
 Projects with units set -aside for foster youth, disabled veterans, or individuals experiencing homelessness as defined by Government Code Section 65915, as it may be modified from time to time.

SEC. 10-19.140. LAND DONATION.

If a density bonus is requested for a land donation as per Government Code Section 65915, the applicant shall provide the following:

 The location of the land to be dedicated
 A title report showing proof of site control

Target Population Served State Required
Restricted
Affordable Units
Hayward
Maximum
Density
Hayward Maximum
Density Increase for
Special Targeting
Very Low Income 15% 55% 60%
Low Income 23% 55% 60%
Moderate Income 44% 55% 60%
Foster Youth/Disabled
Veterans/Unhoused Individuals
10% restricted at
very low Income
25% 30% (15% restricted at
very low income)
College Students 20% Low-Income
Student
40% 45% (25% restricted low-
income students)

ATTACHMENT III

SEC. 10-19.150. CHILD CARE FACILITIES.

When an Applicant proposes to construct a Residential Development Project that conforms to the requirements of Section 10 -19.130 and includes a Child Care Facility that will be located on the premises of, as part of, or adjacent to, the Residential Develop ment Project, the City shall grant an additional density bonus pursuant to Government Code Section 65915, as it may be modified from time to time.

SEC. 10-19.160. CONDOMINIUM CONVERSIONS.

When an Applicant’s Residential Development Project is the conversion of an existing apartment complex to a condominium complex, the Applicant shall provide documentation showing that all of the requirements included in City of Hayward Municipal Code Chapter 10, Article 3, Subdivision Ordinance, and Government Code Section 65915, as it may be modified from time to time, regarding condominium conversions can be met.

SEC. 10-19.170. COMMERCIAL DEVELOPMENT BONUS.

In accordance with Government Code Section 65915, as it may be modified from time to time, when an Applicant proposes to construct a commercial development and has entered into a partnered housing agreement approved by the City, the City shall grant a commercial development bonus mutually agreed upon by the developer and the City. The commercial development bonus shall not include a r eduction or waiver of fees imposed on the commercial development to provide for affordable housing. The requirements for commercial development bonus are as follows, which shall also be described in the partnered housing agreement:

(a) The residential development project shall be located either:
(1) On the site of the commercial development; or
(2) On a site within the City that is within one -half mile of a major transit stop as defined in Government Code Section 65915, as it may be modified from time to time, and is located within one mile of public amenities, including schools and employment centers.
(b) At least 30 percent of the total units in the residential development project shall be made available at affordable ownership cost or affordable rent for low -income households, or at least 15 percent of the total units in the residential development project shall be made available at affordable ownership cost or affordable rent for very low-income households.
(c) The commercial developer must agree either to directly build the affordable units; donate a commercial development site consistent with Section 10-19.110 (h), for the affordable units; or make a cash payment to the housing developer for the affordable units.

ATTACHMENT III

(d) Any approved partnered housing agreement shall be described in the City’s Housing Element annual report as required by Government Code Section 6 5915, as it may be modified from time to time.

SEC. 10-19.180. DESIGN, DISTRIBUTION AND TIMING OF AFFORDABLE HOUSING UNITS.

Affordable Housing Units must be constructed concurrently with market -rate units.

The Affordable Housing Units shall be integrated into the Residential Development Project and be comparable in infrastructure (including sewer, water, and other utilities), construction quality, and exterior design to the market -rate units. The Affordable Housing Units must also comply with Se ction. 10 -17.230 of this Code regarding the design, distribution, and timing of affordable units.

SEC. 10-19.190. REQUESTS FOR INCENTIVES OR CONCESSIONS.

As per Government Code Section 65915, as it may be modified from time to time, the Applicant shall submit a Density Bonus Application, as described in Section 10-19.220 below, for the specific incentives or concessions that the Applicant requests. The City shall grant the concession or incentive requested by the Applicant unless the City makes a written finding, based upon substantial evidence, of either of the following:
(a) The concession or incentive does not result in identifiable and actual cost reductions to provide for affordable housing costs, or for rents for the affordable housing units; or
(b) The concession or incentive would have a specific adverse impact upon public health and safety, or on any real property that is listed in the Federal Register of Historic Resources, the California Register of Historical Resources, or the City’s List of Officially Designated Architecturally and Historically Significant Buildings and for which there is no feasible method to satisfactorily mitigate or avoid th e specific adverse impact without rendering the development unaffordable to Low and Moderate Income households; or
(c) The concession or incentive would be in compliance with state or federal law.

SEC. 10-19.200. GRANTING OF INCENTIVES OR CONCESSIONS.

As defined in Government Code Section 65915, as it may be modified from time to time, projects that include certain percentages of affordable units qualify for various incentives or concessions from development standards. The number of incent ives or concessions that may be requested and granted shall be based upon the number the Applicant is entitled to pursuant to State Density Bonus Law and one extra incentive/concession allowed by this Article. If the conditions of 10 -19.130 are met by the Applicant, the following incentives/concessions shall be granted as shown following table:

No. of Incentives/
Concessions
Percentage of Very-Low
Income Units
Percentage of Low-
Income Units
Percentage of Moderate-
Income Units
1 5% 10% 10%

3 10% 17% 20%*
4 15% 24% 30%*
5 100% (LI/VLI) or 100% (MI 20% /LI 80%)
*Applies to common interest development, as defined in Section 4100 of the Civil Code (a) In accordance with Government Code Section 65915, as it may be modified from time to time, four (4) incentives or concessions are allowed for a project within one-half mile of a major transit stop.
(b) Nothing in this section requires the provision of direct financial incentives for the residential development project, including, but not limited to, the provision of financial subsidies, publicly owned land, fee waivers, or waiver of dedication requirements. The City, at its sole discretion, may choose to provide such direct financial incentives.

SEC. 10-19.210. COMPLIANCE.

The provisions of this Article shall apply to all agents, successors, and assignees of an Applicant, developer, builder, or property owner proposing a Residential Development Project governed by this Article. No tentative map, use permit, special developme nt permit, or occupancy permit shall be issued for any Residential Development Project unless exempt from or in compliance with the terms of this Article.

The City may institute any appropriate legal actions or proceedings necessary to ensure compliance herewith, including but not limited to actions to revoke, deny, or suspend any permit or development approval.

SEC. 10-19.220. DENSITY BONUS APPLICATION.

An application for a density bonus request, including incentives or concessions and waivers, shall be reviewed and approved by the highest approving body and if denied, the City shall bear burden of proof in accordance with Government Code Section 65915, as it may be modified from time to time. In accordance with Hayward Municipal Code Section 10-

1.2854, Appeal and Review Process. if Any Applicant requesting a density bonus and any incentive(s), waiver(s), concession(s), or commercial development bonus provided by State Density Bonus Law shall submit a density bonus report as described below concu rrently with the filing of the planning application for the first discretionary permit required for the residential development project, commercial development, or mixed -use development. The requests contained in the density bonus report shall be processed concurrently with the planning entitlement application. The applicant shall be informed whether the application is complete consistent with Government Code Section 65943, as it may be modified from time to time.

The density bonus report shall include the following minimum information:

(a) Requested density bonus.

ATTACHMENT III

(1) Summary table showing the maximum number of dwelling units permitted by the zoning and general plan excluding any density bonus units, proposed affordable units by income level, proposed b onus percentage, number of density bonus units proposed, total number of dwelling units proposed on the site, and resulting density in units per acre.
(2) A tentative map and/or preliminary site plan, drawn to scale, showing the number and location of all proposed units, designating the location of proposed affordable units and density bonus units.
(3) The zoning and general plan designations and assessor’s parcel number(s) of the residential development project site.
(4) A description of all dwelling uni ts existing on the site in the five -year period preceding the date of submittal of the application and identification of any units rented in the five-year period. If dwelling units on the site are currently rented, income and household size of all residents of currently occupied units shall be included in the description, if known. If any dwelling units on the site were rented in the five -year period but are not currently rented, the income and household size of residents occupying dwelling units when the s ite contained the maximum number of dwelling units, if known. (5) Description of any recorded covenant, ordinance, or law applicable to the site that restricted rents to levels affordable to very -low or lower income households in the five -year period prec eding the date of submittal of the application.
(6) If a density bonus is requested for a land donation, the location of the land to be dedicated, proof of site control, and reasonable documentation that each of the requirements included in Government Code Section 65915, subdivision (g) can be met.
(b) Requested Concession(s) or Incentive(s). In the event an application proposes concessions or incentives for a residential development project pursuant to State Density Bonus Law, the density bonus report shall include the following minimum information for each incentive requested, shown on a site plan if appropriate:
(1) The City’s required development standard and the Applicant’s requested development standard concession or regulatory incentive. (2) Except where mixed -use zoning is proposed as a concession or incentive, reasonable documentation to show that any requested incentive will result in identifiable and actual cost reductions to provide for affordable housing costs or rents.
(3) If approval of m ixed-use zoning is proposed, documentation that nonresidential land uses will reduce the cost of the residential development project, that the nonresidential land uses are compatible with the residential development project and the existing or planned development in the area where the proposed residential development project will be located, and that mixed -use zoning will provide for affordable housing costs or rents.

ATTACHMENT III

(c) Requested Waiver(s). In the event an application proposes waivers of development stan dards for a residential development project pursuant to State Density Bonus Law, the density bonus report shall include the following minimum information for each waiver requested on each lot, shown on a site plan if appropriate:
(1) The City’s usual development standard and the requested development standard waiver.
(2) Reasonable documentation that the development standards for which a waiver is requested will have the effect of physically precluding the construction of a development at the densities or with the concessions or incentives permitted by State Density Bonus Law, as may be amended from time to time.
(d) Requested Parking Reduction. Except for projects subject to Government Code section 65863.2, in the event an application proposes a parking re duction for a residential development project pursuant to Government Code Section 65915 (p), as it may be modified from time to time, a table showing parking required by the zoning regulations, parking proposed under Government Code Section 65915 (p), as m ay be modified from time to time and reasonable documentation that the project is eligible for the requested parking reduction.

Applications for parking reduction requests that are less than those allowed under Government Code Section 65915(p), as may be m odified from time to time shall include a transportation demand management (TDM) plan to reduce parking demand.
(e) Child Care Facility. If a density bonus or incentive is requested for a child care facility in a residential development project, reasonabl e documentation that all of the requirements included in Government Code Section 65915 (h), as it may be amended from time to time, can be met.
(f) Condominium Conversion. If a density bonus or incentive is requested for a condominium conversion, reasonabl e documentation that all the requirements included in Government Code Section 65915.5 can be met. (g) Commercial Development Bonus. If a commercial development bonus is requested for a commercial development, the application shall include the proposed part nered housing agreement and the proposed commercial development bonus, as defined in Section 10 -19.170, and reasonable documentation that each of the standards included in Section 10 -19.170 has been met.
(h) Fee. Payment of any fee in an amount set by reso lution of the City Council for staff time necessary to determine compliance of the Density Bonus Report with State Density Bonus Law.

SEC. 10-19.230. AFFORDABLE HOUSING PLAN.

Unless the Applicant proposes to pay affordable housing in -lieu fees consistent with Section 10-17.400—10-17.415, an Applicant shall submit an Affordable Housing Plan (AHP) as part of the earliest application for a Residential Development Project. In accordance with the Permit Streamlining Act, the Development Services Director or designee shall determine

ATTACHMENT III

whether the AHP is complete. The elements of a complete AHP are described below. If the AHP is incomplete, the AHP will be returned to the Applicant with a list of the deficiencies or the information required. No application for a d iscretionary or ministerial permit to which this Article applies shall be deemed complete until the AHP is deemed complete by the Development Services Director or designee. At any time during the review process, the Development Services Director or designe e may require from the Applicant additional information reasonably necessary to clarify and supplement the application or to determine the consistency of the proposed AHP with the requirements of this Article and Article 17 – Affordable Housing Ordinance. The AHP will satisfy the application requirement for this Article and Article 17.

The AHP should include, but not be limited to, the following:

(a) The location, structure (attached, semi -attached, or detached), proposed tenure (for- sale or rental), and size of the proposed market-rate, commercial space and/or Affordable Housing Units;
(b) A floor or site plan depicting the location of the Affordabl e Housing Units and a floor plan describing the size, in square footage, of the Affordable Housing Units;
(c) The income levels to which each Affordable Housing Unit will be made affordable;
(d) For phased Residential Development Projects, a phasing plan that provides for the timely development of the number of Affordable Housing Units proportionate to each proposed phase of development as required by this Article;
(e) If off-site units, rental units, or other alternatives are proposed under Sections 10-17.205, 10-17.225, or 10-17.230, the information necessary to support the findings required for approval of such alternatives;
(f) A written statement demonstrating compliance with the requirements of Section 10-17.220 for on-site Affordable Units;
(g) A preliminary marketing plan that describes how the Applicant intends to inform the public, and those within the appropriate income groups, of the availability of Affordable Housing Units; and
(h) Any other information reasonably requested by the Developm ent Services Director or designee to assist with evaluation of the AHP under the standards of this Article and Article 17 – Affordable Housing Ordinance.

SEC. 10-19.240. AFFORDABLE HOUSING AGREEMENT.

Affordable Housing Agreement (AHA). Except where a density bonus, incentive, waiver, parking reduction, or commercial development bonus is provided for a market-rate Senior Citizen Housing Development, the Applicant shall enter into an AHA with the City, i n a form approved by the City Attorney, to be executed by the City Manager, to ensure that the requirements of this section are satisfied. The AHA shall guarantee the affordability of the affordable units for a minimum of 55 years or a longer if required b y the construction or mortgage financing assistance program, mortgage insurance program, or rental subsidy

ATTACHMENT III

program; shall identify the type, size, and location of each affordable unit; and shall specify phasing of the affordable units in relation to the market-rate units as per State Density Bonus Law.

(a) Senior Housing Agreement. Where a density bonus, waiver, or parking reduction is provided for a market -rate Senior Citizen Housing Development, the Applicant shall enter into a restrictive covenant with the City, running with the land, in a form approved by the City Attorney, to be executed by the City Manager, to require that the residential development project be operated as “housing for older persons” consistent with state and federal fair housing laws. (b) The executed AHA or senior housing agreement shall be recorded against the land prior to final or parcel map approval, or, where a map is not being processed, prior to issuance of building permits for the residential development project. The AHA or senior housing agreement shall be binding on all future owners and successors in interest.
(c) The AHA shall include, but not be limited to, the following:
(1) The number of density bonus dwelling units granted; (2) The number and type of affordable dwelling units
(3) The unit size(s) (square footage) of target dwelling units and the number of bedrooms per target dwelling unit;
(4) The proposed location of the affordable dwelling units; (5) Schedule for production of affordable dwelling units; (6) Incentives or concessions or waivers provided by the City; (7) Where applicable, tenure and conditions governing the initial sale of the affordable units;
(8) Where applicable, tenure and conditions establishing rules and procedures for qualifying tenants, setting rental rates, filling vacancies, and operating and maintaining units for affordable rental dwelling units;
(9) Compliance with federal and state laws;
(10) Prohibition against discrimination;
(11) Indemnification;
(12) City’s right to inspect units and documents;
(13) Remedies;
(14) The duration of the AHA.

ATTACHMENT III

SEC. 10-19.250. AFFORDABLE HOUSING AGREEMENTS FOR OWNERSHIP UNITS.

In the case of Residential Development Projects consisting of ownership units, the AHA must provide the following additional conditions governing the sale and use of Affordable Housing Units during the applicable use restriction period:

(a) Affordable Housing Units shall be sold to Very Low Income households, Lower Income households or Moderate Income households in a common interest development, at an affordable sales price and housing cost as defined by this Article.
(b) Affordable Housing Units shall be owner-occupied by Very Low, Lower Income households or by Moderate Income households within common interest developments.
(c) The purchaser of each Affordable Housing Unit shall execute an instrument or agreement approved by the City restricting the sale of the Affordable Housing Unit in accordance with this Article and Article 17 of Chapter 10 of this Code during the applicable use restriction period. Such instrument or agreement shall be recorded against the parcel containing the Affordable Housing uni t and shall contain such provisions as the City may require ensuring continued compliance with this Article , Article 17 of Chapter 10 of this Code, and Government Code Section 65915, as it may be amended from time to time. (d) Any additional obligations relevant to the compliance with this Article.

SEC. 10-19.260. AFFORDABLE HOUSING AGREEMENTS FOR RENTAL UNITS.

In the case of Residential Development Projects consisting of rental units, the AHA must provide the following addi tional conditions governing the use of Affordable Housing units during the use restriction period:

(a) Specific property management procedures for qualifying and documenting tenant income eligibility, establishing affordable rent and maintaining Affordable Housing units for qualified tenants;
(b) Provisions requiring property owners to verify household incomes and maintain books and records to demonstrate compliance with this Article. (c) Provisions requiring the Property Owner to submit an annual repor t to the City, which includes the name(s), address, and income of each household occupying target units, and which identifies the bedroom size and monthly rent or cost of each Affordable Housing unit.
(d) Provisions describing the amount of, and timing fo r payment of, Administrative Fees to be paid to the City for the on -going compliance monitoring of the provisions of this Article.
(e) Any additional obligations relevant to the compliance with this Article.

SEC. 10-19.270. ADMINISTRATIVE FEE.

ATTACHMENT III

An administrative fee shall be charged to the Applicant for City review of all materials submitted in accordance with this Article for implementation and on -going enforcement of the provisions of this Article. The fee amount shall be established by City Council resolution and will be described in the City of Hayward Master Fee schedule.

SEC. 10-19.280. VIOLATION OF AFFORDABLE HOUSING COST REQUIREMENTS.

In the event it is determined that rents in excess of those allowed by operation of this Article have been charged to a tenant residing in a rental Affordable Housing Unit, the City may take the appropriate legal action to recover, and the rental unit owner shall be obligated to pay to the tenant (or to the City in the event the tenant cannot be located), any excess rent charges.

In the event it is determined that a sales price in excess of that allowed by operation of this Article has been charged to an income -eligible household purchasing an ownership Affordable Residential Unit, the City may take the a ppropriate legal action to recover, and the Affordable Residential Unit seller shall be obligated to pay to the purchaser (or to the City in the event the purchaser cannot be located), any excess sales costs.

Section 4. California Environmental Quality Act. The City Council independently finds and determines that the Addendum to the Program EIR for the Hayward 2040 General Plan concludes that no new or unanticipated levels of development are anticipated that were not previously identified in the General Plan and General Plan EIR, and no new or unanticipated traffic, employment density, or construction impacts are expected to be generated as a result of adoption of the updated regulations. Therefore, the proposed Amendments substantially conform to the Goals and Policies set forth in the General Plan, and that were analyzed in the related Program EIR. No further environmental review is necessary in accordance with Section 15164 of the CEQA Guidelines because none of the conditions described in Section 15162 of the CEQA Guidelines calling for preparation of a subsequent EIR have occurred.

Section 5. Severance. Should any part of this Ordinance be declared by a final decision by a court or tribunal of competent jurisdiction to be unconstitutional, invalid, or beyond the authority of the City, such decision shall not affect the validity of the remainder of this Ordinance, which shall continue in full force and effect, provided that the remainder of the Ordinance, absent the unexcised portion, can be reasonably interpreted to give effect to the intentions of the City Council.

Section 6. Effective Date. In accordance with the provisions of Section 620 of the City Charter, the Ordinance shall become effective 30 days following adoption.

ATTACHMENT III

INTRODUCED at a regular meeting of the City Council of the City of Hayward, held the 6th day of December 2022, by Council Member __________________________.

ADOPTED at a regular meeting of the City Council of the City of Hayward, held the ___th day of _________ 2023, by the following votes of members of said City Council.

AYES: COUNCIL MEMBERS:

MAYOR:

NOES: COUNCIL MEMBERS:

ABSTAIN: COUNCIL MEMBERS:

ABSENT: COUNCIL MEMBERS:

APPROVED: _______________________________________
Mayor of the City of Hayward

DATE: _____________________________________________

ATTEST: _____________________________________
City Clerk of the City of Hayward

APPROVED AS TO FORM:

_________________________________________
City Attorney of the City of Hayward

ATTACHMENT IV

Density Bonus Ordinance Update
Addendum to the City of Hayward General
Plan 2040 Environmental Impact Report
SCH # 2013082015
prepared by
City of Hayward
Development Services Department, Planning Division
777 B Street
Hayward, California 94541
Contact: Jeremy W. Lochirco, Planning Manager
prepared with the assistance of
Rincon Consultants, Inc.
449 15th Street, Suite 303
Oakland, California 94612
November 2022

Introduction

Addendum to the City of Hayward General Plan 2040 Environmental Impact Report i Table of Contents
1 Introduction .................................................................................................................................... 1 2 Background ..................................................................................................................................... 2

2.1 Hayward 2040 General Plan ............................................................................................... 2

2.2 Hayward 2040 General Plan EIR ......................................................................................... 2 3 Project Description – Proposed Density Bonus Ordinance Update ................................................ 4

3.1 Project Location and Zoning Districts ................................................................................. 4

3.2 Description of the Density Bonus Ordinance Update ......................................................... 5

3.3 Relationship of the Proposed Project to Previous EIR Analysis .......................................... 7 4 Decision Not to Prepare a Subsequent Environmental Impact Report .......................................... 8 5 Environmental Impacts ................................................................................................................... 9

5.1 Aesthetics ............................................................................................................................ 9

5.2 Agriculture and Forestry Resources ..................................................................................10

5.3 Air Quality .........................................................................................................................11

5.4 Biological Resources ..........................................................................................................12

5.5 Cultural Resources ............................................................................................................12

5.6 Energy ...............................................................................................................................13

5.7 Geology and Soils ..............................................................................................................14

5.8 Greenhouse Gas Emissions ...............................................................................................15

5.9 Hazards and Hazardous Materials ....................................................................................15

5.10 Hydrology and Water Quality ...........................................................................................16

5.11 Land Use and Planning ......................................................................................................17

5.12 Mineral Resources ............................................................................................................17

5.13 Noise .................................................................................................................................18

5.14 Population and Housing ....................................................................................................19

5.15 Public Services ...................................................................................................................19

5.16 Recreation .........................................................................................................................20

5.17 Transportation ..................................................................................................................21

5.18 Tribal Cultural Resources ..................................................................................................22

5.19 Utilities and Service Systems ............................................................................................22

5.20 Wildfire..............................................................................................................................23 6 Conclusion.....................................................................................................................................25 7 References ....................................................................................................................................26

7.1 Bibliography ......................................................................................................................26

7.2 List of Preparers ................................................................................................................26 City of Hayward
Density Bonus Ordinance Update

ii
Tables
Table 1 Proposed Maximum Density Increases ............................................................................... 5 Table 2 Proposed Increase in Incentives and Concessions .............................................................. 6 Appendices
Appendix A Vehicle Miles Traveled Analysis

Introduction

Addendum to the City of Hayward General Plan 2040 Environmental Impact Report 1 1 Introduction
This document is an addendum to the City of Hayward General Plan 2040 Final Environmental Impact Report (EIR) (State Clearinghouse #2013082015), which was certified by the City of Hayward City Council in July 2014 (2014 General Plan EIR). This addendum addresses the proposed Density Bonus Ordinance Update (“project”). The update includes a proposed zoning ordinance text amendment (ZTA) to revise Chapter 10, Article 17 – Affordable Housing Ordinance and Article 19 – Density Bonus Ordinance – of the City’s Municipal Code’s Zoning Ordinance to facilitate affordable residential development and bring the City’s regulations into compliance with Government Code Section 65915 et seq., also known as the current State Density Bonus Law.

In accordance with Section 15164 of the California Environmental Quality Act (CEQA) Guidelines, codified in Sections 15000 et seq. of Title 14 of the California Code of Regulations, a lead agency must prepare an addendum to a previously certified EIR if some changes or additions are necessary but none of the conditions described in Section 15162 calling for preparation of a subsequent EIR have occurred. Under Section 15162(a), where an EIR has been certified for a project, no subsequent EIR shall be prepared for the project unless the lead agency determines, on the basis of substantial evidence in light of the whole record, that there are substantial changes in the project or circumstances or substantially important new information that will cause the project to have significant new impacts or substantially increase previously identified significant impacts.

The addendum does not need to be circulated for public review but can be included in or attached to the final EIR (Section 15164(c)). The decision-making body must consider the addendum with the final EIR prior to making a decision on the project (Section 15164(d)). An addendum should include a brief explanation of the decision not to prepare a subsequent EIR pursuant to Section 15162, supported by substantial evidence, the lead agency's findings on the project, or elsewhere in the record (Section 15164(e)). A discussion on this topic can be found in Section 4, Decision Not to Prepare a Subsequent Environmental Impact Report, of this addendum.

This addendum has been prepared in accordance with relevant provisions of CEQA (California Public Resources Code Section 21000, et seq.) and the CEQA Guidelines. It describes the proposed project and compares its impacts to those identified in the 2014 General Plan EIR. The analysis demonstrates that the proposed project does not require the preparation of a subsequent or supplemental EIR.

City of Hayward
Density Bonus Ordinance Update

2 2 Background
This section provides an overview of the Hayward 2040 General Plan and its EIR to provide context for this addendum.

2.1 Hayward 2040 General Plan
On July 1, 2014, the City Council of the City of Hayward approved the Hayward 2040 General Plan.

The City’s General Plan provides goals, policies, and programs intending to guide development in the City for 26 years through the planning horizon year of 2040. The General Plan includes 10 elements, including Land Use and Community Character; Mobility; Economic Development; Housing; Community Safety; Public Facilities and Services; Natural Resources; Hazards; Education and Lifelong Learning; and Community Health and Quality of Life which comprise those General Plan elements required by State law (Land Use, Circulation, Housing, Open Space, Conservation, Noise, and Safety), as well as three additional elements. The purpose of the General Plan is to:
 Identify land use, transportation, environmental, economic, and social goals, and policies as they relate to land use and development.
 Provide a basis for a community’s decision-making regarding land use.  Provide citizens an opportunity to participate in the planning and decision-making process.  Inform citizens, developers, decision-makers, and others of the ground rules that guide development in the community.

The City of Hayward’s planning area is located approximately 20 miles southeast of San Francisco, in an area commonly referred to as the “East Bay.” The project planning area includes all the land in the City’s Sphere of Influence as defined by the Alameda County Local Agency Formation Commission (LAFCO), including all land within the Hayward City limits and adjacent unincorporated county land, including Garin Regional Park, open space areas east of the City, portions of San Lorenzo and Castro Valley, and the communities of Hayward Acres, Cherryland, and Fairview.

2.2 Hayward 2040 General Plan EIR
The City Council certified the EIR for the General Plan (2014 General Plan EIR) in July 2014. The 2014 General Plan EIR evaluated potential environmental consequences associated with the General Plan, focusing in depth on the following environmental issue areas:
 Aesthetics and Visual Resources
 Agricultural and Forestry Resources
 Air Quality
 Biological Resources
 Geology, Soils, and Minerals
 Global Climate Change and Greenhouse Gas Emissions
 Hazards and Hazardous Materials
 Historic and Cultural Resources
 Hydrology and Water Quality
 Land Use and Planning
 Noise
 Population and Housing
 Public Services
 Transportation and Circulation
 Utilities and Service Systems
Background

Addendum to the City of Hayward General Plan 2040 Environmental Impact Report 3 The 2014 General Plan EIR found that the General Plan’s goals, policies, and programs as well as required mitigation measures would reduce most of the potential environmental impacts that would occur due to buildout of the General Plan. However, impacts related to air quality, noise, and transportation and circulation were determined to be significant and unavoidable. Accordingly, the City adopted a Statement of Overriding Considerations for these significant and unavoidable impacts as required under CEQA Guidelines Section 15093.

The General Plan EIR studied the impacts of an estimated buildout of 67,112 dwelling units and a population of 208,047 within Hayward City limits and an estimated buildout of 85,794 dwelling units and a population of 265,962 within the Hayward Planning Area1.

The General Plan Draft EIR and Final EIR are available online at: https://www.hayward-ca.gov/your- government/documents/planning-documents and are incorporated herein by reference.

1 Assuming an average household size of 3.1 persons per household City of Hayward
Density Bonus Ordinance Update

4 3 Project Description – Proposed Density
Bonus Ordinance Update
The proposed project would involve adoption by the Hayward City Council of a Zoning Ordinance text amendment (ZTA) to revise Chapter 10, Article 17 – Affordable Housing Ordinance and Article 19 – Density Bonus Ordinance – of the Hayward Municipal Code to facilitate affordable residential development and bring the City’s regulations into compliance with current State Density Bonus Law.

The Density Bonus Ordinance was added to the City of Hayward Zoning Ordinance by Ordinance 05- 15, adopted November 22, 2005, and since adoption has largely remained unchanged despite the adoption of new State Density Bonus regulations. The purpose of the proposed project is to enact certain select provisions that go beyond State Density Bonus Law to further encourage developers to exceed the minimum requirements for providing on-site affordable housing in the City of Hayward. The California Government Code states, as guidance to local agencies, that the State Density Bonus Law “shall be interpreted liberally in favor of producing the maximum number of housing units.”

3.1 Project Location and Zoning Districts
The proposed project would apply the following zoning districts within the entire planning area (the City of Hayward and its sphere of influence) that allow residential and mixed-use development:
 Single-Family Residential (RS)
 Medium Density Residential (RM)
 High Density Residential (RH)
 Residential Natural Preservation (RNP)
 Residential-Office (RO)
 Neighborhood Commercial (CN)
 Neighborhood Commercial-Residential (CN-R)
 General Commercial (GC)
 Commercial Office (CO)
 Sustainable Mixed Use (SMU)
 Limited Access Commercial (CL)
 Central Business (CB)
 Central City-Commercial (CC-C)
 Central City-Residential (CC-R)
 Central City-Plaza (CC-P)
 Agricultural (A)
 Mission Boulevard – Corridor Neighborhood (MB-CN)
 Mission Boulevard – Neighborhood Node (MB-NN)
 Mission Boulevard – Corridor Center (MB-CC)
 Neighborhood Edge (NE)
Project Description – Proposed Density Bonus Ordinance Update

Addendum to the City of Hayward General Plan 2040 Environmental Impact Report 5  Neighborhood General (NG)
 Urban Neighborhood (UN)
 Urban Neighborhood Limited (UN-L)
 Downtown Main Street (DT-MS)
 Urban Core (UC)

3.2 Description of the Density Bonus Ordinance Update
The proposed ZTA would allow a higher density bonus than currently allowed by state law for projects with a certain percentage of affordable units and an even higher density increase for special target projects listed below. The special target projects eligible for an increased density bonus beyond State Density Bonus Law include the following, if they include affordable units on-site as summarized in Table 1 below:
 Mixed income rental projects that provide more than 20% of the rental units for large families (3+ bedrooms)
 Mixed income projects incorporating universal design principles  Mixed income senior housing
 Mixed income college student housing
 Mixed income housing with unit set-asides for foster youth, disabled vets, or individuals experiencing homelessness
Table 1 Proposed Maximum Density Increases
Target Population
Served
State Required
Restricted
Affordable Units
State Maximum
Density Increase
Proposed
Hayward
Maximum Density
Proposed Hayward
Maximum Density Increase
for Special Targeting
Very Low Income 15% 50% 55% 60%
Low Income 23% 50% 55% 60%
Moderate Income 44% 50% 55% 60%
Foster Youth/Disabled
Veterans/Unhoused
people
10% restricted at
very low Income
20% 25% 30% (15% restricted at very
low income)
College Students 20% Low-Income
Student
35% 40% 45% (25% restricted low-
income students)
The types of incentives/concessions allowed for affordable housing projects include the following:
a. A reduction in site development standards or a modification of zoning code requirements or architectural design requirements that exceed the minimum building standards approved by the California Building Standards Commission, resulting in identifiable, financially sufficient, and actual cost reductions; or
b. A reduction in setback and square footage requirements; or c. Approval of mixed-use zoning in conjunction with the Residential Development Project if commercial, office, industrial, or other land uses will reduce the development cost of the Residential Development Project and if the commercial, office, industrial, or other land uses are City of Hayward
Density Bonus Ordinance Update

6 compatible with the Residential Development Project and the existing or planned development in the area where the proposed housing project will be located.

The proposed ZTA also proposes an increase in the number of incentives/concessions from development regulations beyond that allowed by the State Density Bonus Law for projects with a certain percentage of affordable housing units as shown in Table 2 below.

Table 2 Proposed Increase in Incentives and Concessions Number of Incentives/
Concessions Required by State
Proposed Number of
Incentives/Concessions
Proposed by Hayward Percentage of VLI Units
Percentage
of LI Units
Percentage
of MI Units
1 11 5% 10% 10%
2 3 10% 17% 20%
3 4 15% 24% 30%
3 4 100% (LI/VLI) or 100% (MI 20% /LI 80%)
4 5
1 The first tier is not increased because compliance with the Affordable Housing Ordinance’s on-site affordable housing requirement makes the project eligible for one incentive/concession.

VLI = Very Low Income
LI = Low Income
MI = Moderate Income
As described in Section 3.1, Project Location and Zoning Districts, proposed density bonus provisions would apply to zoning districts that allow residential developments:
 Single-Family Residential (RS)
 Medium Density Residential (RM)
 High Density Residential (RH)
 Residential Natural Preservation (RNP)
 Residential-Office (RO)
 Neighborhood Commercial (CN)
 Neighborhood Commercial-Residential (CN-R)
 General Commercial (GC)
 Commercial Office (CO)
 Sustainable Mixed Use (SMU)
 Limited Access Commercial (CL)
 Central Business (CB)
 Central City-Commercial (CC-C)
 Central City-Residential (CC-R)
 Central City-Plaza (CC-P)
 Agricultural (A)
 Mission Boulevard – Corridor Neighborhood (MB-CN)
 Mission Boulevard – Neighborhood Node (MB-NN)
 Mission Boulevard – Corridor Center (MB-CC)
Project Description – Proposed Density Bonus Ordinance Update

Addendum to the City of Hayward General Plan 2040 Environmental Impact Report 7  Neighborhood Edge (NE)
 Neighborhood General (NG)
 Urban Neighborhood (UN)
 Urban Neighborhood Limited (UN-L)
 Downtown Main Street (DT-MS)
 Urban Core (UC)
Depending on the number of Density Bonus applications received, the City may expect to see an incrementally greater increase of units in the future under the proposed updates for projects where use of the density bonus is proposed. The unit increase would depend on the density bonus increase request. The current density allowances for the land uses listed above range from 1.0 to 110 dwelling units per net acre. With the proposed updates, density bonus applicants would be able to receive a maximum 55% density bonus or 60% density bonus (if an applicant provides housing for one of the target groups mentioned above) which would be 5% to 10% greater than what is currently required by state law.

3.3 Relationship of the Proposed Project to
Previous EIR Analysis
The City of Hayward adopted the 2040 General Plan on July 1, 2014. It includes goals and polices that convey the City’s long-term vision and guide local decision making to reach that vision. The General Plan EIR assessed impacts from the implementation of the General Plan and was certified in 2014 when then City Council approved the General Plan. Development under the project would be required to abide by all applicable goals and policies in the adopted General Plan. The proposed Density Bonus Ordinance Update does not include changes to the policies or land use designations of the General Plan or any other amendments to the General Plan; it would also not involve or facilitate development in areas not assumed for development in the EIR certified for the 2040 General Plan in 2014. The location and general footprint of development under the project would be the same as for the citywide buildout analyzed in the 2014 General Plan EIR. The effected zoning districts currently allow residential development at generally the same physical scale as would be allowed under the proposed changes. The proposed project would be consistent with the 2040 General Plan goals and policies to that encourage the development of affordable housing.

City of Hayward
Density Bonus Ordinance Update

8 4 Decision Not to Prepare a Subsequent
Environmental Impact Report
As outlined in Section 15164 of the CEQA Guidelines, a lead agency shall prepare an addendum to a previously certified EIR if some changes or additions are necessary but none of the conditions described in CEQA Guidelines Section 15162 calling for preparation of a subsequent EIR have occurred. The conditions described in Section 15162 include the following:

Substantial changes are proposed in the project which will require major revisions of the previous EIR or negative declaration due to the involvement of new significant environmental effects or a substantial increase in the severity of previously identified significant effects;
Substantial changes occur with respect to the circumstances under which the project is undertaken which will require major revisions of the previous EIR or Negative Declaration due to the involvement of new significant environmental effects or a substantial increase in the severity of previously identified significant effects; or New information of substantial importance, which was not known and could not have been known with the exercise of reasonable diligence at the time the previous EIR was certified as complete or the Negative Declaration was adopted, shows any of the following:
a. The project will have one or more significant effects not discussed in the previous EIR or negative declaration;
b. Significant effects previously examined will be substantially more severe than shown in the previous EIR;
c. Mitigation measures or alternatives previously found not to be feasible would in fact be feasible, and would substantially reduce one or more significant effects of the project, but the project proponents decline to adopt the mitigation measure or alternative; or d. Mitigation measures or alternatives which are considerably different from those analyzed in the previous EIR would substantially reduce one or more significant effects on the environment, but the project proponents decline to adopt the mitigation measure or alternative.

The impact analysis that follows demonstrates that the proposed Density Bonus Ordinance Update would not result in new significant environmental impacts beyond those that have already been identified and characterized in the General Plan EIR in 2014, and that there are no substantial changes in the project or circumstances or substantially important new information that would cause the project to have significant new impacts or substantially increase previously identified significant impacts. None of the conditions described above in CEQA Guidelines Section 15162 that would call for preparation of a subsequent EIR have occurred or would occur as a result of the proposed project. Therefore, this addendum is the appropriate level of environmental documentation under CEQA. This addendum will be considered by the City’s decision-making body in its consideration of the proposed project.

Environmental Impacts

Addendum to the City of Hayward General Plan 2040 Environmental Impact Report 9 5 Environmental Impacts
This addendum evaluates potential environmental impacts that could result from the proposed project in the context of/compared to the growth projects and impacts studied in the 2014 General Plan EIR. The existing environmental conditions in and around the project area are substantially the same under present conditions as described in the 2014 General Plan EIR. The analysis below provides updates where necessary to characterize potential impacts.

Appendix G of the CEQA Guidelines provides a checklist of environmental issue areas suggested for assessment in CEQA analyses. Since preparation of the 2014 General Plan EIR, revisions to the CEQA Guidelines have occurred to include environmental issue areas pertaining to energy, vehicle miles traveled (VMT), tribal cultural resources, and wildfire. To provide a thorough and conservative analysis of potential impacts associated with the proposed project, this addendum addresses the 20 environmental issue areas suggested by Appendix G of the 2022 CEQA Guidelines, listed below.  Aesthetics
 Agriculture and Forest Resources
 Air Quality
 Biological Resources
 Cultural Resources
 Energy
 Geology and Soils
 Greenhouse Gas Emissions
 Hazards and Hazardous Materials
 Hydrology and Water Quality
 Land Use and Planning
 Mineral Resources
 Noise
 Population and Housing
 Public Services
 Recreation
 Transportation
 Tribal Cultural Resources
 Utilities and Service Systems
 Wildfire
Potential environmental impacts of the proposed project are analyzed to determine whether they are consistent with the impact analysis provided in the 2014 General Plan EIR, and whether additional mitigation measures are required to minimize or avoid further potential impacts. Where the following analysis identifies impacts, discussion of previously identified mitigation measures from the 2014 General Plan EIR and existing applicable policies and regulations are discussed, as relevant, with respect to mitigating potential impacts from the proposed project.

5.1 Aesthetics
Impacts Identified in the 2014 General Plan EIR
Impacts related to aesthetics were analyzed on pages 5-1 through 5-34 of the General Plan EIR. The General Plan EIR determined that cumulative mitigating benefits of the General Plan programs and policies would result in a less than significant impacts to scenic vistas; scenic resources; visual character or quality; and light or glare that would affect day or nighttime views. Therefore, impacts regarding aesthetics were determined to be less than significant, and no mitigation was required.

City of Hayward
Density Bonus Ordinance Update

10 Impacts of the Proposed Project
The proposed Density Bonus Ordinance Update would not involve development in areas not assumed for development in the EIR certified for the 2040 General Plan in 2014; the location and general footprint of development under the project would be the same as for the citywide buildout analyzed in the 2014 General Plan EIR. The affected zoning districts currently allow residential development at generally the same physical scale as would be allowed under the proposed changes.

The modest incremental increase in allowable density and building scale would not result in a substantial change in the potential for projects to affect scenic views, the potential to damage scenic resources, or the potential to introduce new sources of light and glare. Height increases are currently allowed under State Density Bonus Law. California Government Code Section 65915(d)(2)(D) allows a height increase as an incentive for a mixed-income project that qualifies for a density bonus, and the proposed project would not allow for greater heights than currently approvable. Impacts would remain less than significant.

Conclusion
No substantial changes have occurred that require major revisions to the 2014 General Plan EIR.

There is no new information indicating that the proposed project would have new significant impacts or substantially more severe significant impacts with respect to aesthetics than were identified in the 2014 General Plan EIR. None of the conditions listed in CEQA Guidelines Section 15162 requiring preparation of a subsequent EIR would occur. Existing General Plan programs and policies that address aesthetics would continue to apply to development under the proposed project. No new mitigation measures are necessary.

5.2 Agriculture and Forestry Resources
Impacts Identified in the 2014 General Plan EIR
The General Plan EIR discusses agricultural impacts in the agricultural and forestry resources section, on pages 6-1 through 6-6. The General Plan EIR determined that the cumulative mitigating benefits of the General Plan programs and policies would result in a less than significant impacts to agriculture and forestry resources and no mitigation was required.

Impacts of the Proposed Project
The proposed Density Bonus Ordinance Update would not involve development in areas not assumed for development in the EIR certified for the 2040 General Plan in 2014; the location and general footprint of development under the project would be the same as for the citywide buildout analyzed in the 2014 General Plan EIR. The affected zoning districts currently allow residential development at generally the same physical scale as would be allowed under the proposed changes.

The modest incremental increase in allowable density and building scale would not result in substantially greater development footprints or excavation/disturbance depth or extent such new or greater impacts to agriculture and forestry resources would occur. Impacts would remain less than significant.

Conclusion
No substantial changes have occurred that require major revisions to the 2014 General Plan EIR.

There is no new information indicating that the proposed project would have new significant Environmental Impacts

Addendum to the City of Hayward General Plan 2040 Environmental Impact Report 11 impacts or substantially more severe significant impacts with respect to agriculture and forest resources than were identified in the 2014 General Plan EIR. None of the conditions listed in CEQA Guidelines Section 15162 requiring preparation of a subsequent EIR would occur. No new mitigation measures are necessary.

5.3 Air Quality
Impacts Identified in the 2014 General Plan EIR
The General Plan EIR discusses air quality impacts on pages 7-1 through 7-40 and finds that odor- related impacts would be less than significant. Impacts associated with short-term construction, long-term operational emissions, and health risk exposure to toxic air contaminants (TAC) and particulate matter 2.5 (PM2.5) would be significant and unavoidable, even after application of all feasible mitigation. The General Plan EIR includes the incorporation of specific source-reduction and receptor-oriented risk reduction measures and best management practices (BMP) in the General Plan, although the overall effectiveness of these measures in reducing communitywide health risk could not be quantified. These impacts would, therefore, remain significant and unavoidable.

Because the General Plan would not be fully consistent with the primary goals of the Bay Area 2010 Clean Air Plan with the elevated emissions projected, the General Plan EIR found that this impact would be significant and unavoidable.

Impacts of the Proposed Project
The proposed Density Bonus Ordinance Update would allow a higher density bonus than currently allowed by State law for projects that would include a certain percentage of affordable units, and an even higher density increase for special target projects, in specific zoning districts in Hayward. The proposed provisions would be voluntary and would only apply in zoning districts that already allow residential housing. It would be speculative to project how many developers would request to apply the provisions, to what extent, and in what locations. Nevertheless, in projects that make use of the provisions, the allowed density could increase by up to 10 percent beyond what is currently allowed under State law, which would directly generate population growth. Still, as discussed in Section

5.14, Population and Housing, the modest increase in potential additional density that would be facilitated on limited sites in Hayward under the proposed Density Bonus Ordinance Update would not cause Hayward’s population to exceed the General Plan projections and associated analysis in the EIR. The proposed Density Bonus Ordinance Update would also not involve development in areas not assumed for development in the EIR certified for the 2040 General Plan in 2014. The affected zoning districts currently allow residential development at generally the same physical scale as would be allowed under the proposed changes.

The modest incremental increase in allowable density and building scale would not result in substantially more intense construction phases, or in different or substantially more intense land uses in the affected zoning districts. As discussed in Section 5.17, Transportation, the project would not result in a substantial increase in vehicle trips or vehicle miles travelled such that a significant increase in emissions would result. General Plan policies and programs, standard conditions of approval, and Municipal Code provisions that address air quality would apply to development under the proposed project. Impacts would not be substantially greater than those analyzed in the 2014 General Plan EIR.

City of Hayward
Density Bonus Ordinance Update

12 Conclusion
No substantial changes have occurred that require major revisions to the 2014 General Plan EIR.

There is no new information indicating that the proposed project would have new significant impacts or substantially more severe significant impacts with respect to air quality than were identified in the 2014 General Plan EIR. None of the conditions listed in CEQA Guidelines Section 15162 requiring preparation of a subsequent EIR would occur. Local, State, Bay Area Air Quality Management District (BAAQMD), and federal regulations as well as General Plan programs and policies would continue to apply to development under the proposed project, and impacts would be substantially similar to those analyzed in the 2014 General Plan EIR. No new mitigation measures are necessary.

5.4 Biological Resources
Impacts Identified in the 2014 General Plan EIR
The General Plan EIR discusses biological resources impacts on pages 8-1 through 8-32 and finds impacts to be less than significant. The General Plan EIR determined that the cumulative mitigating benefits of the General Plan programs and policies would result in a less than significant impact to biological resources and no mitigation was required.

Impacts of the Proposed Project
The proposed Density Bonus Ordinance Update would not involve development in areas not assumed for development in the EIR certified for the 2040 General Plan in 2014; the location and general footprint of development under the project would be the same as for the citywide buildout analyzed in the 2014 General Plan EIR. The affected zoning districts currently allow residential development at generally the same physical scale as would be allowed under the proposed changes.

The modest incremental increase in allowable density and building scale would not result in substantially greater development footprints or excavation/disturbance depth or extent such that additional or greater impacts to biological resources would occur. General Plan programs and policies related to biological resources, as well as existing regulations from state and federal agencies, would continue to apply to development under the proposed project and would ensure that impacts remain less than significant.

Conclusion
No substantial changes have occurred that require major revisions to the 2014 General Plan EIR.

There is no new information indicating that the proposed project would have new significant impacts or substantially more severe significant impacts with respect to biological resources than were identified in the 2014 General Plan EIR. None of the conditions listed in CEQA Guidelines Section 15162 requiring preparation of a subsequent EIR would occur. No new mitigation measures are necessary.

5.5 Cultural Resources
Impacts Identified in the 2014 General Plan EIR
The General Plan EIR analyzes cultural resources on pages 12-1 through 12-13 and finds that impacts to sites of local importance, overall historic setting, and previously undiscovered Environmental Impacts

Addendum to the City of Hayward General Plan 2040 Environmental Impact Report 13 archaeological resources would be less than significant and impacts to paleontological resources would be less than significant.

Impacts of the Proposed Project
The proposed Density Bonus Ordinance Update would not involve development in areas not assumed for development in the EIR certified for the 2040 General Plan in 2014; the location and general footprint of development under the project would be the same as for the citywide buildout analyzed in the 2014 General Plan EIR. The affected zoning districts currently allow residential development at generally the same physical scale as would be allowed under the proposed changes.

The modest incremental increase in allowable density and building scale would not result in more demolition potential, substantially greater development footprints, or excavation/disturbance depth or extent. General Plan policies and local, state, and federal regulations related to cultural resources would continue to apply to development under the proposed project and impacts would remain less than significant.

Conclusion
No substantial changes have occurred that require major revisions to the 2014 General Plan EIR.

There is no new information indicating that the proposed project would have new significant impacts or substantially more severe significant impacts with respect to cultural resources than were identified in the 2014 General Plan EIR. None of the conditions listed in CEQA Guidelines Section 15162 requiring preparation of a subsequent EIR would occur and no new mitigation measures are necessary.

5.6 Energy
Impacts Identified in the 2012 EIR
The General Plan EIR analyzes impacts on energy on pages 21-9 through 21-24. This discussion addresses the issues of inefficient, wasteful, or unnecessary consumption of energy. The General Plan EIR identifies impacts related to energy consumption as less than significant.

Impacts of the Proposed Project
The proposed Density Bonus Ordinance Update would allow a higher density bonus than currently allowed by State law for projects that would include a certain percentage of affordable units, and an even higher density increase for special target projects, in specific zoning districts in Hayward. The proposed provisions would be voluntary and would only apply in zoning districts that already allow residential housing. It would be speculative to project how many developers would request to apply the provisions, to what extent, and in what locations. Nevertheless, in projects that make use of the provisions, the allowed density could increase by up to 10 percent beyond what is currently allowed under state law, which would directly generate population growth. Still, as discussed in Section

5.14, Population and Housing, the modest increase in potential additional density that would be facilitated on limited sites in Hayward under the proposed Density Bonus Ordinance Update would not cause Hayward’s population to exceed the General Plan projections and associated analysis in the EIR. The proposed Density Bonus Ordinance Update would also not involve development in areas not assumed for development in the EIR certified for the 2040 General Plan in 2014. The affected zoning districts currently allow residential development at generally the same physical scale as would be allowed under the proposed changes.

City of Hayward
Density Bonus Ordinance Update

14 The modest incremental increase in allowable density and building scale would not result in substantially more intense construction phases, or in different or substantially more intense land uses in the affected zoning districts. As discussed in Section 5.17, Transportation, the project would not result in a substantial increase in vehicle trips or vehicle miles travelled such that a significant increase in energy use would result. In addition, many projects would be required to comply with the City’s Reach Code, which was not in effect in 2014 and which states that new low-rise residential buildings (three stories and less) must be all electric and requires electric vehicle charging infrastructure beyond that required in the California Green Building Standards Code.

Impacts would not be substantially greater than those analyzed in the 2014 General Plan EIR.

Conclusion
No substantial changes have occurred that require major revisions to the 2014 General Plan EIR.

There is no new information indicating that the proposed project would have new significant impacts or substantially more severe significant impacts with respect to energy than were identified in the 2014 General Plan EIR. None of the conditions listed in CEQA Guidelines Section 15162 requiring preparation of a subsequent EIR would occur. No new mitigation measures are necessary.

5.7 Geology and Soils
Impacts Identified in the 2014 General Plan EIR
The General Plan EIR discusses geology and soils impacts on pages 9-1 through 9-18 and concludes that impacts related to geology and soils would be less than significant.

Impacts of the Proposed Project
The proposed Density Bonus Ordinance Update would not involve development in areas not assumed for development in the EIR certified for the 2040 General Plan in 2014; the location and general footprint of development under the project would be the same as for the citywide buildout analyzed in the 2014 General Plan EIR. The affected zoning districts currently allow residential development at generally the same physical scale as would be allowed under the proposed changes.

The modest incremental increase in allowable density and building scale would not require substantially different foundation or building designs or engineering, or result in substantially greater development footprints or excavation/disturbance depth or extent. General Plan policies and local, State, and federal regulations, including the California Building Code, related to building safety and seismic considerations would continue to apply to development under the proposed project and impacts would remain less than significant.

Conclusion
No substantial changes have occurred that require major revisions to the 2014 General Plan EIR.

There is no new information indicating that the proposed project would have new significant impacts or substantially more severe significant impacts with respect to geology and soils than were identified in the 2014 General Plan EIR. None of the conditions listed in CEQA Guidelines Section 15162 requiring preparation of a subsequent EIR would occur. No new mitigation measures are necessary.

Environmental Impacts

Addendum to the City of Hayward General Plan 2040 Environmental Impact Report 15

5.8 Greenhouse Gas Emissions
Impacts Identified in the 2014 General Plan EIR
The General Plan EIR analyzes GHG emissions on pages 10-1 through 10-42 and concludes that impacts would be less than significant.

Impacts of the Proposed Project
The proposed Density Bonus Ordinance Update would allow a higher density bonus than currently allowed by State law for projects that would include a certain percentage of affordable units, and an even higher density increase for special target projects, in specific zoning districts in Hayward. The proposed provisions would be voluntary and would only apply in zoning districts that already allow residential housing. It would be speculative to project how many developers would request to apply the provisions, to what extent, and in what locations. Nevertheless, in projects that make use of the provisions, the allowed density could increase by up to 10 percent beyond what is currently allowed under State law, which would directly generate population growth. Still, as discussed in Section

5.14, Population and Housing, the modest increase in potential additional density that would be facilitated on limited sites in Hayward under the proposed Density Bonus Ordinance Update would not cause Hayward’s population to exceed the General Plan projections and associated analysis in the EIR. The proposed Density Bonus Ordinance Update would also not involve development in areas not assumed for development in the EIR certified for the 2040 General Plan in 2014. The affected zoning districts currently allow residential development at generally the same physical scale as would be allowed under the proposed changes.

The modest incremental increase in allowable density and building scale would not result in substantially more intense construction phases, or in different or substantially more intense land uses in the affected zoning districts. As discussed in Section 5.17, Transportation, the project would not result in a substantial increase in vehicle trips or vehicle miles travelled such that a significant increase in greenhouse gas emissions would result. In addition, many projects would be required to comply with the City’s Reach Code, which was not in effect in 2014 and which states that new low- rise residential buildings (three stories and less) must be all electric and requires electric vehicle charging infrastructure beyond that required in the California Green Building Standards Code.

Impacts would not be substantially greater than those analyzed in the 2014 General Plan EIR.

Conclusion
No substantial changes have occurred that require major revisions to the 2014 General Plan EIR.

There is no new information indicating that the proposed project would have new significant impacts or substantially more severe significant impacts with respect to GHG emissions than were identified in the 2014 General Plan EIR. None of the conditions listed in CEQA Guidelines Section 15162 requiring preparation of a subsequent EIR would occur. No new or revised mitigation measures are necessary.

5.9 Hazards and Hazardous Materials
Impacts Identified in the 2014 General Plan EIR
The General Plan EIR discusses hazardous materials impacts on pages 11-1 through 11-24 and finds that impacts related to hazards and hazardous materials in the City would be less than significant.

City of Hayward
Density Bonus Ordinance Update

16 Impacts of the Proposed Project
The proposed Density Bonus Ordinance Update would not involve development in areas not assumed for development in the EIR certified for the 2040 General Plan in 2014; the location and general footprint of development under the project would be the same as for the citywide buildout analyzed in the 2014 General Plan EIR. The affected zoning districts currently allow residential development at generally the same physical scale as would be allowed under the proposed changes.

The modest incremental increase in allowable density and building scale would not result in substantially greater development footprints or excavation/disturbance depth or extent such that the potential to encounter hazardous materials or conditions would differ from those under General Plan buildout. General Plan policies and local, state, and federal regulations related to hazards and hazardous materials would continue to apply to development under the proposed project and impacts would remain less than significant.

Conclusion
No substantial changes have occurred that require major revisions to the 2014 General Plan EIR.

There is no new information indicating that the proposed project would have new significant impacts or substantially more severe significant impacts with respect to hazards and hazardous materials than were identified in the 2014 General Plan EIR. None of the conditions listed in CEQA Guidelines Section 15162 requiring preparation of a subsequent EIR would occur. No new mitigation measures are necessary.

5.10 Hydrology and Water Quality
Impacts Identified in the 2014 General Plan EIR
The General Plan EIR discusses hydrology and water quality impacts on pages 13-1 through 13-40.

The EIR found that potential impacts to hydrology and water quality would be less than significant.

Impacts of the Proposed Project
The proposed Density Bonus Ordinance Update would not involve development in areas not assumed for development in the EIR certified for the 2040 General Plan in 2014; the location and general footprint of development under the project would be the same as for the citywide buildout analyzed in the 2014 General Plan EIR. The affected zoning districts currently allow residential development at generally the same physical scale as would be allowed under the proposed changes.

The modest incremental increase in allowable density and building scale would not result in substantially greater development footprints, impermeable surfaces, or excavation/disturbance depth or extent. General Plan policies and local, state, and federal regulations related to drainage and water quality would continue to apply to development under the proposed project and impacts would remain less than significant.

Conclusion
No substantial changes have occurred that require major revisions to the 2014 General Plan EIR.

There is no new information indicating that the proposed project would have new significant impacts or substantially more severe significant impacts with respect to hydrology and water quality than were identified in the 2014 General Plan EIR. None of the conditions listed in CEQA Guidelines Environmental Impacts

Addendum to the City of Hayward General Plan 2040 Environmental Impact Report 17 Section 15162 requiring preparation of a subsequent EIR would occur. No new mitigation measures are necessary.

5.11 Land Use and Planning
Impacts Identified in the 2014 General Plan EIR
The General Plan EIR addresses land use and planning on pages 14-1 through 14-42. Impacts to land use and planning were determined to be less than significant.

Impacts of the Proposed Project
The proposed Density Bonus Ordinance Update would allow a higher density bonus than currently allowed by State law for projects that would include a certain percentage of affordable units, and an even higher density increase for special target projects, in zoning districts that allow residential development in Hayward. The proposed provisions would be voluntary and would only apply in zoning districts that already allow residential housing. The proposed Density Bonus Ordinance Update would not involve development in areas not assumed for development in the EIR certified for the 2040 General Plan in 2014 and the proposed use it would support – residential housing – is an allowed use in all affected zoning districts, as studied in the 2014 General Plan EIR. The affected zoning districts currently allow residential development at generally the same physical scale as would be allowed under the proposed changes. General Plan policies and Zoning Ordinance requirements (except as modified pursuant to specific project requests as allowed by the proposed ZTA and State law) would continue to apply to development under the proposed project. Impacts would remain less than significant with adoption of the proposed project by the Hayward City Council.

Conclusion
No substantial changes have occurred that require major revisions to the 2014 General Plan EIR.

There is no new information indicating that the proposed project would have new significant impacts or substantially more severe significant impacts with respect to land use and planning than were identified in the 2014 General Plan EIR. None of the conditions listed in CEQA Guidelines Section 15162 requiring preparation of a subsequent EIR would occur. No new mitigation measures are necessary.

5.12 Mineral Resources
Impacts Identified in the 2014 General Plan EIR
The General Plan EIR analyzes mineral resources in Section 10, Geology, Soils, and Minerals and finds that impacts would be less than significant.

Impacts of the Proposed Project
The proposed Density Bonus Ordinance Update would not involve development in areas not assumed for development in the EIR certified for the 2040 General Plan in 2014; the location and general footprint of development under the project would be the same as for the citywide buildout analyzed in the 2014 General Plan EIR. The only State-designated mineral resource location in City of Hayward
Density Bonus Ordinance Update

18 Hayward is the La Vista Quarry, which would not be affected by the proposed project. Impacts would remain less than significant.

Conclusion
No substantial changes have occurred that require major revisions to the 2014 General Plan EIR.

There is no new information indicating that the proposed project would have new significant impacts or substantially more severe significant impacts with respect to mineral resources than were identified in the 2014 General Plan EIR. None of the conditions listed in CEQA Guidelines Section 15162 requiring preparation of a subsequent EIR would occur. No new mitigation measures are necessary.

5.13 Noise
Impacts Identified in the 2014 General Plan EIR
The General Plan EIR analyzes noise on pages 15-1 through 15-32. Impacts due to construction- related ground vibration, railroad generated noise, and noise generated from stationary sources were found to be less than significant. Impacts related to short-term and long-term construction- generated noise, and traffic-related noise, were found to be significant and unavoidable even with General Plan policies that would reduce noise from these sources.

Impacts of the Proposed Project
The proposed Density Bonus Ordinance Update would allow a higher density bonus than currently allowed by State law for projects that would include a certain percentage of affordable units, and an even higher density increase for special target projects, in specific zoning districts in Hayward. The proposed provisions would be voluntary and would only apply in zoning districts that already allow residential housing. It would be speculative to project how many developers would request to apply the provisions, to what extent, and in what locations. Nevertheless, in projects that make use of the provisions, the allowed density could increase by up to 10 percent beyond what is currently allowed under State law, which would directly generate population growth.

The proposed Density Bonus Ordinance Update would not involve development in areas not assumed for development in the EIR certified for the 2040 General Plan in 2014. The affected zoning districts currently allow residential development at generally the same physical scale as would be allowed under the proposed changes.

The modest incremental increase in allowable density and building scale would not result in substantially louder or longer construction phases, or in different or substantially more intense land uses in the affected zoning districts. As discussed below in Section 5.17, Transportation, the project would not result in a substantial increase in vehicle trips or vehicle miles travelled such that a significant increase in traffic noise would result. General Plan policies and programs, standard conditions of approval, and Municipal Code provisions for noise reduction would apply to development under the proposed project. Impacts would not be substantially greater than those analyzed in the 2014 General Plan EIR.

Conclusion
No substantial changes have occurred that require major revisions to the 2014 General Plan EIR.

There is no new information indicating that the proposed project would have new significant Environmental Impacts

Addendum to the City of Hayward General Plan 2040 Environmental Impact Report 19 impacts or substantially more severe significant impacts with respect to noise than were identified in the 2014 General Plan EIR. None of the conditions listed in CEQA Guidelines Section 15162 requiring preparation of a subsequent EIR would occur. No new mitigation measures are necessary.

5.14 Population and Housing
Impacts Identified in the 2014 General Plan EIR
The General Plan EIR discusses population and housing on pages 16-1 through 16-7. The General Plan EIR accounts for a population of 265,962 people at full buildout of the Hayward Planning Area and finds that impacts would be less than significant.

Impacts of the Proposed Project
The proposed Density Bonus Ordinance Update would allow a higher density bonus than currently allowed by State law for projects that would include a certain percentage of affordable units, and an even higher density increase for special target projects, in specific zoning districts in Hayward. The proposed provisions would be voluntary and would only apply in zoning districts that already allow residential housing. It would be speculative to project how many developers would request to apply the provisions, to what extent, and in what locations. Nevertheless, in projects that make use of the provisions, the allowed density could increase by up to 10 percent beyond what is currently allowed under State law, which would directly generate population growth.

The population of Hayward as of January 2022 was approximately 160,591 persons (California Department of Finance 2022). The 2040 General Plan EIR studied the impacts of a population increase up to 208,047 by 2040. The modest (up to 10 percent) increase in potential additional density that would be facilitated on limited sites in Hayward under the proposed Density Bonus Ordinance Update would not cause Hayward’s population to exceed the General Plan projections and associated analysis in the EIR, and impacts would remain less than significant. The proposed Density Bonus Ordinance Update would not involve development in areas not assumed for development in the EIR certified for the 2040 General Plan in 2014. The affected zoning districts currently allow residential development at generally the same physical scale as currently allowed; therefore, potential displacement impacts would be the same as for buildout under the General Plan as analyzed in the 2014 General Plan EIR and would remain less than significant.

Conclusion
No substantial changes have occurred that require major revisions to the 2014 General Plan EIR.

There is no new information indicating that the proposed project would have new significant impacts or substantially more severe significant impacts with respect to population and housing than were identified in the 2014 General Plan EIR. None of the conditions listed in CEQA Guidelines Section 15162 requiring preparation of a subsequent EIR would occur. No new mitigation measures are necessary.

5.15 Public Services
Impacts Identified in the 2014 General Plan EIR
The General Plan EIR analyzes public services on pages 17-1 through 17-42 and concludes that impacts regarding public services would be less than significant.

City of Hayward
Density Bonus Ordinance Update

20 Impacts of the Proposed Project
As discussed above in Section 5.14, Population and Housing, the modest (up to 10 percent) increase in potential additional density that would be facilitated on limited sites in Hayward under the proposed Density Bonus Ordinance Update would not cause Hayward’s population to exceed the General Plan projections and associated analysis in the EIR. The proposed Density Bonus Ordinance Update would also not involve development in areas not assumed for development in the EIR certified for the 2040 General Plan in 2014, which are currently served by fire services, police services, schools, and libraries. The affected zoning districts currently allow residential development at generally the same physical scale as currently allowed; therefore, potential impacts would be generally the same as for buildout under the General Plan as analyzed in the 2014 General Plan EIR and new or expanded facilities would not be required as a result in the proposed project specifically.

Impacts would remain less than significant.

Conclusion
No substantial changes have occurred that require major revisions to the 2014 General Plan EIR.

There is no new information indicating that the proposed project would have new significant impacts or substantially more severe significant impacts with respect to public services than were identified in the 2014 General Plan EIR. None of the conditions listed in CEQA Guidelines Section 15162 requiring preparation of a subsequent EIR would occur. No new mitigation measures are necessary.

5.16 Recreation
Impacts Identified in the 2014 General Plan EIR
As discussed in Section 17, Public Services, of the General Plan EIR (pages 17-1 through 17-42) impacts to recreation were determined to be less than significant.

Impacts of the Proposed Project
As discussed above in Section 5.14, Population and Housing, the modest (up to 10 percent) increase in potential additional density that would be facilitated on limited sites in Hayward under the proposed Density Bonus Ordinance Update would not cause Hayward’s population to exceed the General Plan projections and associated analysis in the EIR. The proposed Density Bonus Ordinance Update would also not involve development in areas not assumed for development in the EIR certified for the 2040 General Plan in 2014, which are currently served by parks and recreation facilities and services. The affected zoning districts currently allow residential development at generally the same physical scale as currently allowed; therefore, potential impacts would be generally the same as for buildout under the General Plan as analyzed in the 2014 General Plan EIR.

Impacts would remain less than significant.

Conclusion
No substantial changes have occurred that require major revisions to the 2014 General Plan EIR.

There is no new information indicating that the proposed project would have new significant impacts or substantially more severe significant impacts with respect to recreation than were identified in the 2014 General Plan EIR. None of the conditions listed in CEQA Guidelines Section Environmental Impacts

Addendum to the City of Hayward General Plan 2040 Environmental Impact Report 21 15162 requiring preparation of a subsequent EIR would occur. No new mitigation measures are necessary.

5.17 Transportation
Impacts Identified in the 2014 General Plan EIR
The General Plan EIR evaluates transportation impacts on pages 18-1 through 18-44, using level-of- service (LOS) as the methodology and to assess significance. Since certification of the EIR and pursuant to Senate Bill (SB) 743, the City of Hayward has adopted vehicle miles traveled (VMT) as the primary metric to analyze transportation impacts instead of LOS.

Impacts of the Proposed Project
Buildout under the proposed project would be consistent with over buildout allowed under the General Plan and analyzed in the 2014 General Plan EIR. It would be speculative to project how many developers would request to apply the provisions, to what extent, and in what locations. In projects that make use of the provisions, the allowed density could increase by up to 10 percent beyond what is currently allowed under State law, which would directly generate population growth.

Hayward’s residential zoning districts are largely served by transit, and many are in areas with more than 15 percent below average VMT per capita. In addition, affordable units and multi-family units typically generate less VMT than market rate housing and single-family dwellings. The modest increase in density that could be facilitated by the project on limited infill sites, combined with the lower-VMT generation of the types of units that would be facilitated under the project would not be expected to substantially increase VMT per capita in Hayward. VMT would not be substantially greater than for General Plan buildout under current conditions.

The proposed Density Bonus Ordinance Update would not involve development in areas not assumed for development in the EIR certified for the 2040 General Plan in 2014. The affected zoning districts currently allow residential development at generally the same physical scale as would be allowed under the proposed changes. The modest incremental increase in allowable density and building scale would not substantially change the EIR’s conclusions regarding traffic safety, alternative travel modes, or incompatible uses. Impacts would be generally the same as for General Plan buildout under current conditions.

Conclusion
No substantial changes have occurred that require major revisions to the 2014 General Plan EIR.

There is no new information indicating that the proposed project would have new significant impacts or substantially more significant impacts with respect to transportation and traffic than were identified in the 2014 General Plan EIR. None of the conditions listed in CEQA Guidelines Section 15162 requiring preparation of a subsequent EIR would occur. No new mitigation measures are necessary.

City of Hayward
Density Bonus Ordinance Update

22 5.18 Tribal Cultural Resources
Impacts Identified in the 2014 General Plan EIR
Tribal Cultural Resources was added to the 2016 CEQA Guidelines as a separate environmental issue area. Thus, the 2014 General Plan EIR does not include a chapter or section dedicated to analysis of impacts to tribal cultural resources. However, it does analyze general impacts to historical and cultural resources (including archeological resources that may originate from Native American tribes) in Section 12, Historical and Cultural Resources, and concludes that impacts to historic and cultural resources would be less than significant. Implementation of existing regulations and General Plan policies LU-8.3 (Historic Preservation), LU-8.4 (Survey and Historic Reports), and LU-

8.13 (Planning Study Considerations) would ensure that archaeological sites and resources, including undocumented human remains and those resources specifically of significance to Native Americans, would be protected, properly documented, and integral to the City’s planning process.

Impacts of the Proposed Project
The proposed Density Bonus Ordinance Update would not involve development in areas not assumed for development in the EIR certified for the 2040 General Plan in 2014. The affected zoning districts currently allow residential development at generally the same physical scale as would be allowed under the proposed changes. The modest incremental increase in allowable density and building scale would not result in substantially greater development footprints or excavation/disturbance depth or extent; accordingly, potential impacts to Tribal cultural resources would be the same as under existing conditions. Finally, in addition to the General Plan policies listed above, California Assembly Bill 52 of 2014 (AB 52) came into effect after the certification of the 2014 General Plan EIR. In addition to adding tribal cultural resources to the CEQA Appendix G checklist, AB 52 established a formal consultation process for California tribes regarding those resources. The consultation process must be completed before a CEQA document can be certified.

Under AB 52, lead agencies are required to “begin consultation with a California Native American tribe that is traditionally and culturally affiliated with the geographic area of the proposed project.” Native American tribes to be included in the process are those that have requested notice of projects proposed within the jurisdiction of the lead agency. This process has improved identification and protection of Tribal cultural resources.

Conclusion
No substantial changes have occurred that require major revisions to the 2014 General Plan EIR.

There is no new information indicating that the proposed project would have new significant impacts or substantially more severe significant impacts with respect to tribal cultural resources than were identified in the 2014 General Plan EIR. None of the conditions listed in CEQA Guidelines Section 15162 requiring preparation of a subsequent EIR would occur. No new mitigation measures are necessary.

5.19 Utilities and Service Systems
Impacts Identified in the 2014 General Plan EIR
The General Plan EIR analyzes impacts on utilities and service systems on pages 19-1 through 19-34.

This discussion addresses the issues of water supply and delivery, wastewater collection and Environmental Impacts

Addendum to the City of Hayward General Plan 2040 Environmental Impact Report 23 treatment, and solid waste disposal, recycling, and composting. The General Plan EIR identifies impacts to utilities and service systems as less than significant.

Impacts of the Proposed Project
As discussed above in Section 5.14, Population and Housing, the modest (up to 10 percent) increase in potential additional density that would be facilitated on limited sites in Hayward under the proposed Density Bonus Ordinance Update would not cause Hayward’s population to exceed the General Plan projections and associated analysis in the EIR. The proposed Density Bonus Ordinance Update would also not involve development in areas not assumed for development in the EIR certified for the 2040 General Plan in 2014, which are currently served by utilities and service systems. The affected zoning districts currently allow residential development at generally the same physical scale as currently allowed; therefore, potential impacts would be generally the same as for buildout under the General Plan as analyzed in the 2014 General Plan EIR and new or expanded facilities would not be required as a result in the proposed project specifically. Impacts would remain less than significant.

Conclusion
No substantial changes have occurred that require major revisions to the 2014 General Plan EIR.

There is no new information indicating that the proposed project would have new significant impacts or substantially more severe significant impacts with respect to utilities and service systems than were identified in the 2014 General Plan EIR. None of the conditions listed in CEQA Guidelines Section 15162 requiring preparation of a subsequent EIR would occur. No new mitigation measures are necessary.

5.20 Wildfire
Impacts Identified in the 2014 General Plan EIR
The General Plan EIR analyzes impacts related to wildfire on pages 11-1 through 11-24. The General Plan EIR identifies impacts related to wildfire as less than significant.

Impacts of the Proposed Project
Recent changes to the CEQA Guidelines have added additional checklist questions related to wildfire hazards to Appendix G of the CEQA Guidelines. Therefore, additional discussion related to wildfire hazards is provided herein to supplement the 2014 General Plan EIR. Wildfires are of particular concern in areas designated as a Very High Fire Hazard Severity Zone (VHFHSZ). The areas where the proposed ZTA would apply are not located within or adjacent to land classified as a VHFHSZ (CAL FIRE 2022). In addition, the proposed Density Bonus Ordinance Update would not involve development in areas not assumed for development in the EIR certified for the 2040 General Plan in 2014; the land uses, location, and general footprint of development under the project would be the same as for the citywide buildout analyzed in the 2014 General Plan EIR. The affected zoning districts currently allow residential development at generally the same physical scale as would be allowed under the proposed changes. Impacts would remain less than significant.

City of Hayward
Density Bonus Ordinance Update

24 Conclusion
No substantial changes have occurred that require major revisions to the 2014 General Plan EIR.

There is no new information indicating that the proposed project would have new significant impacts or substantially more severe significant impacts with respect wildfire than were identified in the 2014 General Plan EIR. None of the conditions listed in CEQA Guidelines Section 15162 requiring preparation of a subsequent EIR would occur. No new mitigation measures are necessary.

Conclusion

Addendum to the City of Hayward General Plan 2040 Environmental Impact Report 25 6 Conclusion
The City of Hayward, acting as the lead agency, determined that an addendum is the appropriate environmental document under CEQA because the proposed project would not require revisions to the adopted General Plan’s certified EIR due to the involvement of new significant environmental effects or substantial increases in the severity of significant effects previously identified in the General Plan Update EIR.

There are no changed circumstances or new information that meets the standards for requiring further environmental review under CEQA Guidelines Section 15162. Thus, these circumstances and information would not result in new or more severe impacts beyond what were addressed in the General Plan Final EIR and would not meet any other standards under CEQA Guidelines Section 15162(a)(3). No additional analysis is required based on the discussions throughout this addendum.

The proposed Density Bonus Ordinance Update would not involve development in areas not assumed for development in the EIR certified for the 2040 General Plan in 2014, nor would it result in population growth and density beyond what was analyzed in the 2040 General Plan EIR. The project would not result in significant or substantially more severe impacts that were not discussed in the 2040 General Plan EIR. Also, there are no previously identified significant effects which, as a result of substantial new information that was not known at the time of the previous environmental review, would be substantially more severe than discussed in the 2040 General Plan EIR.

Accordingly, no additional CEQA review is required.

State CEQA Guidelines Section 15164 states that “[t]he lead agency or a responsible agency shall prepare an addendum to a previously certified EIR if some changes or additions are necessary but none of the conditions described in Section 15162 calling for preparation of a subsequent EIR have occurred.” An addendum is therefore appropriate because, as explained above, none of the conditions calling for preparation of a subsequent EIR have occurred.

City of Hayward
Density Bonus Ordinance Update

26 7 References

7.1 Bibliography
California Department of Forestry & Fire Protection (CAL FIRE) Fire and Resource Assessment Program. 2022. Fire Hazard Severity Zone Viewer. https://egis.fire.ca.gov/FHSZ/ (accessed November 2022).

7.2 List of Preparers
Rincon Consultants, Inc. prepared this addendum under contract to the City of Hayward. Persons involved in data gathering, analysis, project management, and quality control include the following:

Rincon Consultants, Inc.

Abe Leider, AICP CEP, Principal-in-Charge
Jerry Hittleman, Project Manager
Amber McEldowney, Environmental Planner

ATTACHMENT V

RECOMMENDATIONS THAT ARE NOT PART OF THE DENSITY BONUS UPDATE

Project Amenities
Recommendation: Consider Density Bonus for project that provide certain project amenities, such as public art, dog parks, open space, etc.

Staff Response: While the Council and Planning Commission suggested that providing amenities such as dog parks, public art, and recreation/open space could qualify a project to eligible for a density bonus, amenities such as these increase the cost of projects. One option to provide broader flexibility with the development standards and incentivize the incorporation on-site amenities could be to have applicants apply for Planned Development zoning (PD) and/or a General Plan
Amendment. Most PD rezonings are applied for when the project is seeking additional flexibility on adopted development standards and these features could be considered as a public benefit when a PD application is submitted.

On-Site Affordable Units
Recommendation: Require affordable housing units to be provided on-site.

Staff Response: While the updated Density Bonus Ordinance will help support and incentivize the construction of on-site affordable units, the requirements to provide those affordable units on-site is currently under review as part of an update to the City’s Affordable Housing Ordinance (AHO). Staff expects a draft of the updated AHO to be completed in early 2023.

Fee Assessment
Recommendation: Look at fees on a square footage basis rather than a per unit basis.

Staff Response: While the Density Bonus Ordinance does contain recommendations for fee waivers or deferrals, the assessment of impact fees or other permit fees are often tied to nexus studies, which will determine the appropriate amount of fees charged and is codified as part of the City’s Master Fee Schedule. While many development-related fees are based on square footage or per unit basis, the Density Bonus update will not determine how impact fees are assessed.

Property Transfer Tax
Recommendation: Increase Property Transfer Tax
Staff Response: The intent to the Density Bonus Ordinance is to either increase revenue or decrease development costs tied to affordable housing or housing tied to special needs populations. Property transfer taxes are not directly or indirectly tied to the Density Bonus Ordinance update.

Applicable Income Levels
Recommendation: Use Hayward income levels rather than area median income as a measure, since Hayward income is lower than Alameda County Staff Response: The State Density Bonus laws dictate the income levels/limits to be used for affordable housing.

Speculative Investments
Recommendation: Prevent speculative investment
Staff Response: Staff is currently exploring options tied to the Strategic Roadmap to preserve, protect, and produce housing.

Parking
Recommendation: No parking reduction and concerns about equity implications of not giving low-income units as much parking.

Staff Response: While the State already allows projects that qualify for a Density Bonus application to have a reduced parking ratio by right, the update to the Density Bonus Ordinance is not proposing any additional limitations or restrictions on project specific parking requirements.

Staff is currently working to develop Objective Standards and as part of that project, parking regulations will be studied.

Displacement
Recommendation: Make sure residents are not displaced
Staff Response: Recently adopted SB330 legislation requires any housing units demolished that were occupied by protected tenants be replaced and additionally, the city has adopted a tenant assistance ordinance to provide tenant relocation assistance in the event they are displaced due to no-fault eviction or temporarily displaced due to renovations.

Project Financing
Recommendation: Banks may not lend to market rate buyers purchasing in a building with subsidized units
Staff Response: The City does not have the authority to regulate financial institutions but there are existing federal programs and lending criteria that allow for financing approval for restricted units.

ATTACHMENT VI

STAKEHOLDER INTERVIEW COMMENTS
Market-Rate Developers:

Challenges:
- City’s mixed use ordinance requirements are difficult to meet and, in some cases, has led a project/deal to fall through. Difficult to finance commercial component – specifically, commercial size requirement.
- Developer expressed that there isn’t a lot of land that is available and buildable:
o For student housing, it’s difficult to find sites due to CSU requirement (master lease and project site must be within 1 mile from university). o Considered areas of “downtown” but turned away due to high environmental review/clean-up costs.
- Mixed-use projects are desirable but very difficult to finance due to the layering of funding and regulatory requirements from various funding sources/programs.

Suggestions:
- Reduce commercial size requirement(s) in mixed-use ordinance. - Establish case manager in CMO to facilitate expedited review for projects. Example provided – SJ and LA.
o Example shared about SJ – Project successfully expedited and streamlined entitlement through a program like such and the city had environmental review completed for project site/area. Also, city waived affordable fees estimating at $4M.

Affordable/Non-Profit Developers:

Challenges:
- High impact fees – Affordable developers get specific impact fees waived but further waiving fees related to entitlement would be helpful and reduce overall development cost.
- Adapting to changing development requirements. Difficult for developers to adapt – logistics and budget.
- NIMBY-ism/community opposition.
- Public art requirement can pose challenges related to prevailing wages/D. Bacon. - Open space and parking requirements are challenging – budget and project site size.

Suggestions:
- Reduce, waive, or defer payment of impact fees/city fees. o Example shared about Fremont – City deferred fees for developer to pay fee after project closing via agreement between City and developer. Estimated fee that was deferred - $2M.
- Be mindful of economy of scale – Although there are incentives for including deeper affordability and denser buildings, projects need to be financially feasible, and developer needs to have appropriate capacity to carry on project at large scale. - Provide clear confirmation of requirements up front and the timing associate with the requirement.
- Waive open space and parking requirements.

1 PLANNING COMMISSION MEETING

COUNCIL CHAMBERS AND VIRTUAL (ZOOM)

PARTICIPATION
Thursday, November 10, 2022, 7:00 p.m.

The Planning Commission meeting was called to order at 7:00 p.m. by Chair Ali-Sullivan. The Planning Commission held a hybrid meeting in the Council Chambers and virtually via Zoom.

PLEDGE OF ALLEGIANCE

ROLL CALL

Present: COMMISSIONERS: Bonilla Jr., Goldstein, Lowe, Roche CHAIRPERSON: Ali-Sullivan

Absent: COMMISSIONER: Stevens
CHAIRPERSON: Oquenda

Staff Members Present: Madhukansh, Morales, Ochinero, Schmidt, Tabari, Thompson, Vigilia

PUBLIC COMMENTS

There were none.

WORK SESSION

1. Proposal Bonus Update: Review and Discuss Updates to the City’s Density Bonus Ordinance for Compliance with State Density Bonus Laws (WS 22-035)

Senior Planner Thompson provided a synopsis of the staff report.

Commissioner Goldstein asked staff if 55 per cent for very low-income was the proposed Hayward maximum density and if special groups were also to be targeted. He also asked if a developer was allowed a 60 percent density bonus for a ten-unit project, then they would be permitted to build an additional six units. Senior Planner Thom pson confirmed t his was correct.

Commissioner Goldstein commented that the proposed recommendations were very generous compared to the State’s incentives. He wanted to understand if staff received any feedback on the proposal from developers. Ms. Thompson mentioned a survey and interviews w ere conducted with developers sharing three developers participated in this process.

Commissioner Goldstein indicated that in previous conversation s with develope rs, some responses received were that developers could build higher projects, but this would not come to fruition due to increased costs. Senior Planner Thompson sha red that developers provided feedback on methods to incenti vize greater production of affordable housing

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units within the city , including providing feedback f or the proposed ordinance which comprises of incentives, concessions, and greater density bonus.

With regards to financial incentives, fee waivers, and fee deferrals, Commissioner Goldstein encouraged staff to consult with the Hayward Area Recreation and Park District (HARD) Board on the proposed reduction of the park in-lieu fees due to the potential impact it may have. He commented that many times developers proposed to dedicate space to be used for a park , however these typically did not have a maintenance fund and that this should be considered. Mr. Goldstein noted that the city was struggling to modernize its existing infrastructure and suggested that staff consider what neighborhoods were being developed and whether a utility fee deferral would be feasible.

Commissioner Roche appreciated staf f’s recommendation with streamlining the process as this will guid e developers . She agreed with Commissioner Goldstein ’s comment s on p ark in-lieu fees and consulting with HARD, and underscored the importance of providing green space for p eople to enjoy the outdoors when building high density projects. Ms. Roche shared that many residents were concerned about traffic impacts result ing from construction al ong Mission Boulevard and emphasized the need for resources to he lp manage traffic as additional housing projects are constructed.

Commissioner Lowe asked what policies and provisions were in place to ensure equity when the City considers waiving a fee or issuing a deferral . Ms. Thompson stated that equity provisions were a policy consideration and staff would forward that question to the City Council for consideration.

Commissioner Lowe asked what problems and concerns were experienced by other cities when administering fee waivers or deferrals. Housing Division Manager Morales stated standard criteria would be established for individual projects rather than who was requesting thereby setting specific terms. In order to ensure compliance, Ms. Morales shared the fees would be memorialized in agreements that would be recorded to the title of the property. In terms of deferr als, the fee payments would differ until the units were placed in service and would be short -term deferrals. With regards to the park in-lieu fees, Ms. Morales clarified that the ability to waive the fees for 100 percent affordable housing projects already existed under the ordinance. Ms. Morales added that staff worked with HARD to allow specified reductions in park fees for units that comply w ith on -site affordable housing to incentivize developers.

Commissioner Lowe noted that when develo pers were asked to complete the survey, the response was that mixed -use was difficult due to ch allenges with the size and get ting financing of commercial spaces . She asked staff if the City’s requirements for mixed-use developments were similar to other cities of the same size. She wanted to ensure that an

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updated ordinance would allow Hayward to be competitive in th e development of affordable housing.

Senior Planner Hittleman with Rincon Consultants shared that other cities that have gone beyond State law have helped incentivize more affordable housing growth in their communities, commenting that both mixed -use and residential developments have been successful.

Commissioner Lowe stressed that updates to the ordinance should ensure that Hayward remain competitive with surrounding cities. Ms. Morales stated the proposed changes exceeded State law requirements and that this made the city more competitive than surrounding jur isdictions. She noted that the Affordable Housing Ordinance would be brought to the Planning Commission at a future meeting and that this would include comparisons of how much affor dable housing has been developed in comp arable jurisdictions, emphasizing that Hay ward has done well in developing affordable h ousing.

She stated that t his would provide incentives , additional tools and resources in making affordable housing more feasible. Mr. Hittleman adde d that the city would be drafting a user guide once the ordinance was adopted and that would be very beneficial to developers.

Chair Ali-Sullivan stated that it would be helpful to have comparisons with adjacent cities to benchmark what was proposed for Hayward compared to neighboring jurisdictions.

Commissioner Bonilla Jr. expressed that he was proud as he found the proposal to be very responsive to the comments made by the Planning Commission underscoring th at the proposed plan incentivized affordable housing in the city. He mentioned that Hayward was being recognized across the Alameda County as a leader in affordable housing production.

Mr. Bonilla Jr. stated there had been a lot of previous discussion about incentives the city should provide to build more affordable housing and the proposed changes reflected these incentives. He wanted to understand how the city planned to ensure that onsite affordable housing would be built, but he understood that information would come at a later time. He appreciated the flexib ility proposed in the ordinance and the ability to adjust to the community’s needs, speaking favorably of the targeted special populations component of the plan. Mr. Bonilla Jr. found the plan to be very responsive to the regional needs for housing and emphasized that it prov ided a plan to ensure equitable housing. He appreciated Commissioner Lowe’s comments with respect to equitability and staff’s response to establish criteria.

Chair Ali-Sullivan echoed Commissioner Bonilla Jr.’s comments about the proposed changes being responsive to the Planning Commission’s comments about affordable housing. He asked what the current State maximum density was and how it compared to the proposal. Senior

4 PLANNING COMMISSION MEETING

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Thursday, November 10, 2022, 7:00 p.m.

Planner Thompson explained that currently the city was operating at the Stat e's maximum density of 50 percent for very -low-income, low -income and moder ate-income; however, the proposal was to exceed the State’s maximum and increase it to 55 percent.

Chair Ali-Sullivan asked staff what would happen if a developer wanted all the concessions in the City’s Density Bonus Ordinance. Ms. Thompson responded that if a project was eligible for a Density Bonus, that project was eligible for the maximum density and specified number of concessions with unlimited waivers if the developer chose to pursue it.

Chair Ali-Sullivan commented that there was no in centive for a developer to provide very low-income units when they would receive the same Density Bonus for moderate income units. He noted there was a need in the community for more very -low-income units.

Housing Division Man ager Morales responded that based on the high percentage of moderate-income units required relative to the number of very-low-income units required, staff observations for lower -tier density bonus w ere that d evelopers were choosing to provide fewer units of very-low-income units rather than to try to get a higher number of on-site inclusionary for moderate income units in order to receive the first ince ntive. Staff shifted the focus to get developers to get to the second incentive and to provide m ore on- site affordable housing. She exemplified that if the mar ket rate price for a unit was $1 million, then the restricted resell price would be approximately $500,000 , which was a large price differential for developers to se ll 44% of units at the moderate -income level price versus having 15% of very low-income units. Ms. Morales stated that it also depended on the economics of the project, but there are evident cases of very low-income units being incentivized and that staff was pleased to see that it was a priority of the Planning Commission to target this population as there was a need for more units at this price level.

With regards to Regional Housing Needs Assess ment ( RHNA) numbers, Commissioner Lowe inquired if this was the reason why the city was lacking in moderate-income units.

Housing Division Manager Morales noted that th ere were two mechanisms to create moderate-income units which were t he on -site inc lusionary agreement and the second mechanism was being able to count accessory dwelling units (ADUs) that are deve loped, noting these were naturally occurring moderate-income units. For low and ver y low - income-units, she indicated that 100 percent affordable housing projects can be included and subsidized with Housing In clusionary Funds. This enables the creation of un its faster than having a small er incremental percent of un its being proposed under the Inclusionary Ordinance. She added that there was not a lot of public financing available to subsidize moderate-income ownership units which made it challenging for developers t o create these units.

Commissioner Bonilla Jr . understood the way the city would increase units in specific categories was to adjust th e proposed plan accordingly and Ms. Morales agreed. She

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explained the reason mixed -income was general was to encourage a more mixed -income community.

Commissioner Bonilla Jr. stated that the way to deeply incentivize specific income -based units was to pro vide more incentives for those units. Ms. Morales concurred that was correct and responded that staff would ensure the ordinance was and that mixed income meant a mixture of market rate and affordable units.

Commissioner Goldstein mentioned the city ha d not established a formula on how to measure parking for new developments and that placed the city at a disadvantage relative to State law. Principal Planner Schmidt stated t he city had existing off -street parking regulations and pointed out that the state density bonus superseded the city’s regulations.

She noted that d ensity bonus projects were subject to different parking standards already outlined in State law. In response to Commis sioner Goldstein ’s question about o bjective parking stand ards, Ms. Sc hmidt stated that future discussions on the City ’s Objecti ve Parking Standards would be considered in ea rly 2023 and that th is would be f or projects not seeking a density bonus.

Chair Ali-Sullivan opened the public hearing at 7:57 p.m.

Mr. Gabriel Altamirano with South Hayward Now/Ahora, participated via Zoom, stated the objective of the organization was to have a voice for environmental justice. He expressed that the City was known f or issuing Mitigated Negative Declaration for projects that cause extreme effects on traffic and that his organization would monitor this . As projects come before the city, the group will focus its efforts on reducing tr affic and advocate for proper California Environmental Quality Act (CEQA) review for parking. He encouraged the Planning Commission to continue to focus on low and very-low-income housing.

Ms. Ro Aguilar , Zoom participant, acknowledged the City’s effort s to build more affordable housing in Hayward ; however, she wanted the focus to remain on inclusionary affordable housing. She stated the control and responsib ility to build inclusionary affordable housing was still in the hands of the developer with the propo sed ordinance revisions. She commented whether exceeding the state requirements was necessary and mentioned that the city had not tried requiring developers to build inclusionary affordable housing. Ms.

Aguilar stated no matter how many incentives, waivers , or concessions the city offered, the voluntary approval may not work due to neighborhood political opposition or due to business desired profit margins. She emphasized th at action be taken demonst rating that the city was serious about inclusionary a ffordable housing and work towards repairing damage done by discriminatory housing codes.

Chair Ali-Sullivan closed the public hearing at 8:04 p.m.

6 PLANNING COMMISSION MEETING

COUNCIL CHAMBERS AND VIRTUAL (ZOOM)

PARTICIPATION
Thursday, November 10, 2022, 7:00 p.m.

APPROVAL OF MINUTES

2. Minutes of the Planning Commission Meeting of October 27, 2022

A motion was made by Commissioner Lowe, seconded by Commissioner Goldstein, to approve the meeting minutes of October 27, 2022.

The motion passed with the following roll call votes:

AYES: Chair Ali-Sullivan
Commissioners Bonilla Jr., Goldstein, Lowe, Roche
NOES: None
ABSENT: Chair Oquenda
Commissioner Stevens
ABSTAIN: None

COMMISSION REPORTS

Oral Report on Planning and Zoning Matters

Senior Planner Schmidt congratulated Commissioners Roche and Goldstein, acknowledging that while final votes were still being counted, but in the event that the Commissioners move to new appointments, she shared that a special recruitment would be held to fill the vacant Planning Commission positions. She indicated that the Affordable Housing Ordinance would be discussed a t the Decembe r 8, 2022 , meeting and noted th at the November 24, 2022 , meeting would be canceled due to the Thanksgiving holiday.

Commissioners’ Announcements, Referrals

Commissioner Bonilla Jr. congratulated Commissioners Roche and Goldstein on the election and looked forward to their continued impact on the City of Hayward.

Commissioners Goldstein and Roche thanked staff for their efforts and earlier presentation.

Chair Ali-Sullivan thanked members of the public for attending the meeting. He thanked all candidates who ran for City Council and their commitments and desire to serve Hayward. He commented that while the certification of election of results was pending, it was evident that some Planning Commissioners may be joining the Ci ty C ouncil and congratulated Commissioners Roche and Goldstein for their h ard work and desire to serve on the City Council.

7 PLANNING COMMISSION MEETING

COUNCIL CHAMBERS AND VIRTUAL (ZOOM)

PARTICIPATION
Thursday, November 10, 2022, 7:00 p.m.

ADJOURNMENT

Chair Ali-Sullivan adjourned the meeting at 8:09 p.m.

APPROVED:

______________________________________________________
Briggitte Lowe, Secretary
Planning Commission

ATTEST:

___________________________________________________
Avinta Madhukansh-Singh
Interim Planning Commission Secretary
Office of the City Clerk

CITY OF HAYWARD
Hayward City Hall
777 B Street
Hayward, CA 94541
www.Hayward-CA.gov
File #: RPT 22-111
DATE: December 6, 2022
TO: Mayor and City Council
FROM: Assistant City Manager/Development Services Director

SUBJECT
Smoke-Free Multi-Family Housing: Proposed Timeline for Updated Regulations

RECOMMENDATION
That Council reviews this informational report regarding the proposed schedule for evaluating and potentially adopting regulations regarding smoking within multi-family residential developments and makes any adjustments to the proposed timeline as the next three-year Strategic Roadmap is developed.

SUMMARY
The City has adopted ordinances and codes regulating smoking in many public places; however, the regulations specifically exempt private residences. The community has reached out to Council and staff requesting that the City take action immediately to regulate smoking in residential areas as well, specifically multi-family complexes. While staff recommends working to implement these regulations, it is important to schedule and prioritize this project within the context of the existing workload consistent with the projects already designated in the Strategic Roadmap. Based on review of the existing Strategic Roadmap and available staff resources, staff proposes completing this effort as a year one project in the next three-year Strategic Roadmap that commences in fiscal year 2023-24.

ATTACHMENTS
Attachment I Staff Report
CITY OF HAYWARD Printed on 12/2/2022Page 1 of 1
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DATE: December 6, 2022

TO: Mayor and City Council

FROM: Assistant City Manager/Development Services Director

SUBJECT: Smoke-Free Multi-Family Housing: Proposed Timeline for Updated Regulations

RECOMMENDATION

That Council reviews this informational report regarding the proposed schedule for evaluating and potentially adopting regulations regarding smoking within multi-family residential developments and makes any adjustments to the proposed timeline as the next three-year Strategic Roadmap is developed.

SUMMARY

The City has adopted ordinances and codes regulating smoking in many public places; however, the regulations specifically exempt private residences. The community has reached out to Council and staff requesting that the City take action immediately to regulate smoking in residential areas as well, specifically multi-family complexes. While staff recommends working to implement these regulations, it is important to schedule and prioritize this project within the context of the existing workload consistent with the projects already designated in the Strategic Roadmap. Based on review of the existing Strategic Roadmap and available staff resources, staff proposes completing this effort as a year one project in the next three-year Strategic Roadmap that commences in fiscal year 2023-24.

BACKGROUND

The City of Hayward has adopted numerous regulations addressing smoking within the City.

Specifically, Hayward Municipal Code Chapter 5, Article 6 aims to provide for the public health, safety, and welfare by discouraging the inherently dangerous behavior of tobacco and cannabis use around non -tobacco and non -cannabis users; by protecting chil dren from exposure to smoking tobacco and cannabis while they play; by reducing the potential for children to associate smoking tobacco and cannabis with a healthy lifestyle; by protecting the public from smoking tobacco -related and cannabis -related litter and pollution; and by affirming and promoting the family atmosphere of the City's public places. While this section of the Municipal Code speaks to smoking in public places primarily, it specifically exempts private residences.

Recently, representativ es from La Familia , as well as individual tenants in multi -family complexes within the City have outreached to the City raising concerns regarding the City’s lack of regulations pertaining to smoking within these complexes. Based on this feedback, Council requested staff review and a timeline for addressing the issue.

DISCUSSION

As discussed above, Chapter 5, Article 6 of the Hayward Municipal Code does address smoking, however, the regulations currently exempt private residences. In doing some preliminary research, the greatest concerns relate to smoking in multi-family residential complexes as opposed to single family residential units. As part of any new change in policy or direction, staff recommends that the City outreach to the community and affected parties and provide an opportunity for input prior to final Council action. Given existing priorities (i.e., Housing Element, EnerGov implementation, Vacant Building Ordinance implementation, Density Bonus, Residential Objective Design Standards, Sidewalk Vendor, Community Preservation, and Alcohol Regulations) and competing staff resources, staff recommends that this project be added to the next three-year Strategic Roadmap as a year one priority project.

The below schedule reflects staff’s recommended timeframe for completion:

Task Timeframe
Community Outreach (web page,
community survey, listening sessions, etc.)
July 2023-September 2023
Develop Draft Regulations September-October 2023
Work Sessions October-November 2023
Final Regulations January 2024

Staff is committed to making this project a priority year one project in the next Strategic Roadmap. Alternatively, staff could begin outreach earlier, but would need to modify the anticipated timing for other priority efforts, namely the Community Preservation Ordinance.

ECONOMIC IMPACT

The economic impacts of adopting such regulations is unknown, but would be evaluated as part of the future project.

STRATEGIC ROADMAP

Establishing regulations to regulate smoking within multi-family residential developments is not currently a project in the adopted Strategic Roadmap. Given interest on the part of community members as well as Council, staff would recommend it be added as a year one project in the next three-year Strategic Roadmap under Support Quality of Life.

FISCAL IMPACT

The fiscal impacts of adopting such regulations are unknown, but would be evaluated as part of the future project.

SUSTAINABILITY FEATURES

There are no sustainability features associated with evaluating and adopting regulations regarding smoke-free multi-family housing.

PUBLIC CONTACT

There was no public outreach as part of developing the proposed project schedule. There will however, be outreach associated with the project itself including, but not limited to outreach with both residents and owners of multi-family properties anticipated for 2023.

NEXT STEPS

Staff proposes discussing this project with Council as part of the next three-year Strategic Roadmap priority setting process and begin outreach in the first half of fiscal year 2023.

Prepared by: Sara Buizer, AICP, Deputy Director of Development Services

Recommended by: Jennifer Ott, Assistant City Manager/Development Services Director

Approved by:

_________________________________
Kelly McAdoo, City Manager

CITY OF HAYWARD
Hayward City Hall
777 B Street
Hayward, CA 94541
www.Hayward-CA.gov
File #: RPT 22-113
DATE: December 6, 2022
TO: Mayor and City Council
FROM: Councilmembers Andrews and Wahab

SUBJECT
City Council Referral: Hayward Family Resource Center

RECOMMENDATION
That Council reviews the attached Council referral memo and provides direction to staff...End

SUMMARY
A formal Council referral was received from Councilmembers Andrews and Wahab in November 2022 based on interest to explore the development of a Family Resource Center in Hayward. The referral requests that staff study and create a Family Resource Center for Hayward residents and consider integration of this plan into the Hayward Stack Center.

Given the work that has already been completed related to the development of the Stack Center in South Hayward, staff recommends that this discussion topic be referred to the Governance Group for the Stack Center for further research and follow up policy discussion.

ATTACHMENTS
Attachment I Council Referral Memo
CITY OF HAYWARD Printed on 12/2/2022Page 1 of 1
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COUNCIL POLICY REFERRAL MEMORANDUM

To: Hayward Mayor and City Council
From: Council Members Aisha Wahab & Angela Andrews
Subject: Hayward Family Resource Center
Date: 12/13/22

Background:

As the City of Hayward develops the Stack Center and other efforts to service the needs of our residents, family resources need to be considered as a permanent effort as the City of Hayward is seeing increased housing, population growth, economic stability and more. The most vulnerable community members must continue to be prioritized, met with compassion and resources where they are, and easily supported with the vast amount of resources available.

Cities across the Bay Area and United States have Family Resource Centers that range from direct services, partnerships with service providers, and a community resource center.

Below is a list of suggested policy proposals that should be evaluated and discussed further:

1. Direct staff to study and create a Family Resource Center for Hayward Residents.

2. Integrate this plan to potentially be consolidated into the Hayward Stack Center

3. Focus on: Housing, Legal Services, Food Security, & Basic Needs

4. Create a consolidated Hayward Non-Profit Collaboration Network, in collaboration with County Resources, and State Resources.

5. Ensure resources are equitably advertised, provided, and ensured.

Timeline: FY2023

_________________________ _________________________
Aisha Wahab Angela Andrews
Hayward City Council Member Hayward City Council Member

References:
● California: https://californiafamilyresource.org/
● Fremont: https://www.fremont.gov/government/departments/human-services/fremont-family-resource- center
● Union City: https://www.unioncityfamilycenter.org/
● San Francisco: https://www.first5sf.org/family-resource-centers/