CITY OF MERCED
ADMINISTRATIVE REPORT
Merced Civic Center
678 W. 18th Street
Merced, CA 95340
File #: 21-956 Meeting Date: 12/8/2021
Planning Commission Staff Report
Report Prepared by: Julie Nelson, Senior Planner, Development Services Department SUBJECT: Density Bonus #21-01, initiated by UP Holdings, LLC, on behalf of the Stan Short Trust, property owner. This application involves a request to consider Density Bonus #21-01 which permits an increase in density and provides for concessions to development standards to allow the construction of 65 affordable permanent supportive housing units, a manager’s unit, and a community/office area within a three-story building on a 1.54-arce parcel, generally located on the west side of Park Avenue, between Olive Avenue and Alexander Avenue. The site has a General Plan Designation of High-Medium Density (HMD) Residential and a Zoning designation of Planned Development (P-D) #4.
ACTION: PLANNING COMMISSION:
Recommendation to City Council
1) Environmental Review #21-43 (Categorical Exemption)
2) Density Bonus Application #21-01
CITY COUNCIL:
Approve/Disapprove/Modify
1) Environmental Review #21-43 (Categorical Exemption)
2) Density Bonus Application #21-01
SUMMARY
This is a request to consider Density Bonus #21-01 which permits an increase in density and provides for concessions and waivers of development standards to allow the construction of 65 affordable permanent supportive housing units, a manager’s unit, and a community/office area within a three-story building on a 1.54-arce parcel, generally located on the west side of Park Avenue, between Olive Avenue and Alexander Avenue. Staff is recommending the Planning Commission recommend approval to the City Council. No public hearing is required per state statues or local ordinances.
RECOMMENDATION
Planning staff recommends that the Planning Commission recommend approval to the City Council of Environmental Review #21-43 (Categorical Exemption) and Density Bonus #21-01 (including the adoption of the Draft Resolution at Attachment A) subject to the findings/considerations in Exhibit A of CITY OF MERCED Printed on 12/1/2021Page 1 of 6
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1 ATTACHMENT 9
File #:21-956 Meeting Date: 12/8/2021
adoption of the Draft Resolution at Attachment A) subject to the findings/considerations in Exhibit A of the Draft Resolution.
DISCUSSION
The California State Density Bonus Law (SDBL) was adopted in 1976 in recognition of California’s acute and growing affordable housing needs. The SDBL has been amended multiple times since adoption in response to evolving housing conditions, to provide clarification on the legislation, to respond to legal and implementation challenges, and to incorporate new or expanded provisions. The SDBL, as originally enacted, sought to address the affordable housing shortage by encouraging development of low- and moderate-income units; over time, the law was expanded to recognize the need for housing for households at a wider range of income levels and with specialized needs.
The SDBL incentivizes affordable and other specialized housing production by requiring local agencies to grant an increase to the maximum allowable residential density for eligible projects, and to support the development of eligible projects at greater residential densities by granting incentives, concessions, waivers, or reductions to applicable development regulations. An example of a concession or incentive is a reduction in the number of parking spaces that may be required for a project, or an increase in the allowable building height that applies to the project. The SDBL applies to projects providing five or more residential units, including mixed-use developments. Density bonuses and associated incentives, concessions, waivers, or reductions are intended to offset the financial burden of constructing affordable or specialized units.
The City of Merced originally adopted a local Density Bonus Ordinance in 1993 and amended it in 2016 (included in Zoning Ordinance Chapter 20.56) to comply with State law at the time the ordinances were adopted. Several updates to SDBL have occurred since the Zoning Ordinance was adopted in 2016 and the City’slocal Ordinance is currently inconsistent with State law. However, the City is committed to complying with State law and will be updating our local ordinance in the future.
To provide additional information and a more in-depth overview of the SDBL, the document entitled Guide to the California Density Bonus Law, prepared by Jon Goetz and Tom Sakai of the Meyers- Nave Law Firm, is provided at Attachment B.
One of the basic elements of this law is that a development that meets the requirements of the state law is entitled to receive the density bonus to increase the density of a project by right. This means that no discretionary review is required to allow an increase in the density of a project. The requested density is allowed to exceed the density established by the General Plan and/or Zoning.
The City may require an agreement to memorialize the affordability component of the development or any other incentives given to assist the project.
The proposed project would provide permanent supportive housing to tenants whose income is less than 30% of the Area Median Income (AMI). The Area Median Income for 2021 in Merced County is $70,700. The table below shows the income limits for the different income levels:
No. of Persons
in Household
1 2 3 4 5 6 7 8
Extremely Low
Income
$14,700 $17,420 $21,960 $26,500 $31,040 $35,580 $40,120 $44,660 Very Low
Income
$24,500 $28,000 $31,500 $34,950 $37,750 $40,550 $43,350 $46,150 Low Income $39,150 $44,750 $50,350 $55,900 $60,400 $64,850 $69,350 $73,800 Median Income $49,500 $56,550 $64,650 $70,700 $76,350 $82,000 $87,650 $93,300 Moderate
Income
$59,400 $67,900 $76,350 $84,850 $91,650 $98,450 $105,200 $112,000 CITY OF MERCED Printed on 12/1/2021Page 2 of 6
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2 File #:21-956 Meeting Date: 12/8/2021No. of Persons
in Household
1 2 3 4 5 6 7 8
Extremely Low
Income
$14,700$17,420$21,960$26,500$31,040$35,580$40,120$44,660 Very Low
Income
$24,500$28,000$31,500$34,950$37,750$40,550$43,350$46,150 Low Income $39,150$44,750$50,350$55,900$60,400$64,850$69,350$73,800 Median Income$49,500$56,550$64,650$70,700$76,350$82,000$87,650$93,300 Moderate
Income
$59,400$67,900$76,350$84,850$91,650$98,450$105,200$112,000 As part of the process for a Density Bonus, the developer/property owner will enter into an agreement specifying the length of time the units will be kept affordable. This agreement will be recorded and will remain in effect for the term of the agreement. The developer is proposing to keep the units affordable for a term of 55 years. The agreement will be presented to the City Council for approval and execution.
Specific Findings for a Density Bonus are required by Section 20.56 of the City’sZoning Ordinance.
Those Findings are provided at Exhibit A of Draft Planning Commission Resolution #4081 (Attachment A of Planning Commission Staff Report #21-956). Additional information regarding the State Density Bonus Law is provided in Finding A of Draft Planning Commission Resolution #4081. It should be noted that the City may not add conditions to any Density Bonus approval.
Project Description
The proposed project is located on the west side of Park Avenue, between Olive Avenue and Alexander Avenue (refer to the location map at Attachment C of Planning Commission Staff Report #21-956). The project would allow the construction of 65 affordable permanent supportive apartment units, an on-site manager’sunit, and a community/office area within a three-story building as shown on the site plan at Attachment D of Planning Commission Staff Report #21-956. The 65 units would be 1 bedroom, 1 bathroom units. The on-site manager’sunit would be a 2-bedroom unit. All the permanent supportive units would be income restricted for 55 years to tenants whose income does not exceed 30% of the area median income. Permanent Supportive Housing is defined by California legislation as an evidence-based housing intervention that combines on-going rental assistance with supportive services such as health and mental health care for chronically homeless households.
The site is located within P-D #4 and has a Site Utilization Plan designation of multi-family. P-D #4 does not provide design/development standards for multi-family units. Therefore, staff would rely on the design standards of the zoning district that corresponds to the General Plan designation. In this case, the General Plan designation of High-Medium Density Residential corresponds to the R-3 zoning district. As such, the standards (setback, height, etc.) for the R-3 zoning district would apply. .
In order to provide the affordable housing units, the developer has requested a Density Bonus to allow a deviation from the allowed density and certain design standards. As previously described, Density Bonus law allows concessions, incentives, waivers, and reductions in order to allow for the construction of affordable housing. Based on the income level served by the proposed units, this project is eligible for 4 concessions or incentives (refer to Finding A of Draft Planning Commission Resolution #4081 on how the number of concessions are determined). In addition to those concessions or incentives, the City may not impose any development standard that would physically CITY OF MERCED Printed on 12/1/2021Page 3 of 6
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preclude the construction of the affordable housing units.
The table below shows the applicant’srequest and whether the request is considered a concession, incentive, waiver, or reduction (refer to Finding A of Planning Commission Resolution #4081 for information on the differences between each type of request). As previously mentioned, the project is eligible for 4 concessions. As shown in the table, the increase in density doesn’tcount towards the number of concessions allowed, three of the requests would be considered a concession and four requests are considered waivers from development standards.
Standard Requested Concessions/Incentives Type of Request Density An increase of 80% above the allowable
density. This would increase the
allowable number of units from 37 units
to 67 units. The project proposes 66
units.
Allowed by right, does
not count as a
concession
Parking Reduce the parking requirement from
107 spaces to 30 spaces.
Concession. Reduction
is greater than required
by state law.
Height Increase height from 35’ to 45’. The
number of units proposed would be
feasible without doing three-story
buildings at a height of 45 feet. The site
is small and would not accommodate the
proposed 66 units unless the buildings
are three-story.
Waiver
Setbacks Reduce exterior yard setback from 15’ to 10’
for a portion of the building and waive the
requirement for a 1:1 height and setback ratio
from an exterior property line as required by
Zoning Ordinance Section 20.46.040 (A)(1).
The angled shape of this lot allows a portion
of the building to meet the 15’ exterior yard
setback, but not the entire building. In order
to meet the 1:1 ratio, the number of units
would have to be reduced or the height
increased beyond 3 stories. This is not
feasible as it would add additional costs and
a 4-story building would be overly obtrusive
to the neighborhood.
Waiver
Lot Area per Unit Per the R-3-1. Standards, 1 unit is
allowed for each 1,500 square feet of lot
area, the proposal requests 1 unit for
every 1,260 square feet of lot area.
Waiver
Mechanical
Equipment
Allow roof-mounted mechanical equipment if
screened from public view. Roof-mounted
mechanical equipment is prohibited by
Zoning Ordinance Section 20.46.040 (A)(5a).
Allowing roof-mounted mechanical
equipment screened from public view allows
more space on the ground for this small
parcel. Placing mechanical equipment on the
ground takes up space that could be
otherwise used for open space or general
outdoor area. Additionally, the cost of a roof-
mounted HVAC unit is typically less because
the entire unit is on the roof. Ground-
mounted units require a portion of the unit to
be inside the living area. This not only takes
up space, but adds cost to the apartment
unit.
Concession
Safety and
Defensible Space
Allow more than 12 units to share an
entrance to the building. All 66 units will be
housed in the same building, but will have 3
distinctive wings with access into 2 of those
wings. Zoning Ordinance Section 20.46.030
(H) (2) requires the number of apartments
that enter their front door from the same
hallway or courtyard be limited to 12 (or as
otherwise approved by City staff) so that
residents can learn to distinguish fellow
neighbors from visitors and/or intruders.
Redesigning the project to meet this
requirement would add significant cost to the
project. Additionally, a design that meets this
requirement would add additional costs to the
project which would make it infeasible to
construct.
Concession
Private Outdoor
Space
Requests a reduction in size or elimination of
this requirement. Zoning Ordinance Section
20.46.030 (I) requires each unit to be
provided with a minimum private outdoor are
of 5’ x 8’ (40 sq. ft.) Because of the limited
size of the site and the number of affordable
units being provided, it may be difficult to
provide each unit with private outdoor space,
especially of this size. Additionally, this
standard adds significant cost to the project.
Waiver
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4 File #:21-956 Meeting Date: 12/8/2021
Standard Requested Concessions/Incentives Type of Request Density An increase of 80% above the allowable
density. This would increase the
allowable number of units from 37 units
to 67 units. The project proposes 66
units.
Allowed by right, does
not count as a
concession
Parking Reduce the parking requirement from
107 spaces to 30 spaces.
Concession. Reduction
is greater than required
by state law.
Height Increase height from 35’ to 45’. The
number of units proposed would be
feasible without doing three-story
buildings at a height of 45 feet. The site
is small and would not accommodate the
proposed 66 units unless the buildings
are three-story.
Waiver
Setbacks Reduce exterior yard setback from 15’ to 10’
for a portion of the building and waive the
requirement for a 1:1 height and setback ratio
from an exterior property line as required by
Zoning Ordinance Section 20.46.040 (A)(1).
The angled shape of this lot allows a portion
of the building to meet the 15’ exterior yard
setback, but not the entire building. In order
to meet the 1:1 ratio, the number of units
would have to be reduced or the height
increased beyond 3 stories. This is not
feasible as it would add additional costs and
a 4-story building would be overly obtrusive
to the neighborhood.
Waiver
Lot Area per UnitPer the R-3-1. Standards, 1 unit is
allowed for each 1,500 square feet of lot
area, the proposal requests 1 unit for
every 1,260 square feet of lot area.
Waiver
Mechanical
Equipment
Allow roof-mounted mechanical equipment if
screened from public view. Roof-mounted
mechanical equipment is prohibited by
Zoning Ordinance Section 20.46.040 (A)(5a).
Allowing roof-mounted mechanical
equipment screened from public view allows
more space on the ground for this small
parcel. Placing mechanical equipment on the
ground takes up space that could be
otherwise used for open space or general
outdoor area. Additionally, the cost of a roof-
mounted HVAC unit is typically less because
the entire unit is on the roof. Ground-
mounted units require a portion of the unit to
be inside the living area. This not only takes
up space, but adds cost to the apartment
unit.
Concession
Safety and
Defensible Space
Allow more than 12 units to share an
entrance to the building. All 66 units will be
housed in the same building, but will have 3
distinctive wings with access into 2 of those
wings. Zoning Ordinance Section 20.46.030
(H) (2) requires the number of apartments
that enter their front door from the same
hallway or courtyard be limited to 12 (or as
otherwise approved by City staff) so that
residents can learn to distinguish fellow
neighbors from visitors and/or intruders.
Redesigning the project to meet this
requirement would add significant cost to the
project. Additionally, a design that meets this
requirement would add additional costs to the
project which would make it infeasible to
construct.
Concession
Private Outdoor
Space
Requests a reduction in size or elimination of
this requirement. Zoning Ordinance Section
20.46.030 (I) requires each unit to be
provided with a minimum private outdoor are
of 5’ x 8’ (40 sq. ft.) Because of the limited
size of the site and the number of affordable
units being provided, it may be difficult to
provide each unit with private outdoor space,
especially of this size. Additionally, this
standard adds significant cost to the project.
Waiver
The project site is located on the west side of Park Avenue, between Olive Avenue and Alexander Avenue. The surrounding uses are all residential uses as shown on the location map at C and listed in the table below.
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