CITY OF SAN MATEO
City Council Special Meeting
January 18, 2022
5:30 PM
COUNCIL MEMBERS
Rick Bonilla, Mayor
Diane Papan, Deputy Mayor
Joe Goethals
Amourence Lee
Eric Rodriguez
AGENDA
DUE TO THE STATE OF CALIFORNIA’S DECLARATION OF EMERGENCY – THIS MEETING IS BEING HELD PURSUANT TO AUTHORIZATION FROM GOVERNMENT CODE 54943(b)(3) / AB 361 (2021) – CITY COUNCIL AND COMMISSION MEETINGS ARE NO LONGER OPEN TO IN-PERSON ATTENDANCE.
ANYONE CAN WATCH AND PROVIDE COMMENTS REMOTELY IN THE WAYS DESCRIBED AT THE END OF THE AGENDA.
To join via Zoom – click here: Tuesday, January 18, 2022 Zoom Meeting To join via telephone: (408) 638-0968
Conference ID: 896 4307 8251 Passcode: 640006
CALL TO ORDER
Roll Call
STUDY SESSION
The public will have an opportunity to comment during the consideration of these items.
1. Density Bonus Concessions and Residential Densities in Mixed-Use Projects – Policy Discussion Receive information on the use of state density bonus law concessions for height exceptions and residential densities in mixed-use development projects and provide staff with direction on next steps.
CLOSED SESSION
The public will have an opportunity to comment before the consideration of these items. Following the meeting a report of action from Closed Session will be provided if required.
2. Conference with Legal Counsel – Existing Litigation
(Paragraph (1) of subdivision (d) of Government Code Section 54956.9) Name of Case: Marcia A. Sklar et al. v. State, et al., San Mateo Superior Court Case No.: 19CIV03718
ADJOURNMENT
------------------------------------------------------------------------------------------------------------------------------------------ AGENDAS: Agendas and material are posted on the City’s website on the Friday preceding each Council Meeting and can be viewed on the City's website at www.cityofsanmateo.org . Any supplemental material distributed to the Council after the posting of the agenda will be made part of the official record.
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WATCHING A MEETING ON A COMPUTER: There are three ways to stream. 1) Public Meeting Portal www.cityofsanmateo.org/publicmeetings 2) City YouTube channel and stream it on YouTube: http://youtube.com/CityofSanMateo 3) Watch TV live stream: https://www.cityofsanmateo.org/193/Channel-San-Mateo-Live-Stream PUBLIC COMMENTS – Can be received in the following ways (Time limits will apply) :
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ACCESSIBILITY: In compliance with the Americans with Disabilities Act, those with disabilities requiring special accommodations to participate in this meeting may contact the City Clerk’s Office at (650) 522-7040 or [email protected]. Notification 48 hours prior to the meeting will enable the City to make reasonable arrangements to ensure accessibility to this meeting. 2 of 13
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CITY OF SAN MATEO
Agenda Report
City Hall
330 W. 20th Avenue
San Mateo CA 94403
www.cityofsanmateo.org
Agenda Number: 1 Section Name: STUDY SESSION File ID: 21-5628 TO: City Council
FROM: Drew Corbett, City Manager
PREPARED BY: Community Development Department
MEETING DATE: January 18, 2022
SUBJECT:
Density Bonus Concessions and Residential Densities in Mixed-Use Projects – Policy Discussion RECOMMENDATION:
Receive information on the use of state density bonus law concessions for height exceptions and residential densities in mixed-use development projects and provide staff with direction on next steps.
BACKGROUND:
On November 1, 2021, the City Council requested information on use of state density bonus law concessions and height exceptions for mixed-use development projects that include a residential component. This discussion was prompted by recent direction and guidance to developers from the Planning Commission during pre-application review to add more housing to their proposed projects in order to achieve an improved jobs-housing balance as new development projects are reviewed and approved.
The purpose of this study session is to provide information on the requested topics and receive input from the City Council on the following questions:
1. Height Concessions and use of state density bonus – Consistent with the state density bonus law, should the City investigate options for how to determine whether a requested concession or incentive, such as a height exception, achieves an actual and identifiable cost reduction to provide for affordable housing costs, and/or establish additional density bonuses, concessions, and waivers to incentivize projects to provide more housing?
2. Mixed-Use Projects – Apart from the state density bonus law, should the City establish a minimum density for mixed-use projects that have a residential component, or do something else to incentivize mixed-use projects to provide more housing?
Density Bonus and Height
The state density bonus law (California Government Code Sections 65915 – 65918) allow residential development projects that provide certain percentages of below market rate (BMR) housing units to receive density bonuses over and above a local jurisdictions’ maximum densities and receive concessions (aka incentives) and waivers1 for reductions in development standards such as setbacks, floor area ratio limitations, height limits, and parking requirements. The statute has been amended to provide that a developer need not seek a density bonus in order to request a concession or waiver. While the statute establishes minimum affordability requirements for density bonus concessions, a local agency has the discretion to further incentivize development. For example, this could be achieved by either lowering the threshold at which density 1 Projects that satisfy the requirements of the state density bonus law are entitled to one to four development incentives or concessions for reduced site development standards that result in “identifiable and actual cost reductions to provide for affordable housing costs”. Such projects can also qualify for unlimited number of waivers from development standards that could physically preclude project construction.
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bonuses or density bonus concessions are available2 or increasing the number of available concessions based on the amount of housing provided. The City’s current density bonus ordinance (Zoning Code Chapter 27.15) exceeds these minimum state requirements by determining that concession requests for reduced setbacks, increased maximum lot coverage and floor area ratios, and reduction in parking standards are deemed to not have any adverse public health and safety impact as long as the project remains consistent with the General Plan and applicable design requirements. Thus, requests for such concessions do not require additional documentation or justification from developers, other than a cost reduction analysis.
There are many recent examples of residential and mixed-use development projects that have been approved and built in the City that have provided BMR units while benefiting from density bonus provisions. Recent projects that have utilized state density bonus include Kiku Crossing, 303 Baldwin, Concar Passage, Bay Meadows Montara, Central Park South, and 1650 S. Delaware.
Since 1990, the City has had voter-approved initiatives in place (Measures H, P, and Y) that have limited building height (55 feet), residential density, and floor area for new development. Historically, developers have been able to exceed these limitations in certain areas of the City upon incorporating community benefits with project proposals. More recently, developers have requested concessions under state density bonus law to exceed the City’s height limit by including affordable units as part of their projects, instead of providing additional amenities or community benefits under the City’s Community Benefits Program3.
These height concession requests were reviewed by staff (including the City Attorney’s Office), and it was determined that the state density bonus law allowance for additional height through a concession would supersede any general plan or zoning limit, including those enacted by voter initiative (such as Measure Y). The state density bonus law provides that no development standard (including a height limit) can be applied that will have the effect of “physically precluding” the construction of a project with the density and concessions allowed by the statute. In order to obtain a concession, a developer must still demonstrate that the requested concession results in an “actual and identifiable cost reduction to provide affordable housing.”
Thus, a developer can potentially exceed the City’s height limit through use of a concession under state density bonus law (e.g., providing one affordable unit in a five-unit project with office/retail), without a commensurate community benefit. In some cases, a developer could also layer the community benefits height exception and density bonus concessions, resulting in building heights over 75 feet.
Given how state density bonus concessions can be utilized to exceed the City’s height limits, staff is seeking input from the Council on the following questions:
1. Consistent with state density bonus law, should the City investigate options for how to determine when height concessions result in “actual and identifiable cost reductions to provide for affordable housing costs” in order to create a more standardized and consistent process for new development?
2. Should the City consolidate the community benefits and the density bonus programs to provide a menu of options for the developer, such as:
a. Additional concessions (e.g., developers that propose housing beyond minimum mandates can qualify for additional concessions); and/or
b. Fast-tracking certain types of affordable housing projects. 2 State density bonus law currently defines a “housing development” which is eligible for a density bonus, concession, or waiver as any project including five or more residential units.
3 On March 15, 2021, the City Council adopted a Resolution to create an interim process for determining community benefits and public improvements including for projects providing affordable housing above the minimum inclusionary or density bonus requirement. A comprehensive and detailed community benefits program would be completed in conjunction with the 2040 General Plan Update.
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Minimum Density for Mixed Use Projects (Jobs-Housing Balance) The Planning Commission, as part of its review of recent development pre-applications, has encouraged applicants to include additional housing units in office and commercial projects as part of an overarching objective to create a better jobs-housing balance in the City. Typically, a jobs-housing balance in a jurisdiction is achieved at a programmatic level through adoption of citywide policies and implementing ordinances and other actions identified in the Housing Element or the General Plan. The City’s Housing Element, as required under state law, also identifies programs to meet the existing and projected housing needs for the City, including its fair share of the Regional Housing Needs Allocation (RHNA).
Existing City Housing Element Program H 2.12 encourages the development of mixed-use projects in existing commercial areas and adjacent to transit nodes, which can be accomplished through floor area and/or height bonuses for residential development in selected areas of the City by incorporating community benefits. The City has several office and commercial zones that allow for residential development and mixed-use projects, either by right or through a special use permit. It’s important to note that a significant number of projects over the last five years, located in commercial or mixed-use zones in the City, have voluntarily included a residential component to take advantage of concessions and waivers under the density bonus laws. However, the development community has provided input that streamlined processing times can incentivize more housing development. Staff is currently working on several streamlining efforts, which are described below. While the number of residential units in these projects varied widely, the resulting average residential density is approximately 48 units/acre (Attachment 2 – Commercial and Mixed-use Project List).
Currently, the City does not have an established minimum density or percentage of floor area requirement for the residential component in a mixed-use development. State Housing Element laws (Government Code Section 65583.2(h)) allow for very low and low-income housing to be accommodated on mixed-use sites when those sites allow for 100% residential uses and require 50% residential uses within mixed use projects. Given the overarching interest in facilitating the development of more housing, staff is seeking input from the Council on the following questions:
1. Should the City establish a minimum density or percentage of floor area requirement for mixed-use projects that have a residential component?
2. Should this effort be initiated in advance of adoption of the City’s updated Housing Element (beginning of 2023) or as an implementation item following adoption?
Other Efforts
In addition to the topics outlined above, staff is working to update and streamline the City’s development review and permitting processes for all development projects, including those that include housing. These efforts include:
1. Streamlining the pre-application process and shortening the timeline for large projects;
2. Conducting code amendments that would streamline minor public projects and modifications for approved projects;
3. Updating handouts and checklist materials, and establishing clearer procedures for development projects;
4. Conducting developer and homeowner informational outreach as procedures and processes are updated;
5. Exploring options to fast-track the permitting of accessory dwelling units (ADUs) and certain categories of affordable housing projects; and
6. Updating the CDD website for greater clarity, access to information, and ease of use.
NEXT STEPS:
A joint City Council/Planning Commission study session on the Housing Element Update is scheduled on February 7, 2022.
This study session is intended to present updated information on the City’s sites inventory and compliance with fair housing requirements, as well as facilitate a discussion on policies that should be included in the updated Housing Element. The topics included in this study session can also be brought back for further discussion and consideration based on the input provided by the Council. If more immediate policy action is desired, ahead of the Housing Element Update, staff will work on establishing a scope of work and timeline for further Council consideration. 5 of 13
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BUDGET IMPACT:
Depending on the nature of the Council’s direction, the costs associated with the research and development of the necessary code amendments and/or policies would be covered under the Community Development Department’s existing operating budget. However, if the direction results in the need to retain outside consultants to complete the work, the associated costs will require further evaluation to determine the appropriate funding source.
ENVIRONMENTAL DETERMINATION:
This study session is not a project subject to CEQA, because the City Council is providing direction to staff and is not taking action at this time. (Public Resources Code Section 21065.)
NOTICE PROVIDED
All meeting noticing requirements were met. A courtesy notice was included in the Planning Division biweekly e- newsletter to the community.
ATTACHMENTS
Att 1 – Interim Community Benefits Program Resolution
Att 2 - Commercial and Mixed-use Project List
STAFF CONTACT
Manira Sandhir, Planning Manager
[email protected]
650-522-7203
Zach Dahl, Community Development Deputy Director
[email protected]
650-522-7207
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CITY OF SAN MATEO
RESOLUTION NO. 27 ( 2021)
ADOPT INTERIM COMMUNITY BENEFITS PROGRAM
WHEREAS, property owners and applicants periodically request to enter into development agreements to vest their development entitlements for longer periods of time; WHEREAS, the Government Code Section 65865 authorizes cities to enter into development agreements with developers, and the City of San Mateo adopted development agreement procedures by resolution Resolution No. 120, 1990);
WHEREAS, property owners and applicants periodically request to exceed the City’ s standard height limit in certain areas of the City;
WHEREAS, there are several General Plan Land- Use Element policies that allow for increased height in exchange for community benefit/ public improvements in certain areas of the City; WHEREAS, longer entitlement vesting periods and increases in height limit increase the value of the development. In exchange for their development value increasing, an applicant must provide community benefits/ public improvements;
WHEREAS, developments vary in size, scope and geographical location, and therefore the value of a vesting period extension and height increase will vary by project; WHEREAS, the City Council finds that the monetary value of community benefits should be proportional to the increase in value associated with an extended vesting period or height increase; WHEREAS, an economic land use expert can estimate the monetary value of the extended vesting period and height increase,
WHEREAS, the City Council finds that an applicant must outreach to the immediate neighborhood as part of the required preliminary planning application process. During that outreach, the developer should seek feedback regarding community benefits;
WHEREAS, a list of potential community benefits is attached to this resolution. The City Council may update this list on a periodic basis;
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF SAN MATEO, CALIFORNIA, HEREBY RESOLVES that:
1. An economic land- use consultant should be hired by the City when an applicant requests to enter into a development agreement to extend the vesting period of their development or exceed the height limit.
This expert will confirm the appropriate monetary value of the proposed community benefits given the value of the extended vesting period or increased development standards.
DocuSign Envelope ID: AE56AD47- 597B- 412A- B1E6- 176E7D5D3B47 7 of 13
Resolution No. 27 ( 2021) Page 2 of 3
Interim Community Benefits Framework for Future Development Projects
2. Onsite and neighborhood- focused benefits should be prioritized during development negotiations. The specific improvements will vary by development, but in all cases, community input should help shape the community benefit package. A list is possible improvement is attached to this resolution.
3. This program shall be in effect for an interim period, until such time that the General Plan Update and related zoning code update is adopted. The General Plan and Zoning Code Update process will include extensive community outreach focused on community benefits, and will include adoption more detailed community benefits program;
4. In accordance with CEQA Guidelines Section 15061 ( b)( 3), adopting this interim program is not a project covered by CEQA, because the City Council is providing guidance and future development agreements and development projects will be analyzed independently under CEQA.
RESOLUTION NO. 27 ( 2021) adopted by the City Council of the City of San Mateo, California, at a regular meeting held on March 15, 2021, by the following vote of the City Council:
AYES: Council Members Rodriguez, Bonilla, Goethals, Lee and Papan NOES: None
ABSENT: None
ATTEST:
Patrice M. Olds, City Clerk Eric Rodriguez, Mayor
DocuSign Envelope ID: AE56AD47- 597B- 412A- B1E6- 176E7D5D3B47 8 of 13
Resolution No. 27 ( 2021) Page 3 of 3
Interim Community Benefits Framework for Future Development Projects Resolution Exhibit 1: List of Community Benefits and Public Improvements Transportation
Implementation of improvements identified in Traffic Action Plans ( TAPs) Infrastructure – curb, gutter, drainage, green infrastructure, trash capture, roadway, traffic signal upgrades, traffic signal interconnect/ communication network improvements nearby the project site ( beyond those normally provided via project nexus) Nearby bike and pedestrian improvements
Nearby pedestrian- scale lighting improvements
Nearby ADA right- of- way improvements
Contribution for last- mile transportation services ( i. e. shuttles) Payment toward traffic improvements above the required Transportation Impact Fee ( TIF) Contribution to public parking fund ( currently only available for projects within Central Parking Improvement District area, potential to collect funds to provide help provide public parking near train stations)
Housing
Additional affordable housing units above the inclusionary or density bonus requirement Acquisition of existing market rate housing units to convert into affordable Contribution towards City housing funds
Contribution of land for affordable housing
Parks/ Open Space
Contribution for park improvements
Contribution for recreation center improvements/ construction Contribution of land for public parks
Provide additional privately owned public open spaces ( POPOs) within project ( i. e. Linear Park at Bay Meadows I)
Other
Provide day care within project
Monetary contribution to the City
DocuSign Envelope ID: AE56AD47- 597B- 412A- B1E6- 176E7D5D3B47 9 of 13
City of San Mateo
Community Development Department
Planning Application or
Development Name Description
No. of
Dwelling
Units
% of Project
Residential
(approx)
Base Zoning Lot Size/
Acres
Dwelling
Units per
Acre
Hampton Inn & Suites
2946 S NORFOLK ST
Demolition of 166-room hotel.
Construct new 5-story, 182-room hotel
structure.
0 0%
C2-1: Commercial
that allows for
hotels
2.28 N/A
Franklin Offices SPAR
1 Franklin Parkway Franklin Templeton Offices Phase II - 0 0% BMSP: Office per
the Bay Meadows
Specific Plan
9.86 N/A
Westlake Facade Remodel &
Addition
520 S EL CAMINO REAL 100
Renovate exterior façade of an existing
9-story office building and add square
feet to the 2nd and 3rd floors at the
rear.
0 0%
C2-2, E2-2, R-6D:
Commercial, office
and DT residential
2.32 N/A
180 E. 3rd Ave
Demolish existing commercial building.
Construct new 3-story retail and office
building.
0 0%
CBD: Commercial,
office, DT
residential
0.16 N/A
21 Lodato Ave Triplex
Demolish existing single family
residence and construct three new,
detached townhomes. Special use
Permit
3 100% C2-1: Commercial 0.21 14
Mode Apartments
2089 PACIFIC BLVD
Conversion of eight (8) two-bedroom
units into 16 studio units for a net
increase of 8 units.
8 100% TOD: Mixed use 2.37 3
405 E. 4th Ave. Mixed Use Demo 2 historic structures. Construct 4- story mixed-use building 15 16% CBD-S: Commercial
and DT residential 0.51 30
Commercial & Mixed-Use Planning Approvals between January 1, 2017 and December 15, 2021 City Council Study Session
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Planning Application or
Development Name Description
No. of
Dwelling
Units
% of Project
Residential
(approx)
Base Zoning Lot Size/
Acres
Dwelling
Units per
Acre
406 E 3rd Ave. Mixed Use
SPAR + SDPA + Tentative
Parcel Map
Demo existing commercial buildings.
Construct new 4-story office and
residential building.
25 14% CBD-S: Commercial
and DT residential 0.88 28
1919 O’Farrell St. Apartments Demo existing office building. Construct new 5-story apartment building. 49 100% E1-1/R4:Office with residential overlay 0.71 69
303 Baldwin Ave
Demo existing grocery store. Construct
new 5-story mixed-use building with
commercial ground floor, and office and
residential uses above.
64 40%
C1-
2/R5:Commercial,
office with
residential overlay
0.93 68
Hillsdale Terraces Mixed Use
2700 S EL CAMINO REAL
Demo two commercial buildings.
Construct a 5-story mixed use
development.
67 80%
C3-1/R4:
Commercial with
residential overlay
1 67
Bay Meadows PhaseI SPAR
Modification Station 1 & 5
Office
2750 S DELAWARE ST
Modification of Station 1 office building
to increase office space, remove ground
floor commercial, and eliminate a
freestanding parking garage.
Modification of Station 5 office building
to increase the office space, reduce the
ground floor commercial space
0 0%
BMSP: Mixed use
per Bay Meadows
Specific Plan
5.39 N/A
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Planning Application or
Development Name Description
No. of
Dwelling
Units
% of Project
Residential
(approx)
Base Zoning Lot Size/
Acres
Dwelling
Units per
Acre
Bay Meadows Montara
2775 S Delaware St
Bay Meadows MU1 - BRIDGE Affordable
Housing. Construct 68 affordable
apartments
68 100%
BMSP: Mixed Use
per Bay Meadows
Specific Plan
1 68
1650 S. Delaware St
Apartments
Demo the existing office building.
Construct new 5-story 73-unit
residential apartment building
73 100% TOD: Mixed Use 1.07 68
Essex at Central Park
99-157 E. 5th Ave
Demo existing surface parking lot.
Construct 5-story mixed-use
development.
80 90%
CBD/R:
Commercial with
residential overlay
1.2 67
One 90
1, 2, 3 WATERS PARK DR
Demo of office campus. Construct new
190 for-sale units. Zoning
Reclassification (change from E1 to R3).
190 100% E1: Office 11.13 17
Kiku Crossing/ 5th Ave Garage
480 E 4TH AVE
225-unit affordable housing project and
public/private parking garage 225 53% CBD-S: Commercial and DT residential 2.41 93
Modification of Bay Meadows Phase II
SPAR MU2 Block - construct 4-story
office with ground floor active retail
uses along S. Delaware Street.
Modification of MU3 Block - construct 4-
story office with ground floor active
retail uses and 4-story, 67-unit
residential building.
Bay Meadows MU2 & MU3
SPAR Modification 67 15%
BMSP: Mixed Use
per Bay Meadows
Specific Plan
1.51 44
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Planning Application or
Development Name Description
No. of
Dwelling
Units
% of Project
Residential
(approx)
Base Zoning Lot Size/
Acres
Dwelling
Units per
Acre
Peninsula Heights
2988 CAMPUS DR 100
Demo 4 office buildings on 2 sites.
Construct a 290-unit residential
development on two parcels, totaling
15.45 acres. Sepcial Use Permit
290 100% E1-1: Office 15.45 19
Concar Passage
666 CONCAR DR
Demo existing shopping center.
Construct mixed-use development with
commercial, office and residential.
961 97% TOD: Mixed use 14.51 66
Total Projects = 20*
Total Mixed-use Projects with Residential = 8
Total Residential-only Projects = 7
Average dwelling units per acre for all Residential Projects = 48 * Different phases of the Bay Meadows Project counted as one project.
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