1 DOWNTOWN
HIGH -DENSITY MULTI- FAMILY RESIDENTIAL
INCENTIVE PROGRAM
CITY COUNCIL
DECEMBER 13, 2022
Jen Santos
Deputy Director
Parks Division
Clare Hartman
Director
Planning and Economic
Development
Jesse Oswald
Chief Building
Official
PRESENTATION OVERVIEW
• Background
• Incentive Program - Overview
• Implementation
• Community feedback
• Staff Recommendation
2 INCENTIVE PROGRAM
• Adopted in 2018 to incentivize downtown housing
development including increased density and height by
reducing/deferring City development impact fees for a
limited 5-year term
• Supports City Council goals to foster a vibrant downtown and meet housing needs for all
• Council to consider:
• Extending the Program by an additional 3 years
• Amending the Program to reflect adoption of the Downtown Station Area Specific Plan – zoning and Floor Area Ratio (FAR)
3 BACKGROUND
• 2016 - Adopted the Santa Rosa Housing Action Plan
• Supported Downtown Housing as a Council Tier1 Priority • Created an UP Downtown toolbox
• Adopted a city-wide Resilient City Ordinance
• 2018 - Adopted Downtown Residential Incentive Program • 2019 - Adopted Amendments to Incentive Program
• 2020 - Adopted the Downtown Station Area Specific Plan • Maintained Housing for All as a Council Goal
• CC Goals Work Plan 22-23 - Review Downtown Fee Incentive Program 4 • Council Priority
• Permit Streamlining
• CEQA Streamlining
• Fees & Incentives
• Opportunity Zone
• Downtown Plan
Update
• City owned assets
• RED Housing Fund
• Staffing &
Professional Services
5 2018 ESTIMATED IMPACT FEES PER UNIT
DOWNTOWN RESIDENTIAL PROJECTS
1 Fee varies by unit mix. Above estimate assumes average unit size of 800 sq. ft. and average fee per unit of $1.50 per sq. ft. 2 Building inspection, plan review, fire permit, technology, advanced planning, micrographics, and state-mandated fees.
Capital Facilities Fee
$5,433
Park Impact Fee
$7,734Water &
Wastewater
Demand Fee
$9,490
Housing Allocation Fee
$1,800
School District Fee
$3,500
All Other
$1,100
T otal Impact Fee per unit:
$29,057
6 DOWNTOWN RESIDENTIAL FEE
INCENTIVE PACKAGE
On September 25, 2018, the City Council adopts:
• Resolution #1: Capital Facilities Fees (CFF)
• Resolution #2: Water and Wastewater Impact Fees
• Resolution #3: Park Development Impact (PDI) Fees
On June 18, 2019, the City Council adopts:
• Amendments to Resolutions #1 (CFF) & #3 (Park)
• Correct “downtown” boundary and add residentially
eligible zoning districts
7 8
2019 DOWNTOWN RESIDENTIAL FEE
INCENTIVE CRITERIA
• Located in the Downtown – as defined by Station Plan
• Zoned CD-7 or CD-10:
• 4 or more stories total; and 3 must be residential
• CD-5, TV-M, TV-R, R-3-18, or R-3-30 Zoning:
• 3 or more stories total; and 2 must be residential
• Breaking ground before August 31, 2023
• “Breaking ground” is defined as securing a
foundation permit
9 2022 ESTIMATED IMPACT FEES PER UNIT
DOWNTOWN RESIDENTIAL PROJECTS
1 Fee varies by unit mix. Above estimate assumes average unit size of 800 sq. ft. and average fee per unit of $1.50 per sq. ft. 2 Building inspection, plan review, fire permit, technology, advanced planning, micrographics, and state-mandated fees.
Capital Facilities Fee
$6,226
Park Impact
Fee
$8,759
Water &
Wastewater
Demand Fee
$6,924
Housing Allocation Fee
$3,200
School District Fee
$3,500
All Other
$1,100
T otal Impact Fee per unit:
$29,709
As of:
November 2022
10 2022 DOWNTOWN INCENTIVE EXAMPLE (CFF & PARKS)
MARKET RATE VS. AFFORDABLE
4 Stories 5 Stories 6 Stories 7 Stories 10 Stories
Residential Floors 3 4 5 6 9
BEFORE INCENTIVES
Fee Per Unit (All Floors) $14,985 $14,985 $14,985 $14,985 $14,985
AFTER INCENTIVES
MARKET RATE
Fee Per Unit $14,985 $14,985 $14,985 $14,985 $14,985
% Units Subject to Fee 100% 75% 60% 50% 33%
Net Fees/ Unit $14,985 $11,239 $8,991 $7,493 $4,945
Fee Incentive/ Unit $0 ($3,746) ($5,994) ($7,493) ($10,040)
AFFORDABLE
Base Fee /SF $4.00 $4.00 $4.00 $4.00 $4.00
Base Fee/ Unit (800 SF/ Unit) $3,200 $3,200 $3,200 $3,200 $3,200 % Units Subject to Fee 100% 75% 60% 50% 33%
Net Fees/ Unit $3,200 $2,400 $1,920 $1,600 $1,067
Fee Incentive/ Unit ($9,967) ($10,767) ($11,247) ($11,567) ($12,100) 11 ADDITIONAL PARK FEE INCENTIVE
• In addition to reduced fees, 100% of Park fees collected from qualifying projects are to be used Downtown
• This is in addition to park funds already allocated to downtown through standard city-wide budget process
• This is in addition to opportunities already available city-wide for development agreements and public/private partnerships • Tracking method for Downtown park funds is in
development
• Application of “Downtown” funds is under review
12 WATER AND SEWER IMPACT FEE
INCENTIVE/DEFERRAL
Water and Sewer Impact Fee Deferral Program is eligible for housing projects in the Downtown that are a minimum 3 floors dedicated to housing:
• Option 1: Deferral of water and wastewater demand fees for eligible projects until 75% of the residential units are occupied or for 6-months after final inspection, whichever is sooner.
• Option 2: Finance the water and wastewater fees for 5-years with interest.
Deferral provides a $1,700 per unit incentive
Per Keyser Marston Associates Memo
13 IMPLEMENTATION
ISSUED & PAID
• The Cannery – 129 units,
6 stories, 100% affordable
• Total Incentive Value -
$1,627,856
• CFF - $553,854
• Parks - $1,074,002
• Park impact fees paid –
100% Downtown - $63,778
14 ISSUED/PAYMENT PENDING
• Pullman Lofts Phase 1 – 74 units,
3 stories
• Total Incentive - $377,379
• 888 4th Street – 90 units, 6 stories
• Total Incentive - $487,972
IN PLAN REVIEW
• Pullman Lofts Phase 2 – 40 units, 5 stories
• Estimated incentive $382k
• 425/431 Humboldt Street – 88 units, 7 stories
• Estimated incentive $1.3 M
• 420 Mendocino Ave – 161 units, 8 stories
• Estimated incentive $969k
15 IMPLEMENTATION
ENTITLED & ELIGIBLE
• Ross Street
Development
o 109 units, 8 stories
• 1 Santa Rosa Avenue
o 120 units (5 affordable)
o 7 stories
• SMART Village, Phase I
o 114 units (12 affordable)
o 6 stories
• DeT urkWinery Village
o 185 units (15 affordable)
o 4 stories
• Avenue 320 Apartments
o 36 units, 3 stories
• The Flats
o 24 units, 5 stories
16 COMMUNITY FEEDBACK
• 2022 – Economic Development Subcommittee
• Continue to monitor implementation
• Continue to collect feedback
• Consider renewing prior to program’s “expiration”
• 2022 – Developer Roundtable Series
• Downtown T oolbox – continue the layers of incentives • Continue to provide incentives that address Time-Cost-Certainty • Extend the timeframe of the program
• Continue to invest in downtown parks and urban spaces 17 AMENDMENTS PROPOSED
1. The project must include primarily residential uses:
a) For projects located Downtown on parcel(s) zoned CMU with a maximum base FAR requirement of 8.0, as identified in Map LU-5 of the Downtown Station Area Specific Plan: the project must be four or more stories in height, with at least three floors dedicated to residential use.
b) For all other projects located Downtown: the project must be three or more stories in height, with at least two floors dedicated to residential use.
c) For affordable/inclusionary housing projects located Downtown:
the project must construct affordable units on-site pursuant to the City’s Housing Allocation Plan.
2. The residential project must break ground before August 31, 2026. “Breaking ground” is defined as securing a foundation permit; 18 RECOMMENDATION
• It is recommended by the Planning and Economic
Development Department that Council, by three
separate resolutions, adopt amendments to the
High-Density Multi-Family Incentive Program to
further support housing development and
increased density in downtown Santa Rosa.
19