20March2024
Re: Proposal for theImmediateAdoptionof GenerationHousing’sRight SizeImpact FeeAffordableHousingIncentivizationProgram DearMayorRogers, Councilmembers, andCityManagerSmith:
Consistentwithourcommitmenttoworkinginpartnership, GenerationHousinghasdevelopedarevisedimpactfeereformapproachspecificallyresponsivetotheneedsandconcernsexpressedbyourlocal leadership. TheRight SizeImpact Feepolicyisacomprehensive, budget-protectiveapproachtofeereformthat risestomeet theeconomicmoment andtheincreasingbreadthandseverityof SonomaCounty’shousingcrisis. TheRightSizepolicycanspurhousingproductiontoservetheneedsof all incomelevelswhileprioritizingequity, climateresilience, andsustainability.
SinceSeptember2023, GenerationHousinghasbeenadvocatingforlocaladoptionof Sacramento’s$0RateAffordablehousingimpactfeereformprogram. Asthemostspecificallyresponsivetothecurrenteconomicclimate’schokeholdonthemultifamilyhousingpipeline, Impactfeereformwaselevatedasthetoppriorityof ourNorthBayNEXTActionSteps platform; becauseitisan 1 extremelyefficientreform—easytoimplementandmanage; andbecauseitprioritizesshovel-readyprojects. Sacramento’s$0Rateprogramwasinitiallypromotedasananswertothecall bymanyof ourelectedleadersforamodelthathadalreadyprovensuccessful inanotherjurisdiction, andSacramento’scertainlyhad. Weadvocatedfor$0Rateadoptionalongwithearlyimplementationof AB602, astatelawthatrequiresimpactfeestobeimposedrelativetounitsize, alawwestronglysupport, butcouldbeslowtohaveanimpactduetothecostlyandlengthystudiesrequiredforimplementation. 1 GenerationHousing’sNorthBayNEXTActionStepsaredesignedtoworkinconcerttospurdiversehousingproduction. Theyincludeimpactfee, parking, andzoningpolicyreformandmodernization, streamliningthepublicreviewprocess, andthecreationof alocal affordablehousingfundingsourcethroughaBayAreaHousingFinanceAuthoritybondmeasure.
Generationhousing.org707-900-GENH[4364] phone707-570-8768fax GenerationHousing427MendocinoAve, Suite100SantaRosa, CA95401
Overthepastsixmonths, wehavemetwithelectedandstaff leadersthroughoutthecounty. Wearepleasedthattheleadersof theTownof Windsor, Cityof SantaRosa, andCountyof Sonomaarepoisedtogiveseriousconsiderationtofeereforminthosejurisdictions(andwewanttogivenodstotheCityof Petaluma,whichhasalreadyimplementeda$0Rateprogramfor80AMI andbelow, andtheCitiesof SonomaandSebastopol, whichalreadyleviesfeespersquarefoot).Whilewehaveheardgreatinterestinmakinglocal investmentsinaffordablehousing, thisinteresthasbeenaccompaniedbybudgetarycoldfeet, andforsome, adesiretospurthemultifamilymarketratehousingneededbymanylocalemployers. Additionally, wehaveregisteredgeneral supportforthespiritofAB602, atransitionawayfromregressiveandillogical per-doorfeestofeesrelativetounitsize.
Basedonthisinput, wedevelopedtheRight SizeImpact Feepolicy. Weareexcitedtoadvancethismorecomprehensiveimpactfeereform, whichkeepsatargetonaffordablehousing, maintainstheefficacyof feerelief, andextendsincentivestomultifamilyaffordable-by-designunitsabovethetypicalaffordabilitylevel.
Weurgeall of theCounty’sjurisdictionstoconsider prompt adoptionof thispolicyasanemergencyordinance.
TheRightSizepolicyisintendedto:
٠Providethegreatestincentivesforthemostdeeplyaffordablehousing٠CapturethosemissedbyAffordableHousingeligibilitystandardsbyincentivizingmultifamilyaffordable-by-designhousingforworkforcehouseholds٠Supportdevelopmentof amorediversehousingsystemthatmeetstheneedsof all levelsof ourworkforceandthehousingneedsof individualsandfamiliesastheyevolveovertime٠Facilitateanequitableshareof feecontributionfromhomesthatstraininfrastructureandcontributemostsignificantlytolocal greenhousegasemissionbyimposinggraduatedincreases٠Increaserevenuestreamstooffsettheinvestmentinthisprogramandprovidereliablefundingforneededinfrastructure, specificallythrough(1) Generationhousing.org707-900-GENH[4364] phone707-570-8768fax GenerationHousing427MendocinoAve, Suite100SantaRosa, CA95401
propertytaxincomefromnewaffordable-by-designmultifamilyprojectsthatmightnototherwisebefinanciallyfeasible; and(2) feesincreasesformidsizeandlargesinglefamilyhomesproportional tosquarefootage(otherthanfirerebuilds) Right SizeImpact Feespolicy
Enactanemergencyordinancetoremaininplaceuntil thelaterof threeyearsorajurisdiction’s6thCycleRegional HousingNeedsAllocation(“RHNA”) obligationsaremet, thatestablishesanimpactfeestructure, applicabletoall feesundertheMitigationFeeAct, aswell asWaterandSewerfees, that:
(1) reduceimpactfeesformultifamilyhousingtothefollowingportionsofcurrentfeesaccordingtounitsize:
600ft
2 Studioor1 BR 800ft
2 or2BR 1000ft
2 or3BRDeedRestrictedAffordableHousingunder80AMI
20%(of currentfees) 30% 40%DeedRestrictedAffordableHousing81-120AMI 30% 40% 50%AffordableHousing-by-Design
2 55% 65% 75%
2) increaseimpactfeeratesforsinglefamilyhomes(SFHs), otherthanfirerebuilds, basedontheproposedproportions, excludingEnterpriseFunds(e.g.sewerandwater) SFHsof 1000ft
2 andbelow
SFHsof 2500ft
2 andabove
SFHsbetween1001 ft
2 and2499ft
2 ProposedFeeIncrease
assessedfeesatthecurrentvalue
assessedfeesatthemaximumallowablevaluebasedonthejurisdiction’smostrecentnexusstudy assessedproportional tosizebetweenthecurrentrateandallowedmaximum 2 AffordablebyDesignprojectsaremultifamilyunitsthataresmaller, moreefficient, orhavefeweramenities. Thegoal istoenablehousingthatcanbebroughttomarketatpricesaffordabletohouseholdsearningbetween120percentand150percentof SonomaCounty.
Generationhousing.org707-900-GENH[4364] phone707-570-8768fax GenerationHousing427MendocinoAve, Suite100SantaRosa, CA95401
WeCan’t AffordNot To.Whileweareheartenedbythegeneral interestinlearningaboutsolutionsandcommitmenttosomelevel of investment, andhaveappreciatedopendialoguethatledtothemorecomprehensiveapproachof theRightSizepolicy, weareconcernedbystatementslike“wejustcan’taffordit.” Wesubmitthatwecan’taffordnottoadoptthispolicy.
Choosinginactionormodestactionriskssinkingdeeperintoahousingdeficit,decimatingthelocal constructionindustryasintheGreatRecession, beingunabletocompetewithotherBayAreacountiesforresourcesneededtoleverageBAHFAbondfunds, andbeingforcedtocontinueincreasinginvestmentintotheservicesthatmanageandmitigatetheoutcomesof housingscarcityandhousingcostburden. Weeither payfor housingor wepayfor thelackofhousing.
DespitehousingbeingastatedpriorityforeverySonomaCountyjurisdictionsinceafterthe2017fires(andsomebefore),SonomaCountyasawholecontinuestolagbehindinproduction. Weneedyou, ourelectedleaderstoact, andactinalignmentwithyourstatedprioritiesandvalues, withanurgencythatisconsistentwithacrisis. Weneedyoutoresolvetomakethehardbudgetarychoicesthataperson, organization, orgovernmentmustmaketooperationalizepriorities.
Generationhousing.org707-900-GENH[4364] phone707-570-8768fax GenerationHousing427MendocinoAve, Suite100SantaRosa, CA95401
Wecall onyou, theleadersof SantaRosa, toembraceRight Sizeimpact fees,apolicydevelopedbasedonyour feedback, asanemergencyordinance.
Together, westandreadyandwillingtosupportyourboldanddecisiveactionaroundthisproposal.
Wethankyouforyourserviceandcontinuedcommitmenttoensuringall membersof ourcommunityenjoythebenefitsof asafe, stable, andaffordablehome.
Inpartnership,
JenKlose| ExecutiveDirectorGenerationHousing
Generationhousing.org707-900-GENH[4364] phone707-570-8768fax GenerationHousing427MendocinoAve, Suite100SantaRosa, CA95401
From: Lauren Fuhry
To: City Council Public Comments
Cc: Nevada Merriman; Matt Franklin; Calum Weeks
Subject: [EXTERNAL] Comment for April 9 City Council Meeting Date: Monday, April 1, 2024 12:38:54 PM
Attachments: 24-0327 MidPen Comment Letter - Santa Rosa Impact Fees.pdf Dear Santa Rosa City Council,
In advance of the April 9, 2024 City Council meeting, please find attached MidPen Housing’s support letter for the Generation Housing’s $0 Dollar Impact Fee Affordable Housing Incentivization Program. Please feel free to reach with any questions.
Thank you,
Lauren
Lauren Fuhry, Project Manager
(pronouns: she/her)
MidPen Housing
North Bay Development Office
350 College Ave Suite 250, Santa Rosa, CA 95401
c. 707-292-4854
March 27, 2024
Re: Support for the Immediate Adoption of Generation Housing’s $0 Dollar Impact Fee Affordable Housing Incentivization Program at the April 9, 2024 Santa Rosa City Council Meeting
Dear Mayor Rogers, City Councilmembers, and City Manager Smith:
Thank you for the opportunity to comment on the City’s affordable housing impact fee structure.
We urge the adoption of Generation Housing’s $0 dollar Impact Fee program as an emergency ordinance effective for at least 3 years.
MidPen Housing is one of the nation’s leading nonprofit developers, owners and managers of high-quality affordable housing and onsite resident services. Since MidPen was founded in 1970, we have developed over 130 communities and 9,400 homes for low-income families, seniors, including homeless families and individuals and those with supportive housing needs throughout the greater Bay Area. We have two Santa Rosa projects in our pipeline: Casa Roseland (75 units in predevelopment) and Mahonia Glen (99 units in construction).
The City of Santa Rosa’s Regional Housing Needs Allocation (RHNA) sets a goal of 4,685 units of production by 2031. Approximately 41 percent of these units have a target of being affordable to residents making 80% of the Area Median Income (AMI) and below. In order to meet these goals, the City needs to utilize all tools at its disposable to increase multifamily housing development and ensure that production benefits everyone across the income spectrum.
Drawing from deep experience working with jurisdictions across the greater Bay Area on Housing Element Policy, our team published a guide on best practices last year. In the guide, we recognize that fee exemptions are important tools for making affordable housing development financially feasible. For example, the City of Sunnyvale implemented an exemption of park in-lieu fees for affordable rental projects and affordable units in mixed-income rental projects. At MidPen’s Ira D. Hall project, currently in construction, this exemption saved the project $7.8M ($44k/unit), reducing the total development costs by 6%. These waived fees were also advantageous to the project’s ability to secure financing as they count towards the local leverage calculation utilized by competitive financing sources like the Low-Income Housing Tax Credit program (LIHTC). Furthermore, the project was able to take out a smaller construction loan due to not needing to carry the cost of fees in the loan amount.
We are at an inflection point with respect to housing development. There is a significant risk that interest rates and materials costs could halt already sluggish development, and we have a tremendous opportunity in the Bay Area Housing Regional Finance Authority (“BAHFA”) bond measure, but the City will need to ensure that projects do not languish in the pipeline even when there is available funding. Fee Relief is specifically responsive and targeted to meet the challenges presented by the current economic climate and can help deliver desperately needed affordable housing.
The Fee Relief program is a strategic and efficient approach to housing investment. Adopting this programmatic approach can offer the following outcomes:
From: Lauren Fuhry
To: City Council Public Comments
Cc: Adrian Covert
Subject: [EXTERNAL] SR YIMBY Comment letter re: Impact Fees - 4/9/24 Council Mtg Date: Monday, April 1, 2024 8:31:44 PM
Attachments: SRYIMBY Impact Fee Comment Ltr 03.29.24.pdf Greetings City Council,
Please find attached comment letter from the Santa Rosa YIMBY chapter in support of Generation Housing's Right Size Impact Fee policy proposal. We hope to see this effort come to fruition quickly and remove another barrier to housing production here in Santa Rosa! We look to seeing the discussion as part of the April 9 City Council meeting.
Kind regards,
Lauren Fuhry
Local Lead
Santa Rosa YIMBY
March 29, 2024
The Honorable Natalie Rogers
Santa Rosa City Council
100 Santa Rosa Avenue
Santa Rosa, CA 95404
RE: Housing Impact Fee Reform
Dear Mayor Rogers and Councilmembers,
On behalf of Santa Rosa YIMBY, we respectfully urge you to support the Right Size Impact Fee Policy proposed by Generation Housing.
In 2023 Santa Rosa adopted delivering housing for all and reducing homelessness and its impacts and as the city’s two leading goals and priorities. These priorities have again surfaced to the top of the 2024 goals and priorities process. The cost of housing is the single biggest driver of homelessness in the United States, and the single biggest cost driver of housing is the supply of housing relative to demand. Cities can mitigate these cost pressures by allowing more housing via zoning reforms, reduced parking requirements, and reducing impact fees. In 2020, the City Council adopted the updated Downtown Station Area Specific Plan which, among other things, up zoned downtown and eliminated parking minimums. However, Santa Rosa’s antiquated impact fee structure remains intact. Reforming this fee structure is critical for Santa Rosa to succeed in meeting its housing goals amidst growing competition from other Bay Area cities for the region’s limited construction infrastructure.
Santa Rosa currently assigns impact fees on a per-door basis, irrespective of unit size. This is irrational, as larger units with more people will have a larger impact on roads, air quality, water, and energy than smaller units. This structure disproportionately impacts affordable housing since affordable housing units tend to be smaller and because the impact fee represents a higher cost burden relative to the cost of construction. In short, the current fee structure makes it harder to build affordable housing precisely when it’s needed most.
Nor does the current impact fee structure consider the impact of failing to build housing. For instance, an analysis in Santa Clara County found that 67% of the total public cost of homelessness came from services related to mitigating costs associated with, and worsened by, unsheltered homelessness—such as emergency medical care, drug rehab, emergency psychiatric services, and criminal justice costs—rather than providing housing itself. Cities either pay for housing, or they pay for not having housing.
Generation Housing estimates the Right Size Impact Fee policy will require a 1.39% budget adjustment. In the immediate term, this impact could be partially offset with an increase in impact fees on market rate single family homes, and/or possible other mechanisms. Long term, cities cannot fee themselves into prosperity. Santa Rosa must embrace the dividends of growth through sales and property tax receipts to achieve solvency. As you consider this budget impact and reflect on the city’s goals and priorities, we’re reminded of comments once made by President Biden, “Don't tell me what you value, show me your budget, and I'll tell you what you value.”
We respectfully urge the City Council to support fee reform and ask city staff to develop several budget scenarios to achieve the Right Size Impact Fee Policy.
Sincerely,
Adrian Covert Lauren Fuhry
Local Lead Local Lead
Santa Rosa YIMBY Santa Rosa YIMBY