From: Ali Sapirman
To: McDougall, Paul@HCD; Danino, Shawn@HCD
Cc: Jordan Grimes; CityClerk AP; Council AnswerPoint; Trudi Ryan; Kent Steffens Subject: Sunnyvale’s Draft Housing Element 12/11 Comment Letter Date: Monday, December 11, 2023 5:08:54 PM
Attachments: Sunnyvale Housing Element comment letter 12_10.pdf 1139 Karlstad- 2023 Park Fee Based Solely on This Transaction.pdf Exhibit.pdf
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Dear Shawn and Paul,
As a follow up to our meeting last week please see the attached comment letter.
In solidarity,
--
Ali Sapirman | Pronouns: They/Them
South Bay & Peninsula Organizer | Housing Action Coalition 50 Otis St, San Francisco, CA 94103
Cell: (407) 739-8818 | Email: [email protected] To opt out of all HAC emails, respond to this email with "unsubscribe all".
December11,2023RE:Sunnyvale’sDraftHousingElementDearHCDRepresentatives:ShawnDaninoandPaulMcDougall,CC:SunnyvaleCityCouncilandStaff InourpasttwocommentletterswehavenotedtheexorbitantMulti-FamilyPark-in-lieufeethatisasignificantimpedimenttodevelopment.HCDintheirJulycommentletterstates,“pursuanttopubliccomments,theCityshouldanalyzeits$72,560parkinlieufeeappliedtoallmultifamilyunits.”Wehaveupdatedourcommentletterwithouroutstandingconcerns.
I. ImpercisePark-in-lieuMethodology
A)TheCityShouldNotAppraisethePark-In-Lieu-FeeBasedonResidentialLandSales Thecity'sappraisalsspecificallytargetresidentiallandsales,whichisproblematicbecausethismethodusesthepriceofoneofthemostexpensivetypesofpropertiestosetthefeeandimpliestheCitywillpurchaseresidentiallyzonedpropertiesforparks.○ Therearetwoissueswiththisapproach.First,thisconflictswiththeHousingElementsitesinventoryiftheCityintendstopurchaseresidentialpropertyforparks.Second,iftheCitypurchasesmoreappropriatelyzonedpropertyatlowerpricesforparks,theCityisinflatingtheparkimpactfeeonnewhousing.
B) TheMethodologytheCityisusingisInappropriatetoJustifytheExorbitantPark-In-LieuFee Inordertocalculatethepark-in-lieufeethecityanalyzesalltheresidentialpropertysalesofthegivenyear. Theyremovetheoutliers(thehighestandthelowestsale)andfindtheaverage.Thefeeisthen“adjusted”by25%inordertoaccountfortheadjustmentfromanentitledpropertytoanunentitledproperty.
Inthefollowingexhibitweanalyzedthethreeresidentialpropertysalesthatoccurredin2022,(1175AsterAve.)(1139KarlstadDr.)and(1101SWolfeRd).Inordertofindtheaverageandcalculatethe2023park-in-lieufee,thehighestsale(Wolfe)andthelowestsale(Aster)wouldbe
removedasoutliers,andtheonlysalelefttoanalyzeisthe(Karlstad)sale.
Assuch,
● Thepark-in-lieufeefor2023isreportedlybasedononepropertysale, whichisinappropriatefordeterminingahighfeeonnewhousing.● Additionally, thereisanunsupportedassumptionthatentitledpropertyisworth25%-30%morethanunentitledproperty. GiventhesignificanttimeandexpenseofentitlingpropertyinCalifornia,thevalueincreaseislikelymuchmore.Thecityneedstoprovidebackupforthisadjustment,especiallysincethepropertiesusedtosetthefeeareentitledsalescompsbuttheyintendtovalueunentitledland.
ThestartingpointofthePark-in-lieufeeishigh,andbasedonarbitrarymethodology, andassuch,theyshouldn’treducethefeebasedonsuchahighstartingpoint.
II. Sunnyvale’sParkFeeisCurrentlytheHighestRelativetotheRegion RegionalPark-In-LieuFeesRankedHighesttoLowest
*IndicatesCitieswithaPro-Housingdedication
AfterreviewingcitiessurroundingSunnyvale,SunnyvaleranksthehighestintheirPark-in-lieufeeat$72,560perunit.
III. LackofClarityonhowSunnyvalewillImposethePark-In-LieuFeeReduction SinceourlastcommentletterandengagementwiththeCityCouncilandCitystaff,thecityhasupdatedH19.ReviewParkDedicationRequirements.Theupdatedlanguagecommitsstaffto,“Adoptatieredapproachbasedondensityand/orsizeofunittoreduceparkdedicationin-lieufeesonmultifamilyunits,targetinganaveragereductionofabout30percent.”Theimplementationofthefeereductionwouldoccurbytheendof2024,withamid-cyclereviewin2027,andifaconstraintisidentified,theCitywilltakeactionwithin6months.
City Per unit Multi-familyin-lieuparkfee
Sunnyvale $72,560
Cupertino $54,000-$60,000
MountainView $45,600-$58,560
PaloAlto $54,472
SantaClara $43,472-$52,561
LosAltos $48,800
SanJosé $8,000-$41,600
*SouthSanFrancisco $14,125.08-$23,647.54
*RedwoodCity $11,939.84-$23,647.54
Saratoga $21,562
*Campbell $17,669
WeappreciatetheCity’sattentiontoaddressingthePark-in-lieufee.A30%reductionwouldbesignificantprogresstowardsmakingdevelopmentfeasibleinSunnyvale.However, ifthecityintendstohavea30%reductioninthefee,thecityshouldmakethatclearinthelanguage.Basedonthecurrentdraft,itisunclearhowtheCityintendstoimplementthe“tieredbasedapproach”,thislanguageisvague,confusing,couldtriggerunintendedincentives,andaddunknownstoprojectswhichaddadditionalcosts.Onthislanguagealone,itisunclearwhatdevelopersshouldexpecttopayforthePark-in-lieufee,anditwouldbedetrimentaltodevelopmentiftheCitywaitstoprovideclarificationuntiltheendof2024.WerecommendtheCityupdatesthelanguagetoclearlyidentifythereductionintheMulti-familyPark-in-lieufee.
IV. IfthePark-In-LieuFeeisReduced,itwillbeProgress,buttheFeeisstillHighRelativetotheRegion RegionalPark-In-LieuFeesRankedHighesttoLowestWitha30%ReductioninSunnyvale’sFee *IndicatesCitieswithaPro-Housingdedication
Cupertino $54,000-$60,000
MountainView $45,600-$58,560
PaloAlto $54,472
SantaClara $43,472-$52,561
Sunnyvale (Ifreducedby30%)50,792
LosAltos $48,800
SanJosé $8,000-$41,600
*SouthSanFrancisco $14,125.08-$23,647.54
*RedwoodCity $11,939.84-$23,647.54
Saratoga $21,562
*Campbell $17,669
Althougha30%reductionwouldmakeprogresstowardsfeasibledevelopmentinSunnyvale,a30%reductionwouldstillkeeptheSunnyvalefeehigherthanmanysurroundingcities.Allofthecitiesthathavereceivedapro-housingdesignationarehalfofthecostofproposedSunnyvalefeereduction.WerecommendtheCityconsidersa50%reductionforthefeetoeliminateconstraintstohousingproduction.WealsonotethattheCityisevaluatingthisfeeinavacuumandweoughttoconsiderthecumulativefeesofdevelopment,inwhichwerecommendtheCityhasafeasibilityanalysispriorto2027.
Insolidarity,
AliSapirman,HousingActionCoalition
JordanGrimes,GreenbeltAlliance