SR-9-A (84)
?-A
rstf123b.rpt
Council Meeting: December 3, 1991
DEe 3
Santa Monica, California
l~j!ji
To: Mayor and City Council
From: City staff
Subject: Recommendation to Direct the city Attorney to prepare an
ordinance Implementing Proposition R and Supplemental
Information
INTRODUCTION
On November 19, 1991 the Council received the full staff analysis
and implementation plan for Proposition R and held a public
hearing. Further consideration of the implementation plan was then
continued until December 3, 1991. Additionally Council addressed
a series of questions to staff, with a request that the staff
provide the additional information by the December 3, 1991 meeting.
This report presents the additional information obtained by staff
for consideration by the Council at the December 3, 1991 meeting.
BACKGROUND
On January 8, 1991, city staff presented to the city Council a
proposal for the implementation of Proposition R. At the request
of the Planning Commission, the council deferred immediate action
pending Planning commission review.
On February 20, 1991 staff
proposed to the Planning Commission that further study be conducted
over a six month time period.
While that study was being
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conducted, the City Council adopted an interim ordinance on March
26th, 1991 and, on September 10, 1991, extended the interim
ordinance to January 10, 1991.
The completed staff study together with the staff implementation
proposal were incorporated into a Summary Report and Technical
Report on Proposition R, both of which were made available to
council members and to the public on September 10, 1991.
The city Council considered the staff proposal at the November 19,
1991 meeting and, after a public hearing, continued consideration
of the matter until December 3, 1991. The Council also requested
that staff examine some additional models and provide certain
additional information. staff's response to those requests is as
follows:
1. Staff was requested to look at the impact of an implementation
plan which would require that all inclusionary units be provided
onsite if the new residential development caused the demolition of
a multifamily unit renting for less than 100% of the median rent.
Staff has determined that the following are the maximum rents
by bedroom size affordable to households with 100% median income:
o Bedroom $735
1 Bedroom $840
2 Bedroom $998
3 Bedroom $1,139
2
4.02
Vacation Leave
Employees covered herein shall accrue vacation leave with
pay on the following basis:
A. FOllowing completion of the first six (6) calendar
months of continuous service, six (6) working days.
B.
Thereafter, up to and including five (5)
years of service, one (1) working day
completed calendar month of service.
completed
for each
c. Thereafter, up to and including ten (10) completed
years of service, one and one-quarter (1.25) working
days for each completed calendar month of service.
D. Thereafter, up to and including fifteen (15)
completed years of service, one and one-half (1.5)
working days for each completed calendar month of
service.
E. Upon completion of fifteen (15) years of service and
thereafter, one and three-quarters (1.75) working
days for each completed calendar month of service.
F. Employees are expected to take their vacation each
year. An employee who has accrued vacation to the
maximums prescribed herein may be required to take
vacation leave in order to reduce the accumulation
balance. The scheduling of vacation shall be
according to department or division policies and
contingent on the service needs of the department.
If an employee is denied the time off required to
maintain a vacation balance below the maximum
allowed, the Department Head shall authorize payment
to the employee for such vacation as would exceed
the maximum accumulation limit. However, if the
employee is scheduled to take vacation and fails or
refuses to do so, he/she forfeits the excess accrual
without compensation.
G. Accrual of vacation leave shall not exceed forty
(40) days.
H. Except as provided herein, the administration or
application of vacation leave provisions and the
limitations on the accumulation, proportionate
accumulation, scheduling and payment for such leave
shall be as prescribed in the civil Service
provisions of the Santa Monica Municipal Code.
I. If an employee covered herein should receive a
payoff for any unused accrued vacation days, said
days shall be paid on the basis of eight (8) hours
pay, at the employee's base salary rate of pay at
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required that the developer pay an in lieu for all partial units
required. The in lieu fee would consist of a percentage of the
total city subsidy required to produce a low income unit
(approximately $60,000). Thus, a five unit project would require
a full low income unit and an in lieu fee of 50% of $60,000 for the
additional partial unit required. Another variation of this model
would permit the developer to pay an in lieu fee for the entire
first unit if the project did not result in demolition of any lower
income rentals. Staff has reduced these proposals to a chart which
is attached as Attachment A.
3. Staff was requested to more fully describe the structure of an
affordable ownership program. Essentially, such a program
determines the initial sales price by calculating the amount of
mortgage affordable to a low or moderate income person, after
deducting condominium fees, taxes and insurance. A regulatory
agreement is recorded that requires the initial buyer to occupy the
unit and to sell it for the initial sales price, increased only by
a fixed annual rate of increase (for example, by the percent of
increase in the median income.) Additionally, a low income seller
is required to sell the unit to a buyer who meets the same income
requirements. The regulatory agreement is enforced by the city and
is usually enforced by an option agreement, which permits the City
to purchase at a fixed price should the seller be unable or
unwilling to find an appropriate buyer. Such a program requires
significant staff monitoring and involvement but also could provide
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the only low or moderate income home ownership opportunities in
Santa Monica.
4. staff was requested to detail the reasons for reducing the
preexisting $15 per sq. ft. in lieu fee to $12 per sq. ft. The
principal reason for the reduction was to increase the financial
viability of projects. While the City inclusionary ordinance,
Ordinance 1519, established a $15.00 per sq. ft. in lieu fee
requirement, it did not also require the building of a moderate
unit onsite. since the staff proposal imposes such a requirement,
it was necessary to also reduce the in lieu fee to compensate for
the increased cost of providing a moderate income unit. staff
projects that $12 per square foot will provide approximately the
subsidy historically required for the City to subsidize a low
income unit. However, the $12 per sq. ft. does not reimburse the
city for any administrative funds necessary to utilize the in lieu
fees. Nor does it reimburse the city for the cost of establishing
a tenant list, maintaining the list and monitoring the inclusionary
units.
5. Staff was requested to consider alternative upper limits (other
than twenty units) for requiring all inclusionary units on site.
with respect to condominium units, staff reviewed the projects
which have been approved during 1990 and 1991. There have been 125
projects which have gone through the planning process. Of those,
only 10 have been larger than 9 units, only 4 have been larger than
5
14 units, and only 1 has been larger than 19 units. Given this
historic pattern, changing the upper limit has little impact on
actual development. Since apartment projects have historically
provided the units onsite, the upper limit with respect to
apartment projects is of even less significance.
6. a. Staff was requested to look at the feasibility of
neighborhood specific in lieu fees, as opposed to a single city
wide fee. Neighborhood specific fees are certainly feasible. The
fee could most easily be based on relative land costs in each of
the City's historic neighborhoods. Using $12, for example, as a
base figure, the neighborhood specific fee could range higher or
lower to the same degree that a neighborhood's land prices vary
from the citywide average. This would tend to lessen the
differential impact of the in lieu fee in different neighborhoods.
b. Staff also attempted to ascertain if construction costs
varied by neighborhoods. Staff has been unable to obtain any
reliable information confirming or contradicting differential
neighborhood specific construction costs. The pattern of small
in-fill development makes it difficult to compare costs between
different developments. The only construction cost data utilized
by the city is maintained by the Building Department. That
information is utilized on a citywide basis. A copy of that is
attached as Attachment B.
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7. Staff was requested to look at the impact of the staff
proposal on family units. To the extent the staff proposal
requires a per square foot in lieu fee on the market rate units, it
provides a disincentive to build larger (and thus potentially
"family" market rate units). However, the market was not producing
market rate "family" units prior to Proposition R. Thus,
regardless of the approach taken, this ordinance will probably have
little impact on future market rate family unit production.
Nevertheless, the ordinance could provide a lower in lieu fee for
multi-bedroom market rate condominiums and apartments, should the
Council so desire. The Council should also be aware that much of
the City'S current affordable housing production is composed of
family units.
8. Staff was also requested to look at the application of the
ordinance to spec i f ic quasi -res idential developments I such as
artists' lofts. It is staff's opinion that this would require a
legal interpretation of the Proposition. While that opinion could
well turn on the individual facts of each case, Council may
consider the development of guidelines to assist developers.
BudqetfFinaneial Impact
The recommendation contained in the Summary Report will have a
budgetary/financial impact in that in lieu fees will be collected
and held for future programming. It is not possible to predict
with any certainty the amount of in lieu fees. However, an
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estimate based on the number of units constructed during the past
five years which have chosen to pay the in lieu fees, using an
estimated square footage, would predict an annual revenue of
approximately $1,300,000.
Addi tionally, depending upon the implementation strategy adopted by
the Council, additional staff time of the Community Development
Department and Land Use and Transportation Management Departments
will be required for implementation and monitoring.
RECOMMENDATION
It is recommended that the City Council direct the city Attorney to
draft an ordinance implementing the Proposition R implementation
strategy contained in the Summary Report.
Prepared by: Peggy Curran, Director
Chuck Elsesser, Housing program Manager
Denise Altay, senior Development Analyst
Community Development Department
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30% ROUNDING UP* UNIT PLUS FEE**
UNITS INCLUSIONARY INCLUSIONARY
BUILT UNITS UNITS FEE
Low/Mod Low/Mod
2 0 $36,000
3 0 $90,000
4 1 1 $12,000
5 1/1 1 $30,000
6 1/1 1 $48,000
7 1/1 1/1 $ 6,000
8 2/1 1/1 $24,000
9 2/1 1/1 $42,000
10 2/1 2/1 $ 0
11 2/2 2/1 $18,000
12 2/2 2/1 $36,000
13 2/2 2/1 $54,000
14 2/2 2/2 $12,000
15 3/2 2/2 $30,000
16 3/2 2/2 $48,000
17 3/2 3/2 $ 6,000
18 3/3 3/2 $24,000
19 3/3 3/2 $42,000
20 3/3 3/3 $ 0
UNIT PLUS FEE***
UNIT INCLUSIONARY
BUILT UNITS FEE
Low/Mod
2" 0 $36,000
3 0 $54,000
4 0 $72,000
5 0 $90,000
6 0 $108,000
7 0/1 $66,000
8 a/I $84,000
9 a/I $102,000
10 1/1 $60,000
* Units on site w/demolition of units rented above 100% of median
** Fee as percentage of $60,000
*** First full unit and all fractions as a percentage of $60,000
ATTACHMENT A
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Building Valuation Data
.;- th,: reql,E,r or ru'1lerous burkir'lg orrroa/s, Burldmg Srandardsorfers the followrng budding valuatIOn data representrng average costs ror mos' :;,uldI I"'g
Bec~J:'e re,.dent'al bl.I'dlngs are the rros' common for manv crtles, two general classes are cOnsrdered ior these, one for 'average" construct'()~ arc thE< 0,
roo gooo -\C:L.5t..ent5 5'loLJid ~e made for specral archItectural or 5tructural features and the location of the pro;ect Hrgher or iower .In't C05:, rr~v ort
res~lr
T!-j" L.~' [C05'o ~re IPte,ceo '0 cO'llplv ""m the defltlrtron of 'valuation' :n Sectron 423 of the Uniform Burldmg Code~'< and thus rnclude arcn lectu'ai. stp_
';.lra: e' ect'rt2. piuTDlng and mechanrcal work. except as speclircally Irsted below The unrt costs also mclude the contractor's profIt wrlcr srould 'lot b
orrraed
Tre ceterrrrra'ror 00 pian check fees lor prOjects reviewed by the InterratLonal Conference of BUilding OffICIals wrll oe based on va:!..atio~ cO'llputed fro
these rrgL:res wf-Jrc!-j were cOl'lprled In April 1991
Co" per I
Sq...~te Foot,
A,. rag. Occupancv and Type
I 7 DWELLINGS
S 70 40' Tvpe V-Masonry
(Good) $76 80
T\'O€ V-Wood Fra'l1e
;Good) $ 72 90
Basements-
Semi-finished
[Cood) $ 18 20
Unfinished
iCood) $1410
8 FIRE STATIONS
Type 1 or II F R 90 40
Type 11-1-Hour 5860
Type 11-"1 55 :'0
Type 1I1-1-Hour 6520
Type III-N 61 90
TYpe V-1-Hour 5830
Type V-N 55 40
9 HOMES FOR THE ElDERLY
Type I or II F R 81 60
Type 1I-1-Hour 6540
Type 11-,'\1 62 30
Type 111-1 -Hour 68 20
T~'pe IIC-....' 65 20
Type V-1-HOur 6500
Type V-N 61 80
10 HOSPITA1.S
Type I or II F R '
Type 111-1 -Hour
Type V-l-Hour
11 HOTELS AND MOTELS
Type 1 or II FR'
Tvpe 111-1 -Hour
Type III-N
Type V- 1 -Hour
Type V-"
12 INDUSTRIAL PLANTS
Type I or II F R
Tvpe 1I-1-Hour
T\'pe II-/5tock~
Type 1I1-1-Hour
Type III-N
Tilt-up
Type V-1-Hour
Type V-N
'Add 0 :; percent to total cost fa' each story over three
APART'VtEr>.iT HOUSES
Tvpe I or I' ~ R .
:Gooc' S85 80
T':;Je V- \-1asowI'
lor TVGe WI
CODCI 56970
T\';:>e \'-\\'000 Frame
:Good: S63 0:)
Tvpe I-Basemer' Garage 29 50
2 AUDITORIUMS
TvD€ 10' il =R
hpe li-1-Hour
h:)e Ii-'
-I'pe 1"-, Hour
,;:pe'II-i'.
Tvpe V-1-l--bur
-'.'oe \'- '.
[3 ~\~~~~r', f~'
h;Je ;I-'-Your
:vpe :;~~
Iype .,,~ -Hou'
ivpe 1I1-'l
iV:J€ v~ '-Hov
Tvpe v-,
4 BOWU....C ALLEYS
Tlpe Ii-; -"OJ'
~vpe 1I~i'.
Type jll-'-ho~r
Type 111-"
'vpe V-1 -Ho,,'
5 CHURCHES
1-";:>e I O' :1 F R 78 CO
r,pe!:_1 Hou' 5830
'vpe II~I\." 5540
Type 1I1-1-HOLr 6260
"'\-ae l/i-'. 5960
T\:Je \'-' -'--lour 5690
T"pe \'-' 5420
6 CONVALESCENT HOSPITA1.S
Tvpe 1 or II ~ R . 110 60
Ivpe 1I1--,-Ho~r 7890
Tvpe V-l-HoL;r 71 00
1 Onupan...'" and J"'.pe
! 1
527G
-1820
8490
8090
9630
9190
8490
8080
3950
37 "0
4330
41 30
3690
Occupancy and T~pe
13 JAilS
Type I or II F R
Type 1I1-1-Hour
Type V-l-Hour
14 L1BRAR.IES'
Type I or II F R
Tvpe 1I-1-Hour
Type 11-:">1
Type 1l1-1-Hour
Type IIl-N
Tvpe V- 1 -Hour
Tvpe V-N
15 MEDICAL OffiCES.
Type I or rr FR.
Type 11- 1 -Hour
Type II-N
T~'pe UI-l-Hour
Tvpe Ill-"J
Tvpe V- 1 -Hour
Tvpe V-:">I
16 OFFICESn
Type I or II F R '
Type 11-1 -Hou r
Tvpe 11-"-
Tvpe 111-1-Hour
Tvpe III-N
Type V-1-Hour
Type V-N
17 PRIVATE GARAGES
Wood Frame
Masonry
Open Carports
18 PUBLIC BUILDINGS
Type I or II FR.
Type 1I-1-Hour
Type Il-N
Type lfI-t-Hour
44 90 Type lII-N
30 60 Type V-1-Hour
29 00 Type V-'\I
3380 19 PUBLIC GARACES
32 30 Type I or 11 FR'
2270 Type I or II Open Parking'
30 50 Type lI-N
2880 Type 1II-1-Hour
"Deduct 20 percent ior shell-only buildings
c~.. per
Sq~ar~ Fo<>t.
A\lerage
56 DO
.:.980
8260
5860
5570
598:)
575:)
5470
12960
10780
100 00
8100
6990
6660
6100
5820
Squa~~':::'1
"verag~ o<cupancy '00 TYpe
Tvpe 11I-"
126"0' T\'peV-1-Ho:Jr
115 20 20 RESTAURA"lTS
82 80 Tvpe 111- J -Hour
Type 111-'\1
9280, Type V-1-HoL.r
64 90' Type V-"l
61 60 21 SCHOOLS
70 60 Tvpe I or II F R
6720 Type 1I-1-Hou'
6330 Typelll-1-Hour
6030 Tvpe 111_'
Type V-1-Hou
9480' Type V-('.:
70 50 22. SERVICE STATIOI'\.S
67 20 Tvpe II-N
7710 Tvpe II/-I-Hov
73 60 Type V-1-Hou'
71 80 Canopies
67 90 23 STORES
Tvpe 1 or II FR'
Tvpe 11-1-Hour
Tvpe 11-('.:
Type 1I1-1-f-'0L:'
Type lll-N
Type V-1-HoLr
Type \/-/\
24 THEATERS
Tvpe I or II f R
1830 Tvpe III-J-Ho;.;f
21 70. Ivpe 111-'1
1310 I Type V-I-Hour
: T~'Pe V-I\.
98 90 I' 25 WAREHOUSESm
73 80 T\'pe 1 or II F R
7050 TvpellorV-i-HoLJ'
8260, Type II or V-'1
:890 I Type 111-l-Hour
'300, Tvpe 111_"
7000
EQUIPMENT
3900 AIR COI\DiTIO'\lI~~C i
3050 Commercal 340
22 90 Resldentla:
27 50 SPRIt\:KLER SYSTEMS ~ ~g 1
"'DeduCt 11 percen" lor mnl-'.\-arehouses
5990
5150
1600
1200
8490 I'
5500
5240
6050
5770
5600
53 ':'0
c~" per
Squilri!' Fool,
Ayerage
2630
~2 80
;g 2~ I
6530 I
6220 1
8870 I
632,0 I'
6370
6040
5830 '
55 ~O I
,
I
5260
5280
4640
2030
66..0
4000 '
3920 I
4890 :
461G
3900
3650
8650
62 '0
5970
5650
5400
3930 i
23 20 !
2190 ;
2670
2550
REGIONAl'VtODIFlERS
Th~ follo'\lng modifiers are recommended for use In conjunction With the bUilding valuation diota In addition, certain local conditiO,S 'lEV 'ec~lre ;urther
'lloc,"cat'on; To r..5e these modlf,e's, merely multiply the listed COit per square foot by the appropriate regional modifier For example. to ad;!..s' t,e cost of
a TV;1e I::~' Hour hcte' burld,ng 0: average constructiOn for the Iowa area, select Regional Modifier 0 80 and unit cost irom valuat,on data 56990
080 x 69 90 == $5590 (adjusted cost per square footi
I Eastern U S Modifier Eastern U S. (cont ) ModIfier Central U S, ModIfier I Western U S Modifier I
. ConneCticut 095 Pennsylvania Kentucky o 77 - Arizona 0821
Delaware 084 Philadelphia 096 loulslana 078 California
District ;:;1 Cokrrb-a 087 Other 083 Mleh Igan 084 los Angeles i 00
~lorlG2 074 Rhode lslarld 094 Minnesota 086 San FranCISCO 1 '3
Georgia 068 South Carolma 070 "-1.SSISSIPPl 071 O"her C 94 ~
""alne 081 Vermont 080 M,ssoutl 078 Colorado 081 ,
""arylard 079 Virginia 073 Nebraska 075 HawaII 1 14 I
Massacru>en5 094 West Virginia 082 North Dakota 080 Idaho C 80
New ram psI-we 082 Central U S OhiO 080 Montana 079
"iew lersev 091 Alabama 072 Oklahoma 071 i'l:evada 089
'ew Yor~ Arkansas 070 South Dakota 078 i New MeXLCO 076
'Jew York C 'v 1 16 illinOIS 087 Tennessee 072 Oregon 083 :
Other 087 Indiana 082 Texas 074 Utah 07- ,
"-orth C~roilna 070 Iowa 080 WisconSin 085 Wash I ngton o B8 )
Kansas 074 AI aska 130 ",,"'yom Ing 080
A \\ f\L. \-\ ME tSf D
BLILiJl\iC STA","Do\RDSiMarch-Aprrl. 1991 51