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R113561 City Council Meeting: August 24, 2021 Santa Monica, California RESOLUTION NUMBER 11356 (CCS) (City Council Series) A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SANTA MONICA AUTOMATICALLY ADJUSTING THE AFFORDABLE HOUSING UNIT BASE FEE FOR NEW MARKET-RATE MULTIFAMILY DEVELOPMENT PURSUANT TO SANTA MONICA MUNICIPAL CODE SECTION 9.64.070(B) BASED ON CHANGES IN CONSTRUCTION COSTS AND LAND COSTS WHEREAS, on November 8, 2005, the City Council amended Santa Monica Municipal Code Section 9.56.070, now renumbered Section 9.64.070, to provide that commencing on July 1, 2006, the Affordable Housing Unit Base Fee shall be automatically adjusted annually by City Council resolution based on changes in construction costs and land costs; and WHEREAS, in order to implement the Council’s decision, staff formulated a specific method of measuring changes in construction costs and land costs; and WHEREAS, this proposed methodology was detailed in an April 24, 2006 letter prepared by Paul S. Silvern of HR&A Advisors, Inc. (“HR&A”) on behalf of the City and approved by the Council on June 13, 2006; and WHEREAS, pursuant to this methodology, on June 27, 2006, the City Council adopted Resolution No. 10149 (CCS) which established an affordable housing unit base DocuSign Envelope ID: 2412C5EE-CBA2-44DA-85C9-ED36AC80E491 2 fee for condominiums of $28.15 per square foot and an affordable housing unit base fee for apartments of $24.10 per square foot; and WHEREAS, pursuant to this methodology, on July 24, 2007, the City Council adopted Resolution No. 10229 (CCS) which incrementally adjusted these base fees by $1.41 per square foot for new market rate condominiums and $1.21 per square foot for new market rate apartments; and WHEREAS, pursuant to this methodology, on July 23, 2008, the City Council adopted Resolution No. 10329 (CCS) which incrementally adjusted these base fees by $1.33 per square foot for new market rate condominiums and $1.14 per square foot for new market rate apartments; and WHEREAS, pursuant to this methodology, on September 8, 2009, the City Council adopted Resolution No. 10422 (CCS) which incrementally adjusted these base fees by $0.80 per square foot for new market rate condominiums and $0.69 per square foot for new market rate apartments; and WHEREAS, pursuant to this methodology, on September 28, 2010, the City Council adopted Resolution No. 10529 (CCS) which incrementally decreased these base fees by $0.41 per square foot for new market rate condominiums and $0.35 per square foot for new market rate apartments; and WHEREAS, pursuant to this methodology, on June 14, 2011, the City Council adopted Resolution No. 10578 (CCS) which incrementally adjusted these base fees by DocuSign Envelope ID: 2412C5EE-CBA2-44DA-85C9-ED36AC80E491 3 $0.66 per square foot for new market rate condominiums and $0.56 per square foot for new market rate apartments; and WHEREAS, pursuant to this methodology, on September 11, 2012, the City Council adopted Resolution No. 10705 (CCS) which incrementally adjusted these base fees by $0.26 per square foot for new market rate condominiums and $0.22 per square foot for new market rate apartments; and WHEREAS, pursuant to this methodology, on August 27, 2013, the City Council adopted Resolution No. 10763 (CCS) which incrementally adjusted these base fees by $0.26 per square foot for new market rate condominiums and $0.22 per square foot for new market rate apartments; and WHEREAS, pursuant to this methodology, on August 26, 2014, the City Council adopted Resolution No. 10833 (CCS) which incrementally adjusted these base fees by $2.34 per square foot for new market rate condominiums and $2.00 per square foot for new market rate apartments; and WHEREAS, pursuant to this methodology, on August 25, 2015, the City Council adopted Resolution No. 10902 (CCS) which incrementally adjusted these base fees by $1.71 per square foot for new market rate condominiums and $1.46 per square foot for new market rate apartments; and WHEREAS, pursuant to this methodology, on August 23, 2016, the City Council adopted Resolution No. 10985 (CCS) which incrementally adjusted these base fees by DocuSign Envelope ID: 2412C5EE-CBA2-44DA-85C9-ED36AC80E491 4 $1.31 per square foot for new market rate condominiums and $1.13 per square foot for new market rate apartments; and WHEREAS, pursuant to this methodology, on August 8, 2017, the City Council adopted Resolution No. 11069 (CCS) which incrementally adjusted these base fees by $1.89 per square foot for new market rate condominiums and $1.62 per square foot for new market rate apartments; and WHEREAS, pursuant to this methodology, on August 14, 2018, the City Council adopted Resolution No. 11130 (CCS) which incrementally adjusted these base fees by $1.99 per square foot for new market rate condominiums and $1.70 per square foot for new market rate apartments; and WHEREAS, pursuant to this methodology, on August 13, 2019, the City Council adopted Resolution No. 11191 (CCS) which incrementally adjusted these base fees by $0.92 per square foot for new market rate condominiums and $0.79 per square foot for new market rate apartments; and WHERAS, for 2019 to 2020, the calculations determined that no incremental adjustment to base fees was needed and so no resolution regarding base fees was adopted; and WHEREAS, Resolution No. 10149 (CCS), Resolution No. 10229 (CCS), Resolution No. 10329 (CCS), Resolution No. 10422 (CCS), Resolution No. 10529 (CCS), Resolution No. 10578 (CCS), Resolution No. 10705 (CCS), Resolution No. 10763 (CCS), Resolution No. 10833 (CCS), Resolution No. 10902 (CCS), Resolution No. 10985 (CCS), DocuSign Envelope ID: 2412C5EE-CBA2-44DA-85C9-ED36AC80E491 5 Resolution No. 11069 (CCS), Resolution No. 11130 (CCS), and Resolution No. 11191 (CCS) thereby established an affordable housing unit base fee for condominiums of $42.62 per square foot and an affordable housing unit base fee for apartments of $36.49 per square foot; and WHEREAS, in accordance with Santa Monica Municipal Code Section 9.64.070 and the City Council’s approved methodology, staff has calculated the required incremental adjustment to these base fees based on the changes to construction costs and land costs that have occurred since the calculations demonstrating that no adjustment was needed were undertaken last year; and WHEREAS, on August 2, 2021, the City published a notice that at the August 24, 2021 City Council meeting, the City Council would consider a proposed resolution to incrementally adjust the affordable housing fee that private developers pay to the City for the production of affordable housing based on this methodology and that the staff analysis was available for review in the City Clerk’s Office; and WHEREAS, the City republished this notice on August 9, 2021; and WHEREAS, a copy of staff’s analysis has been available in the City Clerk’s Office for public review since August 2, 2021; and WHEREAS, based on this analysis, a decrease in the amount of $0.99 per square foot of the current Affordable Housing Unit Base Fee of $36.49 for apartments and a decrease in the amount of $1.15 per square foot of the current Affordable Housing Unit Base Fee of $42.62 for condominiums would be appropriate, DocuSign Envelope ID: 2412C5EE-CBA2-44DA-85C9-ED36AC80E491 6 NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF SANTA MONICA DOES RESOLVE AS FOLLOWS: SECTION 1. The current Affordable Housing Unit Base Fee for new market rate condominiums of $42.62 per square foot established by Resolution No. 10149 (CCS), Resolution No. 10229 (CCS), Resolution No. 10329 (CCS), Resolution No. 10422 (CCS), Resolution No. 10529 (CCS), Resolution No. 10578 (CCS), Resolution No. 10705 (CCS), Resolution No. 10763 (CCS), Resolution No. 10833 (CCS), Resolution No. 10902 (CCS), Resolution No. 10985 (CCS), Resolution No. 11069 (CCS), Resolution No. 11130 (CCS), and Resolution No. 11191 (CCS) shall be decreased by $1.15 per square foot of floor area. SECTION 2. The current Affordable Housing Unit Base Fee for new market rate apartments of $36.49 per square foot established by Resolution No. 10149 (CCS), Resolution No. 10229 (CCS), Resolution No. 10329 (CCS), Resolution No. 10422 (CCS), Resolution No. 10529 (CCS), Resolution No. 10578 (CCS), Resolution No. 10705 (CCS), Resolution No. 10763 (CCS), Resolution No. 10833 (CCS), Resolution No. 10902 (CCS), Resolution No. 10985 (CCS), Resolution No. 11069 (CCS), Resolution No. 11130 (CCS), and Resolution No. 11191 shall be decreased by $0.99 per square foot of floor area. SECTION 3. Resolution No. 10149 (CCS), Resolution No. 10229 (CCS), Resolution No. 10329 (CCS), Resolution No. 10422 (CCS), Resolution No. 10529 (CCS), Resolution No. 10578 (CCS), Resolution No. 10705 (CCS), Resolution No. 10763 (CCS), Resolution No. 10833 (CCS), Resolution No. 10902 (CCS), Resolution No. 10985 (CCS), Resolution No. 11069 (CCS), Resolution No. 11130 (CCS), and Resolution No. 11191 DocuSign Envelope ID: 2412C5EE-CBA2-44DA-85C9-ED36AC80E491 7 (CCS) shall remain in full force and effect and shall not be superseded or altered by this resolution in any way. SECTION 4. The City Clerk shall certify to the adoption of this Resolution, and thenceforth and thereafter the same shall be in full force and effect on November 1, 2021. APPROVED AS TO FORM: _________________________ GEORGE S. CARDONA Interim City Attorney DocuSign Envelope ID: 2412C5EE-CBA2-44DA-85C9-ED36AC80E491 Adopted and approved this 24th day of August 2021. __________________________ Sue Himmelrich, Mayor I, Denise Anderson-Warren, City Clerk of the City of Santa Monica, do hereby certify that Resolution No. 11356 (CCS) was duly adopted at a meeting of the Santa Monica City Council held on the 24th day of August 2021, by the following vote: AYES: Councilmembers Brock, Davis, De la Torre, Negrete, Parra, Mayor Pro Tem McCowan, Mayor Himmelrich NOES: None ABSENT: None ATTEST: _____________________________________ Denise Anderson-Warren, City Clerk DocuSign Envelope ID: 2412C5EE-CBA2-44DA-85C9-ED36AC80E491