HomeMy WebLinkAboutAgenda Statement 1988/07/12 Item 23
COUNCIL AGENDA STATEMENT
Item 23
Meeting Date 7/12/88
ITEM TITLE: Density Bonus request for a proposed sixty-unit apartment
complex at 1053 Broadway
Resolution/.3c1 ro Approving a density bonus of eight
units for a total of sixty units at 1053 Broadway and
approving a Housing Cooperation Agreement with Mitre Broadway
Partners, property owners
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SUBM lTTED BY: C011lllun i ty Deve 1 0 pmen t Di rec to r 'frJ
Pl anni ng Di rector t. t .
REVIEWED BY: City Manager~ (4/5ths Vote: Yes___No~)
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Mi tre Broadway Partners, developers of a proposed apartment project at 1053
Broadway, has requested a density bonus of eight units under State Government
Code Secti on 65915. Under thi slaw, a 1 oca 1 entity is requi red to either
approve a density bonus or grant the developers other incentives of equivalent
economic value.
_'~ Environmental Review Coordinator conducted an Initial Study, IS-SS-31M, of
~ential environmental impacts associated with the implementation of the
project. Based on the attached Initial Study and comments thereon, the
Coordi nator has concl uded that there woul d be no si gni fi cant envi ronmental
impacts, and recommends adoption of the Negative Declaration issued on
IS-SS-31M.
RECOMMENDATION: That Council adopt a resolution (1) finding that the
project will have no significant environmental impacts and adopting the
Negative Declaration issued on IS-SS-31M, and (2) that the City Council
approve a densi ty bonus of ei ght uni ts for the proposed apartment project at
1053 Broadway, and approve the Housing Cooperation Agreement with the
developers outlining the terms and conditions of the density bonus.
BOARDS/COMMISSIONS RECOMMENDATION: The Design Review Committee approved the
project desi gn wi th the addi ti ona 1 densi ty bonus un; ts at thei r May 5, 1988
meeting, subject to staff conditions and City Council approval of the density
bonus. At their June 22 meeting, the Planning Commission unanimously
recommended that the City Counci 1 approve the proposed densi ty bonus and the
negati ve dec 1 arati on. The Montgomery Pl anni ng Convni ttee, at thei r July 6
meeting, voted unanimously to recommend that the Council approve the negative
declaration. However, they voted 3 to 2 (with 1 abstention) to recommend that
the Council deny the density bonus. Instead, they recommended that the
Counc il offer equi val ent fi nanci a 1 i ncenti ves to t'f ~fVPJ gp"r tn aU"; d oR
increase in density in the Montgomery planning area. :
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Page 2, Item 23
Meeting Date~
DISCUSSION:
Mitre Broadway Partners is proposing to develop a sixty-unit apartment project
for families at 1053 Broadway. Current zoning allows fifty two units, and the
developer requests an additional eight units under the State's Density Bonus
Program. The proposed project would consist of 16, one-bedroom apartments,
and 44, two-bedroom apartments. Section 65915 of the California Government
Code provides that a developer of multi-family rental housing can request a
density bonus over the underlying zone. In exchange for the density bonus, a
developer must provide a percentage of the total units as affordable housing
for low and moderate income households.
In 1985, the Ci ty enacted Ordi nance 12135 whi ch provi des a procedure for the
City to respond to requests by developers for density bonuses under the
provi s ions of Ca 1 iforni a Government Code Secti on 65915. Under our pol icy, a
developer must provide 20% of the total project units prior to the granting of
a density bonus as affordable to low-income households (households at or below
80% of the area median income), and 5% of the pre-density project units as
affordable to moderate income households (households at or below 120% and
above 80% of the area median income). Rents on affordable units are
restricted for 25 years. Affordability is defined as rent levels not
exceeding 25% of the monthly income of households in those low and moderate
income categories. As an alternative to granting the density bonus, the City
- ~ the opti on to grant to the developer other i ncenti ves of equi va 1 ent
Jnomic value. A copy of the City's ordinance is attached for your review.
If the City Council grants the requested density bonus, the developer has
agreed to rent three, l-bedroom apartments for no more than $460 a month, and
seven, 2 bedroom apartments for no more than $575 a month to low-income
households. Additionally, one, l-bedroom apartment would have a rent cap of
$691 a month; and two, 2-bedroom apartments would have a rent cap of $863 a
month and both would be reserved for moderate-income households. Our
ordinance sets maximum rents that can be charged for restricted units. In
reality, the market rate rents are below the maximum of $691 and $863 set for
the moderate-income units. The developer estimates that they will rent
non-low income restricted one-bedroom units for $500 a month and non-low
income two-bedroom apartments for $625 a month. The moderate-income
restriction would be beneficial if market conditions change in the future and
rents escal ate. Currently, a family of four woul d have to have an income of
$27,600 a year or less to be eligible to rent the units reserved for
low-income househo1 ds and $41,400 a year or 1 ess to qual ify for
moderate-income restricted units. Rents could increase as the median income
fi gures for the County increase. The units wou1 d be restri cted for a peri od
of 25 years. The other units can be rented at market rates. Maximum
restricted rents are calculated using the affordable rent formula described in
our family density bonus policy. According to this formula, monthly rental
rates cannot exceed 25% of the gross monthly income of a four person household
whose income falls at 80% and at 120% of the County median income.
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Page 3, Itenr 23
Meeting Date~
Land Use Considerations
The Planning Department has reviewed the project, and the Design Review
Committee has approved the sixty-unit apartment project conditioned upon
Council approval of the eight-unit density bonus. The project would consist
of 44, two-bedroom, 2-bath and 16, one-bedroom, l-bath apartments. The
LBO-acre parcel would contain four separate two-story buildings, with 112
parking spaces (12 garages, 90 open stalls). The project also includes a
recreation area which features a swimming pool, sandbox, and large seating
area (site plan attached).
The project complies with the RU29 (Urban Residential 29 dwelling units per
acre) zone in effect. Eight units over the 52 units permitted under this
zoni ng represents a densi ty bonus increase of 15%. No further revi ew is
required in terms of land use considerations.
The Desi gn Revi ew Committee felt that the proposed densi ty was acceptable
based on the plans submitted by the developer. Park i ng, 1 andscapi ng, open
space, and traffic flow are considered adequate for the 60 unit project.
Conclusion
The issue before the Ci ty Counci 1 is to deci de whether or not to grant a
-'nsity bonus of eight units to the developers of 1053 Broadway or to agree to
fer equivalent financial incentives. According to State law, a local
jurisdiction does not have the option to deny a density bonus request without
offering equivalent financial incentives. All land issues have previously
been approved, and do not require City Council action. If the Council votes
to approve the density bonus, the City will gain 10 affordable housing units
for low-income households and a potential for three affordable moderate-income
household units (if market conditions change) both with a 25 year restriction.
Attached is a Housing Cooperation Agreement between the City and the developer
outl i ni ng the terms and condi ti ons of the densi ty bonus. It is recommended
that the Council approve this agreement if they approve the density bonus.
If Council votes to offer equivalent financial incentives, it is recommended
that they refer the issue to staff to consider various alternatives which
would be brought back to the Council for their approval. Financial
equivalency would have to be determined, and such options as cash payment to
the developer, waiver of associated fees, or provision by the City of public
improvements could then be considered.
FISCAL IMPACT: If the Counci 1 grants the densi ty bonus request, no funds
would be expended. If the Council votes to offer equivalent financial
incentives, General Fund or Redevelopment Agency Low and Moderate Income
Housing Funds, depending upon the subsidy proposed, would have to be utilized.
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