2016/07/13 Council Agenda Packet

Agenda Subject: Impact Fee Deferral and Exemption Amendments Date: 6/14/2016 2 Staff Report to Planning Commission The proposal,as drafted,does not grant an automatic impact fee exemption,and the exemption is constrained to lower income groups (50%AMI or below)than what is allowed under state law(80%AMI or below).Each exemption will need to demonstrate the financial need and community benefit.The decision to grant the exemption rests with the Mayor or designee,with school district approval required for a school district exemption. For school districts,at the current time there is not an impact fee charged for studio and 1-bedroom units in multi-family projects. Many very low-income housing projects will include that size unit, resulting in no impact to school district funds. However,it is possible that 2+ bedroom units targeting that income group could be proposed.School districts would have to weigh the financial need and community benefit as part of their decision making process. Timing of Fee Payment: Allowing the fee to be paid after the building permit process has been concluded introduces some risks to the city and schools for collection of the fees. If the building is not sold after it is completed,the city would trigger payment at 18 months from issuance of the building permit. If the fees are not paid,the only enforcement option the city will have is to send the matter to collections or foreclosure proceedings. Alternatives to consider could include: 1. Scope of Impact Fee Deferral: At the Planning Commission workshop, members asked whether consideration was given to expanding the deferral option to include more single-family units (>20 units),multifamily housing, commercial and industrial development. The proposal was drafted to comply with state legislation and to meet the September 1st deadline. Expansion of the program has ALTERNATIVES AND not been requested from anyone at the time,but consideration OPTIONS (TO) might be given to targeting certain areas or development to meet other community objectives. CONSIDER(ED): 2. Impact Fee Exemption Proposal: The impact fee exemption for affordable housing is not a mandate and could be rejected.During the initial drafting of this exemption, staff did provide the school districts with an opportunity to comment. While comments on the final ordinance have not been received, little has changed from the original proposal and school objections may still be raised.Their concerns expressed in early May was the cost of providing additional classrooms is real and immediate and impact fees cover a small portion of the costs. Page 6 of 7 31