Well, the election is over, and we have two new City Council members as a result. I suspect I’ll have plenty to write about as their new term of office begins! I think that they take their seats at the special City Council meeting scheduled for November 16. Not having previously watched the process of initiating new members and saying goodbye to the outgoing ones, I plan to make an effort to be there.
I do want to congratulate both Shelly Masur and Janet Borgens, our new council members, on their wins, along with incumbent council members Ian Bain and Alicia Aguirre on their reelections. I would also like to thank Vice Mayor Roseanne Foust, who lost her reelection bid, and Councilwoman Barbara Pierce, who has completed her fourth consecutive term and thus was termed out, for their service. Regardless of who you voted for in this election, being a member of our City Council cannot be an easy job, and I am grateful for those who do it.
During the campaign I read somewhere that each of the six people running for our four open City Council seats had called for slowing the pace of downtown construction. I’m going to presume that that was not just empty campaign rhetoric, and thus I expect that Councilman Bain and Councilwomen Masur and Borgens, at least, will actively work to slow the pace of development in Redwood City. Of course, within the Downtown Precise Plan (DTPP) area, anyway, development was already likely to slow somewhat due to the fact that we are starting to hit the caps set out for development within the area. Although these caps don’t preclude further development, any proposed development beyond the DTPP limits must be accompanied by an Environmental Impact Report (EIR) crafted specifically for that project: the blanket EIR that was created for the Precise Plan only covers development within the limits set forth by that plan.
As a reminder, the Downtown Precise Plan limits are:
- Office: 500,000 square feet. We’ve pretty much hit this limit already.
- Residential: 2,500 housing units, 1,613 of which have already been built or at least approved for construction. If we also count the 92-unit condominium development that has been proposed for 603 Jefferson (at the corner of Jefferson Avenue and Bradford Street), only 795 more housing units can be built under the cap. And as I’ll get into shortly, some 375 of those will likely be set aside for low-income housing.
- Retail: 100,000 square feet. Only 15,291 square feet have been built or approved for construction, so we have quite a way to go here. Given that we badly need more retail downtown, I’m guessing that the City Council won’t do much foot dragging if a developer comes forward with a significant retail project in the DTPP area.
- Hotel: 200 rooms. No rooms have been built or even proposed within the area, so this is one category where we are not doing well. But given the 177-room Courtyard by Marriott hotel that is well underway over on Bair Island Road, Redwood City is at least getting some new hotel rooms, if not downtown.
At last Monday’s City Council meeting (October 26), the City Council proudly moved forward with a proposal to slap an Affordable Housing Impact Fee on new residential and commercial development within the city. This fee, which will help replace the Redevelopment Agency funds taken away by the State of California, would be assessed based upon the project’s leasable square footage:
- Condos, apartments, and office buildings: $20 per square foot
- Single family homes, townhouse, duplexes, and triplexes: $25 per square foot
- Hotels, retail, and restaurants: $5 per square foot
Prior to opening the topic up for public comment, the mayor made sure to emphasize that residential projects would only have to pay the fee if they resulted in five or more net new units: building one single family home, for instance, would not trigger the fee. As well, office, hotel, retail, and restaurant buildings less than 5,000 square feet would be exempt.
The Affordable Housing Impact Fee monies would, as the name implies, go entirely to help pay for affordable housing in the city. City staff estimates that the program could bring in more than $3 million per year, assuming that the economy remains strong, based on the recent pace of construction.
So on the one hand, the City Council is working to enact a program that will greatly assist in the effort to build new low-income housing (or, as a number of council members seemed to get excited about, purchase and rehabilitate existing low-income housing stock). And on the other hand, they are talking about slowing the pace of development, thereby reducing the amount of money that the program will bring in. Talk about unintended consequences…
A couple of developers noted that simply by tacking on yet another fee (developers already pay a Transportation Impact Fee to improve our streets, and residential developers also pay a Parks Impact Fee to improve and expand our parks), the cost of development in Redwood City may become too prohibitive and thus developers may simply stop proposing new projects altogether. While the fee is certainly going to alter the economics of new projects, and may cause some developers to rethink their proposals, it seems unlikely, given all of the positive factors that have led to the current development boom, that development will come to a complete halt. Incidentally, given the developer’s comments, I wouldn’t be surprised to see a lawsuit or two aimed at the city around this program, so it may be a while before any Affordable Housing Impact Fees are actually collected.
California’s Redevelopment Agencies were shut down at the beginning of 2012. Regretfully, it has taken since then to come up with this program. If this fee had been in effect when the Downtown Precise Plan was put in place, that 500,000 square feet of office space alone would have resulted in $10 million in fees. Since the Impact Fee is not limited to Redwood City’s downtown, the new Courtyard by Marriott that I referred to earlier would have paid almost $540,000 all by itself. Now that we are close to hitting our DTPP limits, however, and now that the City Council is talking about perhaps pressing the Pause button on future development, we may not see all that much in the way of fees from future downtown development. The fee program, as proposed, cannot be applied retroactively and would only apply to projects whose applications were incomplete or not yet submitted as of September 21, 2015. Thus, Blu Harbor, where 402 apartments are currently under construction, does not have to pay the estimated $6.4 million in Affordable Housing Impact Fees that could have applied (note that the $6.4 million figure is only a rough estimate; I don’t have the leasable square footage numbers for that project).
Housing projects that include some low-income units can have the fee reduced or waived, depending upon the number of units. And, as you would expect, low-income housing projects will not have to pay the fee. This is good news for the 20-unit Habitat for Humanity condominium project that should soon begin construction at 612 Jefferson Avenue. Similarly, whatever low-income housing project is eventually built on the city-owned Bradford Street property not only won’t have to pay the fee, it hopefully will be receiving money from the fund that the Affordable Housing Impact Fees will go into.
Although I’ll go into the project in more detail once one of the alternatives has been chosen, before last Monday’s meeting the City Council received a high-level briefing on the seven proposals that it received for its Bradford Street property. You can watch the presentation yourself (go here, and then click on the Video link on the row labeled “Special Study Session Meeting Agenda” for October 26, 2015). Alternatively, you can browse through the basic proposals yourself; you’ll find links to them at the bottom of this page. In summary, though, the seven proposals all aim to provide housing to extremely-low and very-low income households (extremely-low income households make 30% or less of the median family income, while very-low income households make between 30% and 50% of the median family income). All of the projects propose public open space along Redwood Creek, and all (I believe) would include a childcare space on site. Other amenities vary depending upon the given proposal, as does the number and size of the housing units provided: the seven proposals range from 56 to 137 housing units. All of which are very much needed! The City Council seemed very pleased with the proposals, and is eager to see this particular development project, at least, move forward. As am I.
I mentioned that of the 795 housing units can be built in the DTPP area before the cap is reached, 375 of them will be low-income units. Why? Because one of the last items on the City Council meeting agenda was perhaps one of its most important: a proposed amendment to the Downtown Precise Plan that would require that 10% of the housing units allowed by the plan be designated as low-income housing. If you do the math—10% of 2,500—you may wonder where I came up with a figure of 375. Well, the one change that the City Council made to the staff proposal was to increase the percentage from 10 to 15. Back when we had a Redevelopment Agency, we were required to set aside 15% of new housing for low-income households, so Vice Mayor Foust suggested that 15% was the figure we should be using now. This was unanimously agreed upon, and city staff was directed to craft the proposed amendment. Once the DTPP change is approved by both the Planning Commission and the City Council, the number of market-rate housing units that can be built under the DTPP residential cap will drop by 375, less any affordable units already built under the plan.
Last Monday’s City Council meeting was all about affordable housing. It was very long (more than four hours!) but the Council was not about to give the subject short shrift. Although they didn’t consider more immediate solutions such as rent control or ways to limit renter evictions, they are at least making some real efforts to deal with the longer-term problem of affordable housing within Redwood City. At the same time, though, by putting the brakes on development, they may counter those efforts. Talk about unintended consequences!