Planning Commission study session recap
The study session was good and I give the Planning Commission high marks for doing their homework, and for the probity of their comments. This was not a hearing where plans were to be cast in stone. The developer was assiduous in taking notes, obviously seeking to find ways to conform to the will of the city (as represented by staff, commissioners and the public) and pull off a smooth project.
The study session forum was educational, and worth watching the video to glean all the things to learn about residential development in town, and specifically about this project.
My interests
My own primary interest here is in seeing the creation of affordable housing. I don’t care as much about design issues, parking, traffic etc. My opinion: for design, taste and style, these things are fundamentally subjective and in the eyes of the beholder; discussions on this topic lead to endless debate with no answers. I agree with Commissioner Cribb’s position that style should be seen in an evolving context, and modern styles should have a place in town.
I have a number of remaining questions from the study session:
- Range of cost of project units? Specific estimated cost for each unit?
- Parking compared to SAHA project on Broadway?26 units and 20 spaces? Parking seems comparable or less for this project.
- How many Accessory Dwelling Units (ADUs*) are above-garage?
- Why not have more ADUs and thereby add more density and potential affordability?
* Accessory dwelling unit, same meaning as: efficiency apartment, cabin, tiny home, loft, granny unit, vacation rental….
Zoning constraints
Apparently, the zoning in place, Sonoma Residential, or R-S zoning, places restrictions on lot size, setbacks etc. and this constrains what the developer can propose for the number and size of units. Zoning effects how much the developer can make for returns, as the number of primary units is limited. Zoning effects affordability because the land is not simply a blank slate where creative people can figure out where to move all the unit pieces for the best affordable (or for-profit) outcome. Thus with zoning, there are some built-in spatial and interest conflicts. These can hopefully be finessed by the developer, city staff and the Planning Commission to satisfy everyone’s interests.
Balancing interests
There are multiple criteria and interests to be met here:
- The developer makes money/ does not lose money
- The city addresses its housing goals of diversity and of serving a middle-income demographic
- The city addresses a known affordable housing crisis
- Style and design consideration are satisfied.
- The project conforms to relevant planning parameters
Serving a middle-income demographic?
My review of the staff report for the project showed that R-S zoning is aimed at middle income earners. This is a General Plan parameter. Middle income earnings today center on the Area Median Income (AMI) of $66,000 per year for a household of two. No list of project unit prices was given; however, a number of figures were dropped, of units at $900,000 and $1,000,000. There is obviously some disconnect here, with city and developer interests at odds.
Previous residential development projects have started with lower prices, and then inched up substantially higher. With the great wealth in San Francisco and Silicon Valley, and Sonoma with a reputation as a top place to live in the US and world, the median county home price of $670,000 could be seen a chump change. With the great demand for Sonoma housing, the developer really has no incentive to voluntarily lower the prices to median income levels, and even if they did, what assurance is there that it would even be median income people who would be sold to? The city has no control over what prices will be if market rate units.
Presumably, a market rate residential development project goes along, satisfies its inclusionary requirement, and then sells market rate units to the highest bidders, for what the market will bear. This common pattern no longer seems apt in the post-fire county housing landscape, and indeed, what for the 2005 city General Plan was “middle income”, is no longer the case, even by a longshot.
Public comment
I made my case in the study session about the middle income, R-S zoning disconnect and this was backed up by Larry Barnett. A number of other public comments seconded this, and one neighbor especially lobbied for reducing the size of the units with multiple bedrooms. How can “middle income” afford a three and four-bedroom market rate unit?
A few neighbors made comments about traffic and parking, but nothing especially bitter or telegraphing major neighbor opposition. Neighbors have been sensitive in the past about hospital parking, and the developer has done outreach to run plans by, and maybe a higher density of ADUs was toned down in response to neighbor concerns.
The following is a review of commissioner comments as they pertain to my own interests of affordable housing.
Wellander
Commissioner Wellander asked Planning Director Goodison for some direction and guidance on the affordability issue. What latitude does the Planning Commission have, he asked? Mr. Goodison replied that the guidance is in the (2005) General Plan and Development Code, “with specific standards.” R-S zoning is eight units per acre. There can’t be more units unless they are ADUs and thus, by state law, escape density restrictions. “More affordable ownership units can be gotten with a condo approach but this runs up against zoning and set back issues.” A planned development alternative could be considered as well, but this would cost the developer more. R-S zoning also has to be compatible with the neighborhood. Goodison later stated, in reply to Wellander’s question, that “every project is a balancing act.” And, to get the variety of lot sizes needed to satisfy the multiple interests at stake here, there may need to be a planned development.
Tangent: Planned development
A Planned Development is basically an over-ride, or a kind of variance for existing zoning, and in the Development Code there are certain provisions that need to be satisfied to be able to grant one. Usually a Planned Development addresses an odd lot size, but it can also be used to meet multiple project and city objectives. In the case of this project, more affordable units, a city benefit, could be horse traded for a higher density of primary units, a developer benefit. A quid pro quo of some kind could be arrived at through a Planned Development, but it would have to pass the Planning Commission, and pass the neighbors.
Tangent: Condominium approach
The inclusionary units, or BMRs, (below market rate units) here will be set within a condo model where the property only includes the house and the land under it. The lots with inclusionary units will have a condo arrangement, set within the larger home owners association for the development. Condo owners, primary unit and BMR, will have their own arraignment of how to deal with the common yard. More condo-type BMRs could go on, and perhaps some local philanthropic entity would arrange with the developer and the Sonoma Housing Land Trust, to get those extra BMR condos arranged… A few local philanthropists give away money…
Barnett
Commissioner Barnett liked the ADU concept, for generating more housing, and observed that having an income property in the rear of the primary unit, will increase the cost of the primary unit, and make it more unaffordable (to the General Plan target demographic of middle income earners.) Upon further discussion, Mr. Barnett was able to ascertain that rental income from the ADU can be figured into a mortgage, so the ADU could be seen as a benefit. However, there is no requirement that ADUs would be used as rentals. As per my public comment observations about the R-S zoning and Housing Element Goal 1.0, to serve a middle-income demographic, Barnett observed that it was not likely that a Development Code update could be required as part of this project.
Jansen
Commissioner Jansen noted that the size of the affordable units, or BMRs, was considerably smaller and out of proportion to that of the primary units, and that it was customary for inclusionary units, BMRs, to be more proportional to the primary, market rate units’ size. Ms. Jansen also noted that some (or all?) of the ADUs are above garage. This could mean then, that the ADUs are essentially garage lofts, and instead of calling them ADUs, a more apt term might be garage loft spaces, or GLSs.
Bohar
Commissioner Bohar expressed concerns over design-level issues, and would like to see one-story units along MacArthur.
Corrado
Commissioner Corrado took up the concern over R-S zoning and the disconnect about serving middle income earners, and noted that less than 1% of housing built now is at an area median income or AMI-affordable level. This means, realistically, less than 1% if built housing is for middle income earners. The Development Code should be adjusted here, she said. Ms. Corrado, along with other commissioners, suggested reducing the number of bedrooms in the primary units, as such multi-bedroom units are out of scale for the target demographic. Corrado said, of this project, “I think we have a chance to really help the town, for the future.”
Cribb
Commissioner Cribb noted that one lot would sell for $1,000,000. Mr. Cribb said a well-off two earner household would need $200,000 down to buy this, and would pay $4000 a month, and would need to make $12,000 a month, or $168,000 a year. This is almost triple the median, middle income earner level.
Cribb went on to make a case of how project lots and units could be affordable by design. For example, with rental income from the ADU, and a reduced size primary unit, the mortgage payment could come into the range of the city’s target middle income demographic. Cribb is suggesting ways here that a market-based approach can be successful in meeting the city’s housing needs. Former planning commissioner Willers made this point in various ways before as well.
Mr. Cribb stressed the need for a “true mix” of housing. “We don’t have a mix there”, he said of the project site, the former hospital South Lot property. Mix up the unit square footage so that price points get mixed up too. “True affordability is what R-S zoning is all about”, he said. Cribb encouraged the building of a real community, which is not just a bunch of million dollar homes.
Cribb was fine with two-story units; it fits other two-story projects in the neighborhood, he said.
Felder
Chair Felder presided well, as usual, and said also seconded that the size of the primary units should be reduced.
Housing Land Trust
Finally, Dev Getches of the Sonoma Housing Land Trust was present and spoke to the commission. She is involved because the inclusionary units will be part of the Housing Land Trust program. This means the inclusionary units will be bought and owned by the occupants. This is an innovative program, that serves the workforce, and preserves affordable units in perpetuity, and demonstrates forward thinking and good will by the DeNova developers. The Housing Land Trust stewards the whole buying and occupancy process. Director Goodison said that if the city would do it, the oversight would not be as thorough, and the affordable unit’s deeds would expire after 55 years.
Conclusion
The upshot to the middle income, R-S zoning disconnect here is that the city maybe must proceed with a fiction that a middle-income demographic is being served by the planning process, when actually the city is serving high income home buyers.
Enough planning commissioners took an interest in the middle income – affordability disconnect to, in my opinion, provide a substantial study session direction to the developer, and to the city. I think the developer got the message, to balance in more of the city’s real, General Plan-codified housing goals, to conform to Housing Element language.
How the developer will do this will be seen in their next iteration of the project. A planned development seems like the way to go, to satisfy all interests here. It is a plan that could make for more affordable units, and as a work-around for lot size, spatial, and zoning constraints. However, the developer has to ask for this; it is not something the city can require.
With or without a Planned Development, more ADUs could go in, since the ADUs do not count against the zoning density of eight units per acre; this is a potential perfect work-around to satisfy multiple interests’ goals. An ADU with each unit (20 ADUs) would allow each primary unit to have a rental income that would then count as an owner benefit in a mortgage contract. With a variety of unit sizes and price points, this would satisfy many interests at once, if DeNova can pull it off.
However, DeNova may have already made a deal with the neighbors to reduce ADUs to the current level. If this is the case, then a scenario emerges like that with Satellite Affordable Housing Associates Altamira Family Apts. project on Broadway: neighbors against higher density infill that is necessary to tackle both climate change and the housing crisis.
As things stand with the current planning iteration, the inclusionary requirement, i.e. four small BMRs is not enough for this project to address true affordability. Some creative solutions need to be made here.
A condo BMR alternative is another possibility, in conjunction with the Housing Land Trust, and with additional alternate funding from a currently unknown source.
In some off the record comments with the developer, I came to understand that DeNova would not be producing multiple sets of alternative plans, but rather would work on one set of plans that they would then be trying to get passed. Realistically, the next stage will be to see what DeNova produces, and how it balances the different interests at stake. The project is a balancing act.
One possible strategy would be for the developer to take more to a break-even level of returns, and work for the greater good that way. Contractors and staff could be paid full boat, just have DeNova take 10% instead of 15%, for example. Most of the city and public actors here are volunteering themselves anyway, some developer sacrifice might be appropriate. No harm in asking. This is the pie in the sky hope, that DeNova would take a haircut with market rate millions on the table.
Another option is Cribb’s affordable by design. How this would be done, by Planned Development, more ADUs, or however, is up to DeNova at this point.
DeNova may pull a rabbit out of its hat and transcend the zoning issues and try to meet social good interests as well as its own bottom line. After all, this was only a study session!
I agree with Commissioner Corrado that this project has the chance to be a good win-win for everybody. Certainly, a number of iterations will be forthcoming, especially after Commissioner McDonald puts in his two cents. Now is an opportunity for the public to familiarize themselves with residential development issues, and to return to future meetings educated and ready with apt comments.
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