Reso 2631 RESOLUTION NO. 2631
OF THE PLANNING COMMISSION OF THE CITY OF CUPERTINO
RECOMMENDING THAT THE BELOW-MARKET RATE HOUSING
PROGRAM PROCEDURAL MANUAL BE REVISED TO PERMIT THE
PAYM ENT OF A FEE IN LIEU OF PROVIDING UNITS PRICED
AT BELOW-MARKET RATES, SUBJECT TO THE POLICIES
OUTLINED IN EXHIBIT A.
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PASSED AND ADOPTED this 29th day of April , 1985, at a regular
meeting of the Planning Commission of the City of Cupertino,
State of California, by the following roll call vote:
AYES: Commissioners Adams, Mackenzie, Sorensen, Szabo,
Chairman Claudy
NAYS: None
ABSTAIN: None •
ABSENT: None .
ATTEST: APPROVED:
/s/James h. Sisk /s/John Claudy
James H. Sisk John Claudy, Chairman
Planning Director Planning Commission
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RESIDENTIAL DEVELOPERS 66 EXHIBITA"
IN-LIEU FEE POLICY
A. Purgose
1. The Below Market Rate (BMR) Program is currently
inflexible. Permitting the payment of an in-lieu fee
will provide an alternative to contributing a BMR unit,
thereby making the Program more flexible.
2. Some developments are inappropriate for inclusion in the
BMR Program. An in-lieu fee will enable the City to
create affordable housing opportunities in developments
better suited for the provision of affordable housing.
B. Policies
1. A developer may be permitted to pay a fee in lieu of
providing a BMR unit in the following circumstances:
- Where provision of a unit may result in practical
difficulties or unnecessary hardships not commonly
experienced by residential developers in the City,
or;
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- Where provision of a unit would be inconsistent with
the purpose of the BMR Program.
• It shall be deemed a hardship if all construction costs,
excluding profit and land costs, significantly exceed
$70 per sq. ft. for a BMR unit.* It shall also be
deemed a hardship if the size of a BMR unit would
significantly exceed the following:
No. of Bedrooms Maximum Footage
Studio 650 sq. ft.
1 Bedroom 950 sq. ft.
2 Bedroom 1250 sq. ft.
3 Bedroom 1350 sq. ft.
2. All requests to pay a fee in lieu of providing a BMR
unit will be reviewed by the BMR Committee and shall be
subject to City Council approval . The BMR Committee and
City Council will not be required to hold public
hearings to consider such requests. However, prior to
approval of any request, the City Council must find that
payment of an in-lieu fee will not significantly reduce
the long-term supply of affordable housing in the City.
•* This figure shall be adjusted quarterly at a rate equal to that
in the Bank of America's Single-Family Residential Cost Study,
beginning with the study dated January 1985.
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3. The in-lieu fee shall be based on the following formula:
{At/B1!)x(1/14)x{Total of sale prices far all unitsiii - total construction costs for projectin
11110 portion of the fee shall be paid as each unit in the
project is sold. The minimum payment per unit shall
equal the total fee divided by the number of non-BMR
units in the project.
4. Construction costs may include all costs, except profit,
which can reasonably be projected at the time of final
inspection. Generally, the total of "hard" costs,
financing and on/off site improvements, specifically.
excluding land costs, shall be assumed to be equal to or
less than $70 per sq. ft. , as adjusted per Policy Bi. A
developer will be required to substantiate any costs
exceeding this amount. Land costs shall be excluded
from construction costs where a - 20% density bonus was
granted. Otherwise, land costs may be included
proportional to the density bonus received. For
example, given that 20% is the maximum density bonus
permitted, if only a 57. density bonus was granted, then
three-fourths of the land costs may be considered
construction costs.
5. The fees collected shall be placed in the General Fund
and shall be used to promote and subsidize affordable
• ownership housing.
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i . A = Number of BMR units waived.
ii . B = Number of BMR units originally required.
iii . Base on the appraised value of each unit.
iv. Base on the definition of construction costs in Policy 4.
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