CC Resolution No. 20-037 Amending Below Market Rate Housing Mitigation FeesRESOLUTION NO. 20‐037
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CUPERTINO
AMENDING BELOW MARKET RATE HOUSING MITIGATION FEES
WHEREAS, to mitigate the impact of new development on the need for
affordable housing within its boundaries, the City of Cupertino (the ʺCityʺ)
has since 1993 implemented a Below Market Rate (BMR) Housing Mitigation
Program, comprising a non‐residential Program and a residential Program, as
described in the Housing Element of the General Plan, which requires the
payment of housing mitigation fees by non‐residential development and
residential projects with six units or less or with fractional unit requirements
and requires the provision of moderate‐income and median‐income housing
in residential developments with seven or more units (collectively the
ʺHousing Mitigation Programʺ); and
WHEREAS, the City Council of the City of Cupertino initiated the Nexus
Study Update project with the approval of the 2014‐2015 Work Program on
May 6, 2014, and on March 27, 2015, the City published notice of the initiation
of proceedings in the form required by Government Code Section 66474.2(b);
and
WHEREAS, the City’s existing housing mitigation fees for non‐residential
development are divided into the following land use categories:
Office/Research & Development (R&D)/Industrial, Hotel, and
Commercial/Retail; and
WHEREAS, the City has included self‐storage and warehouse land uses in the
Office/R&D/Industrial category, but in light of the characteristics of those uses,
many jurisdictions implementing similar housing mitigation fee programs
have recognized separate categories for those uses;
WHEREAS, to further implement the affordable housing goals, objectives,
policies, and programs of the City’s Housing Element, and to ensure that the
housing mitigation fees do not exceed the actual affordable housing impacts
attributable to the types of development projects on which the fees are
imposed, the City Council has received and considered the report from Keyser
Marston Associates, Inc. (KMA) dated January 2020 and entitled “Supplement
to the Non‐Residential Jobs‐Housing Nexus Study” (KMA Report) evaluating
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the impact of self‐storage and warehouse land uses on demand for affordable
housing in the City; and
WHEREAS, the KMA Report uses a widely accepted, appropriate
methodology to determine the maximum amount of a fee needed to fully
mitigate the burdens on affordable housing created by the types of
development evaluated in the Report; and
WHEREAS, the housing mitigation fees set forth in Section 2 below are the
maximum amounts identified in the KMA report to fully mitigate the burdens
created by new self‐storage and warehouse development on the need for
affordable housing; and
WHEREAS, at least ten days prior to the date this resolution is being heard,
data was made available to the public indicating the amount of cost, or
estimated cost, required to provide the service for which the fee or service
charge is levied and the revenue sources anticipated to provide the service,
including general fund revenues, consistent with Government Code Section
66019; and
WHEREAS, at least fourteen days prior to the date this resolution is being
heard, notice was provided to any persons or organizations who had
requested notice, consistent with Government Code Section 66019; and
WHEREAS, notice of the hearing on the proposed fees was published twice in
a newspaper of general circulation in the manner set forth in Government
Code Section 6062a consistent with Government Code Section 66018; and
WHEREAS, a duly and properly noticed public hearing was conducted by the
City Council on April 21, 2020.
NOW, THEREFORE, BE IT RESOLVED:
Section 1. After careful consideration of the KMA Report, facts, exhibits, staff
report, testimony and other evidence submitted in this matter, the City Council
finds as follows:
1. The foregoing recitals are true and correct and incorporated into this
resolution by this reference.
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2. The purpose of the housing mitigation fee is to mitigate the burdens
created by new self‐storage and warehouse development projects on
the need for extremely low, very low, low, median, and moderate‐
income housing.
3. All housing mitigation fees collected shall be deposited into the Cityʹs
BMR Affordable Housing Fund (AHF) to be used to increase and
preserve the supply of housing affordable to households of extremely
low, very low, low, median, and moderate incomes (including
necessary administrative costs).
4. The KMA Report utilized a widely used, appropriate methodology to
determine the maximum justified fees and inclusionary percentages.
5. The findings of the KMA Report have been considered and are hereby
incorporated by this reference into this resolution, and the City Council
finds that new non‐residential development will create a need for
affordable housing by:
a. Aggravating the existing shortage of affordable housing by
reducing the supply of land for affordable housing and
increasing the price of remaining land.
b. Increasing local employment at extremely low, very low, low,
median, and moderate‐income wage levels, which increases the
demand for and exacerbates the shortage of housing available to
persons at those income levels.
6. As shown in the Housing Element, there is a need in the City for
housing affordable to households of extremely low, very low, low,
median, and moderate incomes.
7. The facts and substantial evidence in the record establish that there is a
reasonable relationship between the need for affordable housing and
the impacts of the types of development described in the KMA Report
for which the corresponding fee is charged, and that there is also a
reasonable relationship between the feeʹs use and the type of
development for which the fee is charged, as is described in more detail
in the KMA Report.
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8. The KMA Report set forth cost estimates that are reasonable for
constructing affordable housing, and the fees expected to be generated
by new development will not exceed their share of contribution to these
costs.
9. Adoption of this resolution is exempt from the California
Environmental Quality Act because the fee amendment is not a project,
in that it is a government funding mechanism which does not involve
any commitment to any specific project (CEQA Guidelines Section
15378(b)(4)).
10. Because self‐storage and warehouse development projects are already
subject to the City’s housing mitigation fee, the fee amounts set forth in
section 2 do not constitute new fees, but rather reflect a reduction in
existing fees as applicable to those types of development.
Section 2.
1. City Council hereby adopts the following non‐residential housing
mitigation fee categories and amounts, while retaining all existing
mitigation fees adopted with Resolution 15‐036, as follows:
Non‐Residential Housing Mitigation Fees
Self‐storage, employee unit provided *$0.56/sq. ft.
Self‐storage, employee unit not
provided
*$1.18/sq. ft.
Warehouse *$41.67/sq. ft.
*Fee amounts shall be adjusted annually on July 1 of each calendar year
based on the percentage increase in the Consumer Price Index for All
Urban Consumers for San Francisco, California
2. Annual Adjustment to Housing Mitigation Fees. Fees shall be
evaluated annually in accordance with the City’s review of all fee
schedules.
3. Effective Date. This Resolution shall go into full force and effect on July
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1, 2020
PASSED AND ADOPTED at a regular meeting of the City Council of the City of
Cupertino this 21st day of April, 2020, by the following vote:
Vote Members of the City Council
AYES: Scharf, Paul, Chao, Sinks, Willey
NOES: None
ABSENT: None
ABSTAIN: None
SIGNED:
___________________ ________
Steven Scharf, Mayor
City of Cupertino
_________________________
Date
ATTEST:
_________________________________
Kirsten Squarcia, City Clerk
_________________________
Date
4/27/2020
4/27/2020