Planning Commission - Regular Meeting

Monday, October 13th. It's now 6:00. We'll call the meeting to order. Um, if you have any communications from the public, we have slips over there to fill out and give them to Benson, our secretary, and um, you can have when we have the uh, um, public comments and we'll call you up. With that, we'll call to order and ask for the roll call. Commissioner and Ceil here. Commissioner Keith here. Commissioner Num here. Vice Chair Breeningham here. Chair Baron

here. Let the record show that Kelly our planning director is here. Selene Sevilla our senior planner is here and Katherine Reed our our city attorney assistant city attorney is here. Ya Benson our commission secretary. And we also have I didn't see the name. I sorry we go. Thank you. All right, with that we'll stand for the pledge of allegiance. Please ready to repy for all. Okay. Do we have any communication proposal or emails or

I've received none. None. Okay. And we'll go into approval of the minutes. Can I get a motion? Any corrections, changes on the minutes or from June 23rd. I'll make a motion to approve the minutes. Second. Second. Mike and John. Thank you. All in favor? Hi. Okay. Business item number two, 2024 general plan annual progress report. Uh 24 2024 housing element progress report.

All right. Good evening, chair, members of the commission, members of the public that are here with us tonight. Um thank you for being here. So uh this item is the general plan annual progress report and housing element report. This is for calendar year 2024. Uh members of the commission and public may be familiar with this item. This is brought forward as a receive and file annually and it is required by state law that we do so. Um just to refresh our memories on why we're looking at this item. Every year the city is required to submit a status of our general plan and progress in implementation and our progress in meeting our share of our rea. You may be familiar with that acronym. um in our local efforts to remove governmental constraints to the maintenance, improvement, and development of housing. So, after we go through the efforts to develop our housing um element of our general plan, the state wants to check in with us every year and see how we're doing. So, that's what this item is. Um it is dismal. Uh so, what we have uh for calendar year 2024, I'll start with the permits that were actually issued. Um four I did miss a zero there. four, we issued four residential building permits in calendar year 2024 and three of those were accessory dwelling units. So, three ADUs, one residential um unit. All of those were infill and that's it. Um for entitlement, we did a little bit better. Uh we had 170 single family detached units that were entitled. 168 of those were uh in the summer comments development. 120 of those were in the enclaves, which is that town development that got entitled over fifth and l. Um so that's what we did. That's what we're reporting to the state. Um I wanted to provide some perspective. It's it was

really interesting to me um the trend that we've had on the number of units that have been issued throughout the years. So, I pulled the last 10 years so we could look at them just to understand where we've been and we're going from 20204 to 2020 I'm sorry 2014 to 2017 we issued zero units and then it jumped way up uh 2018 we uh we issued 86 2019 286 2020 342 that was a busy year uh 2021 was 94 started dipping back down 2022 was Uh last year 2023, interestingly enough, uh our last reporting year, we did all ADUs. So we we issued 12 ADU units, no single family. And in 2024, as we just went over, was a total of four. So you can see where it was flatlined, it went way up, and it's going way back down. Um and the trend, if you're familiar with development in Kalamisa, you're looking at the permits for JP Ranch, Summerland Ranch, and Singleton Heights. So those three um tracks comprised somewhere around 800 units. Um they're now built out or at least phase one of summer one is built out. We're waiting on phase two. Our last planning commission meeting at this commission approved the refacing plan for summerland. Um and so we may see these numbers pick up in coming years. Um but again just wanted to provide the commission some perspective for what our building permit activity is doing over the last decade. Okay, this is a receipt and file. Um, you don't need to necessarily do anything with this information. It's just for you to know. Um, it was submitted to HCP and to the office uh, excuse me, the governor's office of planning research OPR earlier in the year and this will go to city council

for November 17th meeting as well. And for this, I'm available for questions should you have any. Okay. Yep.

It's receiving file. Uh 418 a recommendation that the city council amend that municipal code section in uh 18.130.070 070 to add in le of fees um as alternative to means to compliance to satisfy the city's inclusionary housing ordinance and establish in fee um staff.

Yes, thank you chairman. It's quite a mouthful. Okay, so this item is um as you stated is a zone text amendment and draft ordinance for an inclusionary housing in Murphy. Okay. So, as a little bit of background, uh the inclusionary housing ordinance itself is not new. It was adopted May 2nd of 2011 by ordinance number 304 and that's what established our current inclusionary housing section in our municipal code um 18.130. So, you may wonder why do we have this um ordinance on the books at all? And it was enacted as a condition of HCD's approval of our fourth cycle. you may recall um working on the approval and adoption of our sixth cycle housing element. So fourth cycle was from 20 excuse me 2006 to 2014. Um so it was a condition of the fourth cycle housing element where in the city stated that it would adopt an inclusionary housing ordinance to meet a small percentage of the housing needs for low to moderate income households. So we told the state fourth cycle we're going to do this and so staff at that time brought forward the ordinance to make sure that we complied with the uh policies and goals stated in that housing element. Um interestingly enough when I was digging through the documents turns out we uh adopted the ordinance in May of 2011 and by May of 2012 we suspended the ordinance. Um it looks like there was some concern that by enforcing an inclusionary housing ordinance, we would actually be um harming development of all housing. And so the council took an action at that time to suspend the inclusionary housing ordinance from May of 2012 until January of 2017. So they did a pretty robust 5-year suspension of the ordinance due to a quote distressed real estate market. Okay. So, as of January 1st, 2017, the ordinance was back in effect. And here's a little overview of what it requires.

So, the inclusionary housing ordinance requires that at least 5% of the total lots or units in a residential development be offered for sale as inclusionary units restricted for owner occupancy by lowincome households. So, what does that mean? If there is a development project that is proposed and there are 20 units, 5% of those have to be inclusionary. So, projects 19 or less don't have the requirement. Uh projects that are rental uh excuse me, rental product also don't have the requirement. So if there's uh town homes for rent or apartments for rent or something like that, um they also don't trigger the requirement. It's just for sale units, 20 units or more, 5% of those have to be affordable.

Um when we look at the definition of, you know, you might wonder, well, what is a lowinccome household? Low income might mean a lot of different to different people. Um, this I found very interesting. Um, so our municipal code defines lower income as one that earns 80% of the area median income or AMI. And according to HCB, the 2025 median income household for Riverside County is $103, $900. So that means a lower income household in 2025 for four people is defined as one that that earns 83 about $83,000 a year for a family of four. So that may be different than what some folks expect is you know the typical picture of what a low-inccome family looks like but in 2025 cost of living housing all of those things food groceries etc. That definition brings us all the way to $83,000 is considered a lowinccome family. Again, if you've got a family of four, so it's just put some perspective for who would be um occupying such units. Um applicability, we talked about this for the 20 or more units. Um and one note here, if you wonder about our larger projects in the city, they are um subject to our inclusionary housing ordinance. So Mesa Verde and Summerwind, they each have uh development agreements that govern um the inclusionary housing requirements of those specific plans. Okay. So how so you're a developer or you bring forward a project that has this obligation. How do you comply? Um there are currently three ways in which um the applicant comply can comply with the ordinance. And the default method of compliance is going to be construct the units within the project boundary. So somewhere on site construct five units that meet this requirement. Um state law

does require that we provide at least one alternative means of compliance. We were so nice we offered two. So there's two other ways that you can comply. That would be construction offsite. So not within your project boundary but somewhere else in the city. Build those units. Um and then the third means of compliance is dedication of land elsewhere in the city. It can't just be any you know kind of dinky plot of land. It has to um have the value of that land would need to be roughly equivalent to the cost to construct the number of units on site. So there would have to be some sort of substantiation um that hey we're going to dedicate this land to you but it's valuable enough where it makes sense to be um you know roughly equivalent to that cost. So, uh those are those three methods and just to to recap, construction onsite, construction offsite or dedication of land. Those are the three uh methods of compliance that are currently in place. Um we and let me back up a little bit. So um through our many discussions with the development community there's been um frequent um requests to implement an inclusionary housing inli um currently these three methods of compliance require the development community to do something. They have to build it. They have to deal with uh deeds, you know, deed restrictions. They have to deal with the construction schedule. um they have to um acquire land and do this analysis of whether or not um the land is roughly equivalent. And there's just more to it. An inloo fee allows the development community to pay a fee, satisfy their obligation, and um for lack of a better term, be done with it. They've satisfi satisfied the obligation, paid the fee, and that's what they'd like to do. Um, and so we went back and forth as staff for over

actually a number of years on whether or not we were going to bring this forward and eventually did decide that we wanted to propose this to the planning commission, the city council as a a as a fourth method of compliance uh within our inclusionary housing um ordinance. And um so let's talk about what changes would go into the code if this um comes into effect. So the first addition to the Calam municipal code would be just um just this addition that an enloff fee is allowable. Um I highlighted this by right um portion of the language because um you know the development community might wonder well do I have to enter into a development agreement? Do I have to pay a certain fee? Is there some lobbying I need to do to be allowed to avail myself to this fee? The answer to that is no. Um it would be by right. So, uh staff would um inform the developer, hey, you have this you have this obligation. You've got four ways to comply. What do you want to do? And if they um pick an inloo fee, they can do that if approved. Okay. The other items of note within the proposed revisions to the municipal code um is that the amount of the inloo fee shall be calculated um as established by resolution adopted by the city council as may be amended from time to time. So, I thought that was important to highlight because the city council sets the fee by resolution and as you'll see in the staff report and packet, there is a provision that contemplates an annual um increase um due to CPI and so forth. Um the other item of note here is that the inloo fee shall be paid concurrently with the payment for a building permit for a market rate dwelling unit. So that means I'm coming in, I want to build, I don't know, our builders sometimes do um their phases. Maybe they're going to

pull eight to 10 homes to construct at a time in our tracks. And so they would be paying the inloo fee concurrent with the permit that they are pulling for that market rate. They would need to pay uh that inloo fee at that same time as opposed to grading permit or occupancy. There are different timing hooks that we see in the development um kind of world. So, this would be a building permit timing hook. Um, and again, we went over this, but this would be um that affordable housing would be restricted to units um, excuse me, households earning 80% of the AMI or less. So, that doesn't mean it has to be at AMI at the 80% AMI. It would have to be 80% AMI or less. So, there are different kind of stratified income levels. Um, but that would be the top end would be 80%. That's how the current uh municipal code reads as well. Okay. Another item of note here in addition to the municipal code if approved is that the inclusionary housing plan um will in we'll need to include the total square footage of the proposed finished res finished residential living area excluding garages. So we're not going to have them pay a fee on the garage square footage um but for all market rate units. So essentially the applicant would need to provide the square footage um of that finished residential living area and that's how we would calculate the obligation the financial obligation owed for the in fee. Okay, that brings me to the fee amount. Um we worked with place works. So we have Steve Gunnels is the chief economist for place works here this evening prepare the report for us. Um and um the fee recommendation based on that report would be $3.40 per square foot of finished floor residential area. Again, excluding um garages. And there's a typical here at the bottom of the page

for a typical 2395 foot home, the total fee would be about $8,100. And in total, um, the fee would generate $163,87 for the city to contribute for the construction of each affordable housing unit. Um, so, and I kind of skipped over an important piece of this. I said developers like to pay a fee and by all means kind of be done with the obligation. Well, the city gets the money. Now what, right? Um, kind of begs the question. So the city would be required per the ordinance to establish a special fund where we would keep the money um and it would acrue over time. So we have a large amount of residential uh track units, multif family units, etc. that are kind of in the pipeline. Um and so we would acrue the funds over time, put them in a special fund, and then the city would um partner with an affordable housing developer, which is it's very much a niche um industry where there are folks that, you know, their whole bread and butter, what they do for a living is they build affordable housing. Um and so those folks, affordable housing developers, they leverage kind of a a different suite of financing mechanisms to be able to bring a project to life. And those include uh federal low-inccome um tax credits, conventional bank financing, and then they frequently come to cities with their handout and say, "Do you have any in fees?" Um we've certainly have that have had that happen. Um and we've had to tell the, you know, those affordable housing developers, no, we don't. Um and so we haven't had any deed restricted, um inclusionary housing units constructed in the city. Um so we didn't have any funds to be able to contribute. So that is what the fee amount supposed to be and again with an annual CPI adjustment. Um we have a recommendation here. So what's uh being recommended is that the planning commission do two things with this resolution. You would um one

recommend that the city council approve the zone text amendment adopting the ordinance adding the inloo fee payment as an alternative means of compliance to the ordinance. And two um there's a draft city council resolution in the packet um actually establishing what that inclusionary housing fee would be and uh next steps. City council is anticipated to hold a public hearing to consider approval of this item on November 17th, 2025. So, if the commission or any members of the public um are interested in seeing um this action through to the end, that's that proposed date for the next step. For questions, I'm available. Um, again, we also have Steve Gunnels here from Place Works available to answer questions you may have about the calculation and Katherine Reid is here from the city attorney's office. With that, turn it back over to you, chairman.

Great. Thank you very much. Excellent. Um, so since this is a city initiated thing, it would be the applicant is the city for that one there. Yep. So, we have public testimony. Um, do we have any? We've received no testimony. No public testimony. Okay. Um, so just close the public hearing then and uh we'll go to commission discussions. Um, John questions. Appreciate all the work put in by you and your staff. A lot of a lot of work. So, it's good to see you. Thank you.

Thank you, Kelly. great job of explaining it both today on the phone and then tonight as well so that we can understand it. And um uh the um do we find that we're going to have any opposition to this in any way legally or otherwise? That's my only other question that I didn't get to ask.

Sure. Um so I'll just say that we have not received any public comment to date. There is another opportunity for a public hearing. We are um advertising these meetings in the newspaper and um in all of the you know required postings etc. That being said um what we are finding is that folks that may oppose a development related fee would most likely be our development community. So we might have builders, brokers, developers, etc. that um come and say you're adopting a new fee. What are you doing? and you know have some sort of opposition. Um however in this particular instance this is kind of interesting right because this almost leaves them of an obligation where again um well you don't have to pay this fee go ahead build the units within your project right and they go I don't want to do that I don't want to pay I want to pay fee so what we're actually finding or what I'm finding in working through this process is actually appears to be um something that is supported by our development community and um hopefully brings forth market rate units quicker because it allows the uh developers to kind of not worry about the inclusionary housing requirement. Did I get that right?

Development community. We do have some members of our development community here. There you go. Sure. Um Rich, please. Chair, I'd ask that you reopen the public hearing.

Okay. Reopen the public hearing. Summerwind Commons uh project and uh by way of example, we have 168 uh uh small lot zero lot line homes approved as our phase two for Summerwind Commons. And uh with that we were um tasked with about eight units of affordable housing uh to be done the inclusionary housing and also being part of the summer ranch specific plan. There's another 3850 homes as part of it. And the specific plan also called for 150 uh affordable units to be placed somewhere in the specific plan. But without the lack with the lack of a master developer in place after the Suncow bankruptcy, we all became a gaggle of adjacent property owners to try and decide who would do it, where we do it, how we do it, who would fund it. Uh, and we talked to a lot of different affordable housing developers and and from that sense I got involved with Kelly and we kind of with the overlay district and tried to um, you know, figure out where we could find a home for our requirements and and how because as a developer we basically a land developer sells to a a builder once your map is approved. Uh and the affordable as they mentioned is a whole different type of capital stack to create. It's different sources of financing. Um it's it's hard to assess a land value to it because of the rents are lower and if you had built normal apartments you'd be upside down. So there wasn't much of a land residual value there. Uh and the Yinloo fee allows us to kind of know what our

exposure is. Uh possibly use a CFD uh for some of the uh of the fees and it makes it a smoother more integrated process for everybody involved in developing homes and specific plans and outside of specific plans in Calama. Uh so anyway, that's and we are also interested in the affordable housing uh higher density site that you guys put into the overlay district. We like to maybe throw our hats in the ring on that. So anyway, that's kind of uh that's it. And I think talking to everyone, we all we all tried to work together for the infrastructure for the common uh bonding and then you know we all know what happened with Oak Valley and it got delayed and slowed up and everything else. So, so we're all trying to just kind of sort it out and uh I think Paul Oifer is here not he's not here to object you know shop off's not here to object we're here to support it you know so so anyway that's our two cents

great thank you and I guess to to Rich's point we did um make available the draft report to all of kind of the large stakeholders that Rich mentioned so there's someone wrench specific residential developer, the Mesa Verde developer and so forth. We said, "Hey, this is coming forward. Are you interested in attending?" So, um, just so you know, our large stakeholders were informed at this meeting this evening. Right. Okay. I'll close the public hearing again and then back to the commission again. CH, any questions? No questions or concerns. Thank you for breaking that down for us. Thank you. Thank you.

Okay. Well, first off, I guess how is it working out in Summerwind when since they've already built, do we build inclusionary housing there or what have they done on that? Do we have low-income people that are moved in there already?

Um, no. So, again, the inclusionary housing ordinance was temporarily suspended for a number of years. Um, and so that for whatever reason when those maps uh well, let me back up. Um the maps were originally approved before the ordinance came into an effect came into an effect and then when the entitlements were coming through I think the staff at that time um didn't place the requirement on the first phase of summer with the understanding that um the future phases would meet the obligation and so the intention is that phases two through five um Rich's um portion of the specific plan which is commons that they'll comply but the current um 633 lots. There was no inclusionary housing um obligation met.

Basically grandfathered in. They came in before. Sure.

Okay. Um because one of the things I also started thinking it because it comes down to developers is going to be the cost per unit. So I got a couple. Was there ever a thinking of just asking the developers to sell for cost for their exclusionary units? Because I know we can change the insides, but there's very little in this day of age for the construction on the inside. I mean, besides appliances that you're going to do that you can really make that much of a difference in the money from regular market home for what they can cut down on the low income. So, I'm just curious, was that ever an option or ever looked at instead of because I know the other thing is you can't take something from somebody without proper compensation. And I haven't seen anything on the law books yet that we've had legal precedent on this. So to head off that, I was just curious would perhaps if a developer just sold these units at cost, at least that would get us down to a better rate than what they're going to jump them up or was that ever an option or was that ever looked at?

Um, so that was never posed as a option by anyone in the development community. I think we were looking at what the ordinance prescribed as the means of compliance. Um, in terms of whether or not there's any precedent, um, there are some jurisdictions in the area that have an inclusionary housing fee already adopted and a few of note are Redlands, uh, Highland and Fontana. Um, so I think it is a legally defensible means of compliance.

Yes. Um, under the housing law, it provides that there can be alternative means for inclusionary housing. And as Kelly described, there are already three alternatives in place. And this is just an additional alternative that developers can choose instead of, you know, on-site development, off-site development, or dedication of land. Um, the ENLO fee has actually um been up for discussion by the state legislature in recent years requiring transparency on websites. So, they're very much aware of this alternative that local jurisdictions are putting in place in their municipal codes. So, it is a legally defensible alternative for the city to take.

Well, it's been done, but it has not gone through courts yet or nobody has brought it into attention of a court. Uh, I mean, that's my understanding right now. And that's that's not atypical. There are plenty ADU laws, for example. There are plenty of um laws that have just been enacted where there's no case precedent on it. So, it's not unusual. We do that a lot. Yeah. It's it's not unusual to not have any case precedent on a specific area of housing law.

Okay? Because my main concern like I said goes with taking something without proper compensation that they have to whereas we have t fees are actually paying for streets, sidewalks, whatever else there. The fees that we are attaching to building permits because I built and I went through all the dang fees. So I'm just saying seeing this actually is a fee. I understand it the purpose of it and all but as far as a builder and developer honestly he's not getting anything. So we are taking from him on this and I understand that the state looks at it as well you've got all these other houses to make your money. However, my understanding with law and everything else through my real estate experience that doesn't cut the mustard because this is actual every single home is one of his properties and if we are dictating that he has to do that and he's going to take a loss. I did see where we have something where they can appeal or whatever and we could amend it. But that's my biggest concern because like the price points on here, you're not going to find a $400,000 new built house. So the our price points as always like I always every time we have these. We're not even in the ballpark here unless we have a real estate going down and that's not happening. I'm sorry in my opinion. So that's one of my biggest concerns. I don't want to be the test case city where we're going to get somebody to say, "I'm sorry. I'm not going to give you my stuff. You want to buy it from me or whatever, I'll sell it to you at cost, but you want to go ahead and do this."

No. And I I understand it. I think that's why the study is so essential to how the fee is established. And it's a very comprehensive study to for developers to understand how this cost was analyzed and how did the city come to this number. It's justification. I understand that. It's just you're still taken without. So well not not to disagree on that.

No, no, it's fine. It's fine. Just just going back to housing law allows for this alternative. And if we go back to that plus the study that we have, we do have a defensible argument. I understand on that. Um, so then we'll have to change the fees yearly, right? I saw the CPI. So that would be the first of the year or whatever. And then then that will just have to stick for the year and then it will be revisited by city council every year to see if we need to raise it or whatever.

So our fiscal year begins July 1 of every year. And I think the way we set it up is that we take a look back in April annually. Correct, Steve? Um and then it would be brought forth to the city council for consideration annually um with some of our other regular fee increases such as MSHP always seems to go up annually uh temp and so forth.

Okay. Another question is I know we had reduced our building fees since that really kicked our teeth in over a decade ago. What is this doing to the overall price then? because with all the fees that we have to get for the building permit, temp fees, uh the extra 8,000 and that doesn't sound so bad, but on the top of everything, are we now asking developers to chuck out 3545,000 in fees? I mean, I haven't looked at what our water meters are lately, but I'm guessing when I built two decades ago almost, it was $1,200 or 12,000. Yeah. 12,000.

Yeah. So, I mean, just with all their things, are we going to be pricing out builders now just adding fees like what we stepped into before when we had to cut fees back because everybody started getting a little greedy with the money on the developers and that really shot us in the foot. So I'm just curious, have we looked at what is what are we looking at at total cost?

Yeah. So a couple of points. So this isn't um a new requirement. Again, this has been in place since uh 2011 2012. Um this is an optional inluff fee. they could construct the units um or on-site or offsite or dedicate the land. Um this is meant to be um you know to assist housing development and so forth. Regarding um connections to to water and sewer, we'd have to work with our partners over at Ukipa Valley Water District, South Mesa Water Company. Um we don't necessarily have all of the information on their up-to-date connection fee. Um, I can tell you that currently, uh, for one single family home, development impact fees for all of the city fees, not sewer, not water, not TU, not MSHCP, it's about $18,000 for one single family home. Um, we are going through um an update to our uh development impact fee study. Um, so that will be on a council agenda in the in the near future um in the next, you know, kind of however year or so. Um but so this this again this is a fee that either uh they could choose to pay or they could choose to comply with the ordinance in another one of the alternative means of compliance.

All right. Thank you. Awesome. Thank you, Mike. Um my one question that I had on the thing because I was trying to wrap my head around the the numbers there and at $3.40 a square foot per living area. So was is that are we considering that's a turnkey number? That means drywall, roof, everything's all done and finished house $3.40. I think this is a fabulous opportunity for Steve Gunnels to approach the podium

and talk to us about the fee uh study that he prepared. Oh, somebody turned it on for me. So, your question was about the how how the fees applied the $3.40. Yeah. So when the

kind of sort of figure for the living area which would not include like the you know your um your fireplace or the typically you have the fireplace in a niche or TV niche or whatever on one side of the wall wherever that's at that's not counting and I they did it all over in UKIPA and I just have a hard time getting around those and uh you know and then not count you know the garage and stuff. Well you know there's 480 almost 500 square feet in a garage too but at $3.40 40 cents. Is that a turnkey number? That's the number. It's not based on the cost to build the market rate house.

It's based on the square footage of house that the they're applying for a building permit to construct and we're excluding the garage. Um just that's the way it's done sometimes. Uh because you get you get some smaller lot subdivisions where they don't have big garages, bigger lots with bigger garages. It it gets a little convoluted. Um we could include the garage and that would we we've just got a dollar amount. We're dividing by the average built house size. If we put the garage in, then that number would come down a little, but you're applying it to a bigger number. You're still we're still looking to get about $160,000 out of every 20 market rate houses on average. But see, my problem with that is that you if you got 20 market rate houses or 20 houses that you're going to build and you're only going to get 160,000 of it, you're not going to get a single house built. It's going to take multiple units because of the cost of materials. When I was looking at this and I was looking the framing alone for an average house, just the framing, wood, roof, trusses, walls, and everything like that. When I was doing the uh the numbers, um when I got this in here, um I was looking at that. It was $26 a square foot for just framing.

Yeah. Concrete's 166 bucks a yard right now. And and you know, all the other things that go up, stuckle and stuff like that. I was like, how are we going to build these houses with this with this fee being at this price?

Yeah. So, what we did is we looked at So, we maybe there's two things we're talking about. We're talking about the the market rate housing, the marketing rate market rate developer is going to build and that may be a 2400 square foot house, all the costs that go with that. And then there's the housing that the affordable housing that would eventually get built. and that is we're looking at what the affordable developers are going through in Riverside County to build their affordable units and it's coming out at about the numbers in here about just over $400,000 per unit. So, we've talked to affordable developers um and they basically have three pools of money they draw from. There's low-inccome housing tax credits. They get conventional bank financing because the people who move into the the affordable housing, they're paying rent. It's just lower than market rate, but they're paying rent. So, some of that rent is going to pay back that conventional loan. And then the other piece of the pie is they're going out to charitable trusts. They're going out to the county. They're going to the city. They're bringing in three, five, eight different funding sources. And for them, it's a real challenge because the low-income housing tax credits may take a year, may take two years, may take three years. So, they need to go to the county and get a commitment from the county for some money and get the county to hold on to it for three years while they wait to get their tax credits. So, what the affordable developers have told us is they're comfortable that they can get the low-inccome housing tax credits. They're comfortable they can get the bank financing. If through this fee, the city was able to step in with and alleviate them having to go to

three, four, eight different organizations to get money. That would make it so much easier for them to actually finance and get started on building. And that's the 160,000 is the average across these developments uh affordable housing developments that have been funded through um through the state. So that's that's what we're looking to create is that piece and what they're um building is multifamily. So while the market rate developer may be building single family house 2400 square feet the affordable developer is building a multif family unit maybe 1,000 square feet maybe 900100 you know whatever it may be and they are coming in at about 400,000 uh per unit to do that. So that's and so for the market rate developer, if you looked at what they could sell that house for to what the affordable what the price in incomequalified household could pay, it may be$1 150 to $200,000. They're writing off all the rest of that.

Um and then when market rate developers do this, they're usually also stepping in to provide down payment assistance to get the household to qualify. So for them, this this is beneficial because they're not losing that huge value on that unit. It's $8,000 per market rate unit. It's $160,000 for an affordable unit rather than writing off $400,000 on the cost of doing a single family home themselves. So, if I can say that just in a slightly different way for the for the chairman. So, the $163,000 that we're talking about um financing for this uh supposed project of 20

um the 163 is not anticipated to cover the entire cost of a unit. Right. I think Steve is saying is that it is a piece of the pie where an affordable housing developer would need to bring in a lot of different funding sources and there's what you know they call a gap. So, this would finance the gap in what they're able to leverage through conventional bank um loans and through low-inccome tax credits. And then there's this there's this delta, right, where they they're like, well, shoot, we're short. And so, this amount is meant to cover that that shortage, not the entire cost of the unit.

Yeah. As you said with like for example with Fontana, I built a lot of houses in Fontana and we had the second crew that we went down and we're building apartments in Fontana to satisfy our our low-inccome housing in Lua fee or you know thing like that not in Louis fees but for building because we actually built them. Um we did apartments a lot of apartments for every of the houses that we built what we had to do in Fontana. I did that back in the 90s a lot but in le of fees have been nothing new in my 50 years of doing construction I mean I I mean they've always been around so I just never knew the exact mechanisms I just know what the costs were because but that was always handled by office so that's why I was kind of curious as to the numbers but since you explained it I I get it now with all the different funding sources so thank you I appreciate that um with that I don't have anything else with that so I guess we can go to a motion or

anybody want to make a motion or I make a motion to approve or recommend. Want to read the whole thing? Do you want me? No. Okay, I will for practice. Which one is it? Um, number three. Okay.

Oh, there you Planning Commission adopt PC resolution 2025-08 recommending that the city council number one approve zone text amendment 25-02 and adopt ordinance number 418 adding inloo fee payment as an alternative means of compliance to satisfy the city's conclusionary housing ordinance and number two adopt a resolution establish an inclusionary housing inlue fee I'll second. All in favor? I I I. Fantastic. There we go. That should make things easier. Next time I'm just going to second it. Okay. Live and learn.

Live and learn. There you go. Okay. Commissioner comments and reports. John

a vacate. Thank you. No, thanks for the work, planning director and all of their staff. Appreciate it. Um, no. Uh, just thank you to the staff. Mike, um, yeah, great to be back. Hopefully we can do this more often. Um, yeah. So, but yeah, that's all I got. Thanks as always. Yep. Once again, good job staff. Thank you very, very much. We appreciate it. And it is nice to be back. Um, with that we'll go to planning director's comments.

There we go. Hopefully we can have more meetings, but you saw that building permit data. They're just not coming in, right? Uhu. Um, so just one item of note. Um, maybe Asa can help me out with the time, but we will be having our annual trunk or retreat at the Summerwind Trails Park. Um, is it 5:00 PM on um, Friday, October 31st. So, I hope you can all make it out to that event. That's all I have. Thank you. Thank you. Okay, with that, um, we'll go ahead and adjourn the meeting to the planning commission meeting of Monday, November 10th, uh, 2025 at 6 o'clock in this