Planning Commission - Regular Meeting

Oh, there you go.

Thank you, everyone. It's 07:00, so we'll go ahead and commence today's planning commission meeting. And we shall first start off with call to order.

Thank you, chair vice chair Habib. I'm sorry. What are we starting with? Call. Sorry.

Sorry. Roll call.

Roll call. Okay. Yes. Vice chair Habib. Here. Commissioners Mueller.

Here.

Tonda. Here. Lovato.

Here.

Lake?

Here.

Downey? Here. Commissioner Wilson has an excused absence.

Perfect. And can we please do the declaration posting?

Tonight's meeting agenda was duly noticed and posted in accordance with government code section five four nine five four point two.

Great. And we'll go ahead and start off with the pledge of allegiance. Commissioner Mueller, melias.

Pledge of allegiance, we will be by The United States Of America,

Okay. So we'll go ahead and move on to the the next part of our agenda, which is a public comment period. Members of the public are entitled to address the planning commission concerning any item within the Morgan Health Planning Commission subject matter jurisdiction. Public comments are limited to no more than three minutes. Except for certain specific exceptions, the commission is prohibited from discussing or taking action on any item not appearing on the posted agenda. So do we have anyone online in the public right now that would like to address the planning commission for items not on today's agenda?

I don't see any hands.

K. We shall move on. We don't have any, public hearings, but any changes from the commission to the orders of the day?

Nope.

Nope. It's good.

Seeing none. I will go ahead and move on to other business. First, we're gonna start off with the economic development outlook followed by a presentation on housing and homelessness.

And tell me the audio from this.

Yes, ma'am. You mute your computers? Are both your computers muted? Are you getting feedback on your monitor?

Yeah. Anybody else getting feedback on

the monitor? No. That's not my mic. It's is there a volume of the sensor?

Yeah. That we're not sure.

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Okay. I think you're good.

Alright. Keep going. Sorry.

So for those of you following, if you're getting any feedback on the bottom left where it says video source, just keep it on presentation.

Good?

Yes.

You okay? Good evening, commissioners. Matt Matt Mayhood, economic development director, city of Morgan Hill. The pleasure to be in front of you tonight to give you an update on the things that are happening in economic development. I'd like this instead of be just standing and delivering a a PowerPoint that's filled with slides and information that actually we get to a point and have a conversation about economic development.

Because what ultimately I'd like to leave here today with some feedback from the planning commission, right direction, wrong direction, and perhaps giving us clarity on on areas where we can provide additional leverage points in economic development. So our city's economic development effort, we continue to be focused on implementing the economic development economic blueprint that was adopted in 2017. This this strategic effort is focused to build the long term physical sustainability of a city while improving the quality of life for residents. The goal within that blueprint is the generation of jobs at revenue to support city services. So if you look at a slide here about the general fund, economic development supports the general fund.

69% of the city's general funds are derived from taxes, which are the TOT tax, which comes from hotels, sales tax from retail sales, and property tax. This, slide kinda gives you an indication that for every dollar a resident or visitors pay pays, we're fighting for pennies, here in the city, for to fund our general fund. So, for property tax, for every dollar, a resident pays in their property tax, the city sees a dime of that or 10%. Sales tax, it's literally 1p on the dollar, and the TOT tax, which is an additional tax the city has put on each hotel room stay, is 11¢ on the dollar. Just to give you an idea of retail impact, this is a slide you may have seen before, but your typical hotel will generate enough TOT tax to support the hiring and the retention of 1.5 police officers.

A healthy productive auto dealership will generate enough revenue and sales taxes to support 2.5 officers or more. And if we're ever lucky enough to have a Costco, you're probably talking four to six officers depending on the success of that operation. So breaking it down within the sales tax categories, you can see that sales tax alone accounts for 25% of the general fund. You can see the largest portion of the sales tax generation comes from autos and transportation. We're very lucky to have three successful auto dealers in in Morgan Hill.

We also have have had and continue to have RV retailers in the city. So you can see it's a large percentage. Also, fuel and service stations, 11.2% is a significant contributor as our restaurants and hotels at 13.1%, building and construction at 9%. And then that state and county pool, that number comes from online sales. Retail online so it's money that's spent online ultimately gets distributed out to the cities through the state and county pool.

I should note well, I'll I'll mention this later. This is our tran transit occupancy tax. You can see in 2019, just before the COVID nineteen pandemic, the city had really achieved kind of an all time high in TOT revenue collection, and we simply haven't recovered. Our occupancy rates continue to be down. Our room rates are up slightly, but we're still really struggling as is all of tourism and business travel in that hospitality sector.

Last year, we did see a bump in 2023 where numbers were coming up. That was kind of a post COVID kind of rush people getting out and starting to travel again, but things have kinda leveled off and business travel simply hasn't come back. 2024 and 2025 are literally thousands of dollars apart in year over year results. So a little clearer vision on the four industries that we focus on with the economic blueprint. First and foremost, we're focused on innovation and advanced manufacturing.

So we're we're focused on growing our existing companies that we have here. We have some great head companies that are located and headquartered in Morgan Hill. We wanna keep those companies here, and then we wanna attract new industrial users and grow professional jobs. 20% of the jobs in Morgan Hill 20% of the jobs in Morgan Hill are actually in manufacturing. Retail, we wanna continue to grow those retail offerings and strengthen the commercial nodes.

As you saw from the the sales tax and the general fund numbers, obviously, we wanna continue to grow the revenue in retail. And and also it's a quality of life issue, giving the services that residents want in the city of Morgan Hill. Tourism to grow leisure, agricultural agricultural wine, and recreational tourism. We have an amazing outdoor sports facility, an amazing aquatic center. We have some local amazing parks and opportunities for hiking and biking and the wine industry as well.

So we're always trying to figure out ways to draw local visitor or visitors to Morgan Hill, have them spend their dollars here, and then leave. And then lastly, health care, grow and foster medical service in the city of Morgan Hill. We've had some good success in the last eighteen months, and we'll talk a little bit more about this. This is both a jobs and opportunity to bring great quality jobs to Morgan Hill, but also provide the types of services that residents want. We continue to hear that they're getting tight kinda tired of traveling north to go get quality health care.

So within that the four sectors that we're focused on, I'm gonna focus go through each sector and kinda talk about the challenges and the opportunities. So first, innovation and advanced manufacturing. So, you know, most of you, probably all of you work and are are familiar with what's happening and the economic climate in Silicon Valley. The the climate has slowed for Silicon Valley expansions, and and we're we're we're feeling that in Morgan Hill. Interest rates have really affected the flow of investment capital.

In late twenty twenty two, when interest rates started going up, companies started putting more of their cash into their balance sheets instead of investing in real estate and expansions. And flat out, you know, high construction costs even for tenant improvements for those looking to do expansions and or moving into a shell building, tenant improvements can be very cost prohibitive. But the opportunities are pretty clear for us in Morgan Hill. We have the best class a industrial space in Silicon Valley. We have amazing space at Cochrane Technology Center.

The buildings are already powered with 4,000 amps. They are ready. And then, you know, you look at that vacancy rate and you say, oh my gosh. It's 15.7%. That's a high for us.

We've historically been at, like, 34%. If you go back, you know, seven to ten years, we had no inventory. We were losing companies who wanted to expand. So our opportunity is really this vacancy rate that now we have well over a million square feet of class a space where as the economy improves and we get more certainty that we have a good mix of product type and size, and we can attract users. And we were speaking with one of our developer partners earlier today, and they they described the the industrial sector as a lack of tenant momentum right now, that everybody's waiting for somebody else to make a move.

There's not a lot of pressure to make decisions right now because nobody's moving very fast. They say the market's a little soft, but it's not overbuilt. And the thing that they I think that stuck with me the most was their words were, we need a sustained moment of calm in the economic world. And their last words, we

are

hopeful. So you can take that as however you want, but I feel kind of the same way when it looks at a bit of the the economic flow of the last, you know, nine, ten, eleven months. There's been a little bit of uncertainty, and that's kind of contributed to what we're seeing in this in this space. So good news is that in Butterfield 5, the tech park, we have two buildings that are fully leased, and we're actively working with CBRE to market and promote Cochrane Technology Center. Recently, as last Friday, the economic development team joined by housing and building toured a very a great company that's looking to expand, and we're hoping that that deal can get done sooner than later.

Local companies have expanded. Toray, Advanced Composites has expanded. They expanded Nextdoor, and they're expanding even further. Pyramid has expanded in the last eighteen months. Pinnacle exhibits went from four 40,000 square feet to 85,000 square feet.

And then Sempera Organics went from 8,000 square feet to about 45,000 square feet. And they'll be doing a ribbon cutting, I think, in the next couple weeks. And it's pretty cool because they grow pharmaceutical quality mushrooms for food and pharmaceutical use, and they do it in clean rooms. So it's kind of interesting to see the Morgan Hill, the mushroom capital of the world being moved indoors. So it's kind of, Silicon Valley esque here, of of farming.

Matt, can I ask a question?

Absolutely, commissioner. Yeah.

It it seems like the companies that are here that know Morgan Hill see the opportunity. Is it is it that we're not well known, and so it's a question of marketing for other companies to see that opportunity? How do our lease rates compare to the rest of Silicon Valley? And is the lack of, let's say, Internet bandwidth, a factor in in people coming here to set a business? So there are two questions there. The Internet bandwidth, our our leasing prices, and then the third one is our marketing, you know, outside of Morgan Hill.

So Silicon Valley knows where Morgan Hill is, and they know we have available assets. CBRE is the top industrial broker really for Silicon Valley. And if there are clients looking for space in Silicon Valley, Morgan Hill is being put in front of them as an option, especially with Cochrane Tech and the available power at 4,000 amps helps. The challenge is a little bit that we're competing with probably the best industrial or the hottest industrial market, which is Fremont. Hottest industrial market in California is Fremont, probably closely followed by Milpitas.

And it's a lot of it has to do with their proximity to their customers and clients as well as their ability to provide significant power. You know, and we're talking to our development partner earlier today, 4,000 amps, which Cochrane Tech is built to. Each of those buildings has 4,000 amps of power ready. That used to be a gold standard. It's not anymore.

Now companies are looking for eight and ten thousand amps and being ready move in ready. That's a really high bar to me. So we're a little bit at a a competitive disadvantage as it relates to that, but we're very cost competitive compared to North North of us and to the South of us. And, yeah, companies in Morgan Hill know, the the secret of Morgan Hill. We have a great available workforce.

They're able to fill their positions, but we are attracting companies from the North. P Tech Solutions recently bought the Sicata Seeds facility. They're a Fremont based advanced manufacturer. They bought the peak they bought the former Sicata Seeds site, and they're in the process of relocating to Morgan Hill. We've attracted other smaller users from San Jose and from Fremont into some of our industrial parks, much smaller uses, four or 5,000 square feet.

So I I think we're just well positioned. I think it's just taking some time. We do market and promote ourselves both online, but also in partnership with Silicon Valley Business Journal, sponsoring events, publishing ads, and we're looking at expanding that reach outside of Silicon Valley and outside of California into the coming year.

Cool. One suggestion I have, I I don't know how feasible it is for us to, like, have the space and infrastructure for, like, a cloud data center here because I think that would that's one area that

Yeah.

We've probably could explore.

We have had some conversations with a couple data center developers. It's all about proximity to high voltage power and substations, which that's not our strength. Thank you. That's why many of them locate in Santa Clara, where Santa Clara has their own utility. And I think you recently saw PG and E coming together with city of San Jose in a partnership, I think, to try to attract and compete with the city of Santa Clara for some of those types of developments.

Is it something that we can control and improve on, or is this that's it? We we can only do the 40,000 amps or whatever?

Only 44,000. 44,000 amps.

Yeah. I mean, you're telling a data center. Right? Do you know?

I know.

Yeah. Yeah. It's a small nuclear plant.

I don't know. To be honest with you, I don't know Yeah. To what, you know, amps level we could get to with the city. I just know that there are always challenges when we're trying to increase power to facilities in Morgan Hill or get connectivity to new projects. It takes time. Yeah. It takes time and significant amount of money.

Yeah. Can I follow-up the question?

Of course.

Yeah. Yeah. We're gonna ask

for this question you guys need to talk about.

Amazon has announced they're opening a data center in Gilroy. Right? How come they bypassed us? Like, what what is Gilroy? Again, I'm not being cynical. I'm saying, does Gilroy have something different in their infrastructure that allows a data center right there on, you know, by 01:52 where Costco is that general area? They're gonna put it in there. Pretty large data center. What do they have that we don't have? You know?

I believe that was announced a couple years ago, and I'm not sure they've broken ground yet.

They're advertising for my my son-in-law works in the city and is seems to think that there's permits being pulled and they're about and they're talking about recruiting and trying to be good. So I I assume, but

It it might have to do with available land.

It could

be that

voltage and a substation.

Yeah. It's probably land too. Right? Yeah. Just having enough space, a green space to Big space.

I mean, the data centers we were talking to, the two data center data center developers that I've spoken to since I've been here are both have both been looking for sites of 10 to 15 acres.

Yeah. They're huge. Yeah. The power is unreal.

Yeah. And huge power need.

And water to cool it. Yeah. Right.

Okay. We've given them sites.

Mhmm.

And they go do their research and Mhmm.

Yeah. Yeah. Mhmm. Okay. Great. So

let's move on to retail. You saw the slide in our what retail does, and it generates sales tax for us. Some of the challenges we have is we're looking to recruit retailers to the city of Morgan, though commercial users, is our population is under 50,000. That tends to be a threshold. May many major retailers look at is your base population, not even just your trade area, but just your local population sitting at about 50,000 being a minimum for them to even think about locating within your city.

We do have a shared trade area with San Jose and Gilroy. When we talk to potential retailers about Morgan Hill, we do try to talk about the number of users that are driving up and back down the high Highway 101 every day. Mhmm. And that our reach is probably farther than just Gilroy, but into Hollister and into Los Panos. The high cost of greenfield development.

So we do have some great retail commercial sites available, but, you know, breaking ground there, paying for infrastructure, impact fees, and just basic construction cost is really expensive. We do have a limited small retail space availability. Our our retail space vacancy rate is less than 5% Even though there are a few good sized facilities available, we don't have a lot of available small retail space. And there are several retail vacancies underway. The one I'll note is Joanne Fabrics recently went bankruptcy.

And then Rosso Furniture has announced that they're going out of business, but that's actually questionable. So that remains to be seen if that actually comes through. We're receiving conflicting information on that and hope to confirm what's happening there in the next couple days. Opportunities. Our downtown district is in high demand.

If we get a retail vacancy or open space in downtown, somebody is looking at it actively, especially if it's, you know, over three, four thousand square feet. Someone is going to look at look to fill that space. We do have freeway fronting sites that are available. Cochrane and Nepal is one of our sites. We have available freeway fronting sites on on Condit Road.

And because of that, we are actually going and we have freeway fronting sites in the Condit PD as well and the auto PD. So we will be bringing forward we had a conversation with the planning commission probably a month and a half ago about updating the the PDs on Condit Road, both the auto PD and the South Condit PD. But we're also gonna bring back the Laurel Road PD where the Victory Honda is located for a conversation around that PD as well. So that you'll hear from us shortly on that. Just some recently opened to remind you, Grocery Outlet, you know, that once that lease got signed, it took, like, eighteen months because of tenant improvements and power and those things to actually get that project open.

Chick fil A, looks like they're doing great. Luxe Design and Decor at Monterey and 1st Street, that's a frankly all project. That project looks great. Hiram and Diana, a new boutique right next to

Willard Hicks. Thank you.

Willard Hicks. You're welcome. Tip of my tongue. Pre Hispanic, MX Cuisine just opened up where ChaCha's was located previously. Chocatello, Crapeshaw, Stacks, Heric Contemporary, the the Fine Art Gallery and Vera Restaurant have opened. And then under construction, Raising Cane's should have a the brand opening. I think they're targeting October. And then, yes, Taco Bell is coming between Raising Cane's and Starbucks. And then coming soon to Cochrane Plaza, Phil's Coffee, Tractor Supply is going through entitlement, and then oil Polo Loco is going in where Kentucky Fried Chicken used to be.

Where did you say Tractor Supply is going?

I didn't say where it was going. I'm sorry. I thought you mentioned some Tractor Supply is going through entitlement at Evergreen Blossom.

Behind Taco Bell.

Behind Taco Bell and And Yeah. On the

Oh, yeah. Yeah. Okay.

On the South Right. Right. South West. West middle side there on one checker spot lane. Right? Is that what it is? Two yeah. Thanks.

Yeah. Is is the assisted living or whatever was gonna go there in that Southeast corner? No.

The Southeast corner, yes. They're going through entitlement now. They were dark for a while, but it looks like they're now moving forward with their process. So tourism. We talked a little bit about this.

Just a second. Yeah. Question. What about those, like, two blighted sites, which are the one next to Home Depot and the El Toro Brewing Company?

Yes, sir.

What's the update on those?

So the site between Home Depot and Safeway is an old CVS. Mhmm. We've recently spoken to the property owner. He came in and was interested in doing mixed use. We're like, no. At least from an economic development, this is a prime commercial property, so we're trying to in instill a little sense of urgency for them to be more responsive to some leasing queries that we've brought them previously.

Mhmm.

Looks like they've lowered the the lease rate a bit, and we're gonna we're actually traveling to ICFC at the end of this month, Britney Sherman and I, which is a national retail conference to meet with retailers and developers to potentially look at clients for that site. The former El Toro Brewery, we're in constant conversation with the property owner there. He's brought forward a couple different ideas and concepts. We're trying to be supportive of what he's bringing forward. He's brought forward a concept that's more restaurant retail focus, but also some potential housing because he's allowed it's it's it's a, you know, mixed use zone, so he can do a lot of different things there.

And he's actually looking at acquisition of neighboring properties, and so we're having conversations with him. It is top of mind, though. So I appreciate you asking.

Yeah. Cool. Thanks.

K.

So tourism, we talked about the slow recovery from pandemic. Also, the high cost of construction. It is really hard for hotels to get out of the ground. I think we're pretty lucky that we have a downtown full service hotel under construction that's financed and moving forward. And the last four challenges is because of the high cost of construction and because business is slow, we have an aging hotel inventory.

We haven't built a new hotel since 2016. With every unit passes, hotels age. The quality can deteriorate if if property owners aren't continually investing with their property improvement plans. And those improvement plans are getting more and more expensive to do. So our opportunities, the full service hotel, seeing that to completion, making sure that gets done, and getting that operational.

We think that will be a big lift for the city. It'll be a big lift to our TOT. It'll be a big lift for a lot of the businesses in downtown as well. We do have a fully entitled 116 room hotel at Cochrane just next to the seven eleven between the seven eleven and Chick fil A. That project stopped a year ago literally because their construction costs doubled.

It went from 24,000,000 to 50,000,000, and it just financially, it's infeasible given the current occupancy rate and average daily revenue per hotel room. They just can't pull the trigger. That same developer stopped a hotel development in Sacramento as well. We have the opportunity to expand our sports and entertainment and recreation assets. We're continually looking at what new assets that we can bring from a private sector or from we can support our our teammates in public services and what assets they can develop for the city.

We do have an hotel incentive plan, that's out there to help renovate hotels and attract new hotels. And then we have the two thousand twenty six Super Bowl and the FIFA games that are coming to Santa Clara. So we're excited about that and looking at various activations that we can draw people to Morgan Hill utilizing those, quote, unquote, assets. Other positive things within tourism is the new Fine Arts Center. It's a great new asset. It's going great. Lot of great visitors. Lot of great shows are happening. Events are happening there. The city established a percent for art ordinance, so it's a 1% on new construction.

So we'll be able to develop additional public art, private and public art. There's a public art master plan underway, a destination magazine underway. So this will be a first for the city of Morgan Hill, our our our Visit Morgan Hill partner organization that that is the TBID that represents and markets the city of Morgan Hill externally is putting the is putting together a destination magazine that we think will be well, it will be published by January. So we will be able to distribute it to those who are coming and visiting for the Super Bowl and for FIFA. It's a big undertaking, and so we're supporting that activity.

And then strong visit Morton Hill marketing presence. They do a great job both online. If any digital president's just marketing Morgan Hill to come visit anything happening in Morgan Hill, they're a great partner with us. And the last question?

Yeah. You can you can read me very well. You know, we're we have several cultural, you know, groups within Morgan Hill. And I'm thinking about, for example, trying to just like we talked about FIFA and the Super Bowl, could it be that we look for sporting events or or cultural events that will draw people of various backgrounds to Morgan Hill. For example, just just throwing stuff at the wall here, like a a mariachi competition in Morgan Hill.

Right? They'll bring a bunch of people to Morgan Hill. So that that's one idea. Another one is outdoor musical concerts where where you get singers and bands. Do we have a, like, a outdoor music event where we can, you know, have people do outdoor music in in that regard.

So, you know, we we don't have the you know, we can't host Taylor Swift in a big hall or something like that. But thing that you could host and bring people to Morgan Hill. Just different events in

the Bruce was last weekend.

Last weekend. Yeah.

It was last weekend. Right? So there's a music festival that kinda comes to town. It takes over the outdoor Right. Right. Right. Yeah. In itself is a bit of a problem. Tends to be special events Mhmm. Have a challenge of their own Mhmm.

With large numbers of people, security, fencing, selling of alcohol, security, all of those things require significant planning and an organization to undertake that and sponsor and support it and finance it. Boots and Brews is a private entity that comes, they set up, they do their thing, and they go. And then, you know, we've had some festivals in the city of Morgan Hill that, you know, have come and gone and are trying to come back. Mhmm. So special events have their own challenges.

Mhmm. We'd love to see more special events, the ability to do more special events, but we recognize they're difficult to do, and they need sponsors to come in and provide the financing to go do it because there is financial risk. Mhmm. They require sponsorship, and then typically they make money on alcohol and beer sales. And when you're selling alcohol and beer, that creates a whole other set of problems and conditions. So Yeah. Let alone street closures.

So Thanks.

There's a there's a set of challenges there that we understand. And I think we're pretty selective in trying to identify events that are right sized for Morgan Hill, such as the Morgan Hill Or Mojai Food and Wine event that's happening next month. Last year, Frank Liao partnered with Charlie Palmer of Appalachian to do the the first Mojai Food and Wine event. I've attended a lot of food and wine events. That was spectacular.

Year one, sold out. Year two, it's coming, I think, October 5. And, again, celebrity chefs, food, wine, music, those I mean, I think curating the right events and the right music is the right approach.

Yeah. Okay. I do agree to Matt on Sure. For a minute. For a sec. I was reading recently. I might

be off my numbers a

little bit, but the recent bike rally in Hollister, it cost the city about $300,000. They lost about $300,000 just by the time everything was tallyed up. Like I said, you know, the amount of police that they're putting out, all the special security, all the preparation.

Yeah. And it and it's typically not cities that do these activities. It'll be chambers of commerce or rotaries or other nonprofit organizations who are doing it to create, you know, a financial success for themselves. Yeah. So it's not without risks.

Yeah.

So our last sector I wanna talk about is health care. The challenge is really with bringing and attracting health care to the city of Morgan Hill is our our market population. Again, that less than 50,000 city population is small for large providers. And then second, we have limited space for satellite providers. So if you have a satellite provider, whether it's El Camino Health or Kaiser or Stanford, there's limited space for them to come in and just lease up a little bit of space in the commercial space for them to go do that because our vacancy rate is so low.

But even if they were to identify vacant space, medical tenant improvements are very cost prohibitive. You know, every every room and every setup, it it it's very expensive for medical TIs. The opportunity really continues to be with the Sutter Health Medical Center at Juan Hernandez and Tenet. Sutter has come here. They have moved into the existing facility. We're in conversations with them about their future plans, about how they can expand services within their existing facility. And then they do have an ERR for their medical center expansion is near completion.

It's out.

It's out. Yeah.

The draft is out.

So we we created this PowerPoint a week ago. So good job. So the the EIR is out. And the last thing is when we updated our industrial zones, we now allow medical in all zoning districts in the city. So it's pretty easy if somebody wants to come to Morgan Hill. The doors are open. We're business friendly. We're ready. We just we need them to come, and we continue our our communications with those providers.

So Yes, sir. Quick question. Where was that site again

for Sutter? So Sutter is at Juan Hernandez.

Yeah. 100,

off of 10 A. Okay.

Yeah. So they took over that facility. Okay. And then there's I can't remember the exact acreage adjacent to that property

Got it.

Where they're currently entitled for about a 150,000 square feet. I'm looking at Jen. She's 150,000 square feet of medical, including a 55 bed hospital, but they've put out potential plans to did the EIR to expand, do potentially 250,000 square feet there. So I think they're looking to the future. And if you're following what Sutter is doing, they're expanding in a lot of places around the Bay Area.

So we're hoping we're we're next on their list. So overall strategic efforts, really, is the basic blocking and tackling of our efforts in economic development. It's around business retention and expansion. It's much easier to keep what you have than bring in new businesses all the time. So we're continuing to provide support tools, resources, and information for businesses, constant communication, trying to keep them current with their needs.

We support businesses of all size and as and industries. We recently, this year, started providing small business entrepreneur education for businesses, and the first cohort will graduate next month. About 20 entrepreneurs, and it's been an the class has been done completely all in Spanish for Spanish speaking entrepreneurs. So they'll graduate in October. We're pretty excited about that.

And then workforce development and business entrepreneurship. I talked about business entrepreneurship. We partner with Work the Future and constantly trying to connect our local employers to hiring resources and needs. And if one company is downsizing, we're making sure that we're communicating with them to provide that a bit that workforce is becoming available to our existing employers so they know who's coming available so we can kinda connect the dots. Marketing and promotion, website, blogs, social media, advertising, e newsletter e newsletter, conferences for international center of international conference of shopping centers, events, presentations, community meetings.

We go to events and we're visible so people know where Morgan Hill is and that we're open for business. Support development investment, you know, we work internally as the ombudsman. People are doing projects, trying to make sure we're working with planning and engineering and building to get projects through, providing opportunities and connections to grants and tax programs and broker communications and tours. And then last, internally, we're constantly looking at policies and programs, trying to create incentives, updating zoning, conducting research and studies to make sure that Morgan Hill is you know, we're working on the right things and that we can create not just flexibility for businesses, but clarity on their path to getting to entitled and getting their doors open. So So with that, I'll open it up for further questions.

Great. Thank you. And so just to clarify, you wanted some some questions, but the patient were there any other comments or anything beyond that that you're looking for?

General feedback? Feedback.

General feedback. Great. Anyone I have

So I have a number. Please go ahead.

So how do wanna do share? So I

have a number of questions.

First of all, just based on what was presented. Sure. And then I have, believe it or not, some feedback, Right? And some suggestions. Okay. But do you wanna do it all at once or just just want

to clarify questions about subject?

So I think all at once should be fine. So when maybe what we can do is we can start off from one side of the room. So commissioner Mueller, if you want to start off and can go around. And if anyone

has any comments, please go ahead and jump back in.

Yep.

Okay. I think the first question I asked, Matt,

is I think it was asked a little bit earlier, but I'm not sure we got a response. Do we know now if our Internet bandwidth for the industrial is is strong enough and reliable enough for what the current business need is?

I'm not sure I have a clear answer to that. I am not fielding calls from our businesses saying our Internet is slow. We don't have enough bandwidth. So I'm I'm not hearing complaints from businesses. Typically, they're dealing direct with the providers. When we do hear of issues, we're very quick to get on, you know, on the phone or into email with Frontier or Spectrum to find out what those issues are. We would love to have additional providers in the city of Morgan Hill. Yeah. But it's a I think it's cost prohibitive for folks to come into Morgan Hill and provide that infrastructure.

Okay. My other well, first of all, I think the focus has to be heavily on retention in a uncertain market. Right? We don't want somebody here that's here to move out, and we got a lot of space to do that. It just takes a lot of work to to stay on top of them and let them know what we have, but they're already there.

The other part is for the people that come to downtown and for the people that attend the sporting events at the outdoor sports complex. How does our spend rate from those splits play out? Are we getting the kind of dollars per person coming in that we should be getting, or is there money on the table there that we need to try to go after? I know we had part of that accommodation with outdoor sports conference. It seems like there's some needs there that need to be filled when we were talking about the condo PUD.

Yeah. I'm trying to remember the exact numbers. The Visit Morgan Hill tracks spend via a Visa report. They have access to some datasets from Visa credit card, and I forget what the numbers are. I think they're close to even if you remember yeah.

I well, I'd have to get back to you to know what the the actual spend is. Okay. So I We see we see an actual more than a majority of the the Visa spends are outside of the nine come from outside of the 95037 ZIP code. Right. It's it's something like 60% or 68%. It's it's a pretty significant number. But we're you know, it's it's very hard to attribute, you know, if somebody goes to the outdoor sports center, exactly how many dollars they're spending downtown.

Right. Right. But but we can

we can use that Visa data to kinda track, you know, if a user is from San Jose or they're from Pleasanton or from, you know, Chicago. That Visa data is kinda showing us that.

Yeah. So that's where I think if we can if we're not getting what we think we should be getting, what what can we do to try to get them to spend more here?

Well, that's that's a great question. That's in part why we're coming back with some updates to the the PD along Condit Road because we recognize we wanna try to attract potential uses onto Condit Road where visitors to the outdoor sports center can instead of being trapped in a parking lot afraid to leave or that they're bringing their lunch in or, you know, that they'll walk across the street and potentially visit a retail or a restaurant business that's located on Condon. And and we do communicate with governments via VisitMorganhill and our partner organizations to let them know about the assets that are downtown. So we're communicating, you know, about not just what's around the sports park, but Morgan Hill in in general.

Yeah. Okay. And too bad we couldn't get our trolley service to expand, to do something with sporting events in town to sort of loop them in where they wouldn't have to move the car. Know we attempted to do that.

Sounds like an entrepreneurship idea for you, Justin.

Yeah. Right. The the the medical providers that want to come in and lease an office or three or four that lease into an office area I mean, years ago, we used to have a bunch of them that did that. Now in today's dynamic with Valley Medical here and Sutter here, it's different because they're closed systems for the most part. But I I would really like to figure out how to address that that medical office space that's available to to the to the nonclosed systems.

And I I don't have a magic answer unless somebody's willing to build the building. Right?

We have tried to have the conversation with some of our property owners about if, quote, unquote, if you build it, they will come.

Yeah. That's probably a tough conversation.

It's a tough conversation because building medical in in of itself is expensive. Mhmm. Mhmm. So most usually build they won't build medical locations on stack. They typically have a provider who's

Yes.

Says they're coming.

Yeah. Sure,

Habib. Or by chair, Habib, I

want to just remind you that, for this item, we also have to open up for a public comment. Yeah. And we also have another presentation on tonight. Yeah. And then just reminders of the commission that we for the PDs, we do have upcoming workshop at our next planning commission meeting where we can discuss more about the PDs.

Okay. Thank you.

Are you done, Joe?

I'm done.

Alright. Matt, a couple of clarifying questions. I'm gonna ask you some of these, and you may not have the answer to them, but it might be worth getting the information at some stage. But so on your first general fund slide, you show this the split of how the general fund is is funded. Right? And, obviously, the big the big co owner, 70%, 69% is tax is tax revenue. Do we have any idea how that compares to other cities of our size? Do we have any idea? Have we have we seen any models where other cities are doing something slightly different and getting a slightly better result when it comes to German funds? I'm asking that question because, you know, I don't attend all the city council meetings, I listen in a lot of time online.

And it's constantly a conversation about but if you have to believe some people in the audience, like, we're all going to hell in a handbasket. But if we listen to our staff, we struggle and continue to struggle with junk funds. Right? It's one of the tough areas to fund. All the specialist stuff, not sure it does great either, but at least, you know, it's accountable for us. So I'd be interested to know again, don't have to answer the question, but how do we compare to everybody else? But what is everybody else doing? I know that there are models out there where people have walked out. Know, as we move on to the different decades here, are they adopting different models to fund their general fund differently?

So I I don't know the answer as to how we compare by category to other cities. But I do know that as a city compared to the rest of the cities in Santa Clara County, Morgan Hill is the lowest tax collecting city on a per capita basis in Santa Clara County. We don't have an additional sales tax additive on, so we haven't added a quarter percent or an 8% compared to other cities. Our hotel inventory is you know, again, we haven't built a new hotel since 2016. Our hotel inventory hasn't grown.

We have three auto dealers. Auto dealers are very big sales tax generators. Mhmm. We don't have you know, we we don't have a lot of big box stores. We don't have a Costco.

So those are, significant. And because of our population, we won't attract those big retailers. And that's significantly we're probably going to underperform a little bit in that area. And then lastly, I think on the property tax, I I think we're seeing growth there with the cost of housing that's going up, but I can't speak to John's probably more likely to speak to cost of housing and how that affects property tax, etcetera. But we are seeing some growth in property tax, but that's just really we've seen development of some new what was vacant land or now industrial buildings that's going to grow our property tax.

And then the home values have gone up. So that's the best I can answer your question this time.

Okay. Again, a suggestion. We always want to compare ourselves to Mountain View or Santa Clara or Sunnyvale or Palo Alto. It's like we're not any of them. Right? We probably would never be, maybe for good reason too. Might be okay. But I'm saying other cities of our size, like, slightly satellite, little you know, we're we're that little bit distance away from Silicon Valley in Southern California and in the state. I'm just saying it might be worth gonna give you bit of feedback here as I go jump through some of these slides, but I really feel like and you know I'm a big fan of you guys. Right?

You guys do fantastic work. So even though I might sound a little cynical sometimes, I try to be realistic. It's never dinging the work you've been doing. But I think I wonder at some point, is it worth the city to spend some money and some good experienced consultants or somebody that can advise you and say, by the way, here's what everybody else is doing. Here's how they're dealing with. Here's new ideas they've come up with. Right? And I'm gonna say that because I think our I think our economic development plan, if I'm I think this kind of evolved either was it maybe four or five years ago, this this this this might be maybe a bit more. I think the world has changed too much on us. The economy has changed on us.

Politics has changed on us, and I think it's a little stale. And I think you could gotta go back and rethink it. I think we all have to go back and rethink it if we wanna continue to fund the general fund. Because things like retail, we've been saying for years, it's dying by the year, and it's not getting any better. Right? It's really not. And I'm not sure that's where we should be doubling down on. Whereas, you've you've you've proven it with metrics here if you go to slide. So for example, if you go to your next slide, we get 10¢ on the dollar for property tax, which is good. Right?

The property tax is more about, I'm assuming, residentials and so maybe not much in your in your radar. Right? We get 1% of sales tax. The transit transit office tax, we get 11¢ on a dollar there. Right? That's good. You get I mean, you have to get 10 times more sales tax than you do transit you get the same amount of money. Right? And then if you look at your this one, sales tax, you know, everybody gets all boo boo here about car dealerships. They're a massive contribution to to to the city, and they're clean and no maintenance.

And for all intents and purposes, fairly environmentally friendly. Yet we just poo poo on them all the time. And we have stacks of freeway frontage as people drive past us to give away by their cars. So I think, again, we gotta look you know, we can we can talk about downtown and restaurants and art galleries, and I love all that. I go down there every weekend. Right? And it's great for lifestyle. It's great for the community. It's great for tourism. Is it making a big dent here? No. It's not. So we have to look at where the big dents are. The way we can make big dents like auto and transportation, like hotels. They make a good contribution, 13%.

Right? Even food and drugs and business and construction. That's where the money is unless people have better ideas. But our old model is not working, and it's not going to work for the foreseeable future. So I think we gotta make some changes. That would that was my at least my opinion. I have one or another comment.

Commissioner Donnie, I appreciate I appreciate the comment and the feedback. I think you you do see within our strategy, you know, within retail, we are focused, and we have brought forward previously a vehicle sales overlay trying to attract multiple auto dealers for the Cochrane, DePaul spent a lot of time and effort on that two years ago trying to attract. And then, you know, it took a lot of time, and the economy pivoted on us. The you know, interest rates went up, things kind of fittered away.

But you're going in the direction, though. I think I'm I'm actually agreeing with you. I'm saying you're doing that is

the right And still are pursuing actively actively pursuing new dealerships very actively. I know. There hopefully, more about that when we do the PDs.

And what I'm saying to you, though, what I'm saying to you and to well, I'm gonna say the audience is pretty small here, but what I'm saying, though, is that is the right approach, and I think we should continue to push it. I think our councils should continue to push it and recognize it and be realistic about what it takes to fund the general fund and where that money can come from. Right? And I am absolutely agreeing with you say you you're down the right path. We should pursue that freeway frontage. We should pursue that option. We pursue we had ideas about bringing multiple dealership together in one place and sharing with all those ideas. I love all those ideas. Right? Yeah.

I'm a car guy, but it's not because I'm a car guy. It's because I see where the money comes from. Right? Anyway, I think that that's certainly what I would suggest there. On hold on a second.

I I still struggle to get metrics, and I don't expect it tonight. But when we talk about more jobs, more advanced manufacturing jobs, health care, and areas like that. It's never clear to me if I bought a new manufacturer here and they put 500 jobs over on Cochrane, what is the contribution to the general fund? What does that do for the general fund? Where's the money coming from?

You don't have to answer the question right now, but I think for years, I've been asking that question saying, I'm not saying don't get the job. I'm not saying people we shouldn't have more work here. Realistically, though, a house in the city is $900,000 to $1,500,000. You can't be making no offense to anybody. You can't be making $75,000 a year and think that you can buy a house in Morgan Hill. Right? That's why we're all driving off every day. So what I'm saying is it's great to focus on bringing those jobs here, but what does it do to the city's funds? I don't know where that money comes from. Same with health care. You bring a hospital here. What does the city get out of it? Don't have to answer the question. I'm just saying we should think about it. Right? I have one or two more questions.

While you're looking that up, vice chair Habib, it's about 08:00, and we have some high school students that are in the audience that you would like to take a short one or two minute break.

Yeah. Definitely. I think we'll go ahead and do that. We'll go ahead and break for three minutes. We'll return back at 08:02.

Right now, it's 07:59, so we'll go ahead and break. The high school students need anything signing off. You can come up to the the clerk here, and you could sign off any paperwork you may have. So we'll go ahead and bring back the the hearing. The time is now 08:02, and I'll bring it back to you, commissioner.

Yeah. I got a couple quick questions. Sorry. Comment. Yeah. Matt knows I have a

lot of feedback on this.

Oh, there you go. I'm also curious. We put some so downtown in the downtown businesses, restaurants, and so on, we put a lot of focus on that in the city. I'm not sure at the end of the day it makes a major percentage contribution to the overall general fund. It contributes, but not as much as some other areas. And, again, my feedback would be is, you know, it's great for lifestyle. It's great for the community. It's great for, you know, tourism. Hard coal fax, you know, makes us probably a single digit contribution to the overall general fund. I might be off a little bit there, but I'm I'm thinking it's in the single digits.

So I'm not saying don't focus on that, but I think there are bigger areas outside of the downtown, bigger business. We gotta think a bit bigger. Like you said, we're probably not gonna get to Costco's, but maybe maybe there's something similar. Like, for example, you said tractor supply was coming. It's a pretty popular place. I go there all the time myself, and it's it's very popular. So it's great to see stuff like that coming. So I think if we can focus more on that as well and not just worry, not get too focused on downtown because it's good. It's great for community. It's great for tourism, but it doesn't make massive dent on the general fund.

And then on the aging hotel inventory, is there are there any options, Matt, is there any logic in saying it's in everybody's interest to try and get these hotels open to a more modern standard? Some of them are pretty bad. Right. Like, is there anything we can do there? Is there any incentives, any grants? Is there anything we could do to encourage these guys to and maybe, like you said earlier, just the fact that you haven't really recovered, you know, from the from the the COVID pandemic, maybe there's not that whole lot of interest to do much development there, especially with interest rates. But a lot of our hotels, they're they're not great. Right?

Yeah. We do have the we do have the hotel incentive plan that will support, you know, reinvestment in the hotels. But some of the hotels cannot even get financing given their current occupancy rates and ADR to actually pay for their improvements. And then the hotel incentive plan doesn't necessarily work for them because the amount of revenue they're generating isn't enough to contribute back to the on the rebate programs. It just doesn't work.

Yeah. Yeah. And then just for clarity, downtown is usually our fourth largest sales tax contributing district if we look at various districts in the city. And that's amazing given that there's no big box retail and it's all, you know, 100 plus small businesses making up the downtown district.

So where where is that on this chart?

I don't have that, but I can send you a chart.

Yeah. Because it says restaurants on sale is 30%, of which I think probably at least half of that is hotels. Right? So you're back down into single digits. My last comment.

I have a We have a great bubble chart that shows where our sales tax generates throughout the city. Yeah. I'd to share it.

Please share it. Yeah. I have one last one last comment.

Yeah. Thank

Probably not very popular. I don't know why, you know, with with the deficits we have, I don't know why we don't entertain a local sales tax quarter of a percent, eight of a percent because that's money that would come straight to us. Right? That's not shared with anybody. Correct?

Correct. Actually, a better idea, and I'm this is potentially above my pay grade, but I'll make the recommendation. Yeah. Go ahead. Because it will generate significant revenue per city is a utility user tax. Explain that. Utility user tax. So it's put on your utility bill, your phone bill, your water bill. It's a small percentage, but that small percentage across all utilities adds up. Many many local I think we may be the only city in Santa Clara County that doesn't have the UTT.

Yeah. I I I don't know what it is, and I'm not a huge fan of paying any more taxes myself, but I do know that we have to pay our bills. Right? And if we don't pay it one way, we're gonna pay it another way. So I strongly would suggest we put those type of proposals on the table as well, whether it's utility, whatever. You know, my PG and E has been so cheap as it is. Right? Yeah. Right? But but I I like the idea or, you know, something that says, hey. If if if we pay it and so does everybody else that comes to the seat pays it and it comes directly to us, that could be that could be good money in in the fund. Anyway, that was my last closing comment. Thank you, Jeremy.

Thank you.

We have to go for question, Mike. Yeah.

I'm good.

We're good. Good.

Alright, Commissioner. Good. I

have a couple questions. They're enlightening, but the first of my questions has to do with the chart called sales tax. If you can put that up. The in that chart, it shows a category, I think in gray or so, the state and county pool, which, as I recall, was not there. It was blank ten years or so ago because that's the tax for the sale of online goods.

And as I looked at it, it was and I compared it against how I've been since we haven't a couple years bought a car, it's almost zero in autos, and we haven't built anything. We don't do business. We go to the grocery store, and we go out to eat, or actually, we do it online. Mostly, it's online through DoorDash. As I looked at it, I I'm thinking that for a retiree, a lot of money is spent online.

And so the 18.8% is a lot more than zero, which it was not that long ago, but it didn't seem to jive with, the elderly community. And and this community continues to age, and more people, I think, buy things online. So I was almost surprised that it was as low as it is. I I thought it would be higher, but maybe it's because the way that that tax is distributed. Okay. So it may be on the average less than 1% on the dollar. Okay. That's something for cities to really think about because somebody is making lots of money off of this.

Some

agencies or entities, And that was, I think, in my mind, my most significant input, although it may not be significant. And did you wanna respond to that? Or

I'll respond to it very quickly. John Lang, housing and economic mobility director. So the thing to know about the county pool, it is where online sales go. It is also sometimes where miscellaneous sales tax goes when companies buy large equipment. It gets allocated to the county, not to where the piece of machinery got shipped to.

So, but the important thing to know about this, and this is getting to an underlying a lot of the underlying questions, commissioner Downing mentioned. The pool is distributed every quarter based upon your percentage in the county. So take, for example, if countywide, there was a $100 in sales tax collected throughout the whole county at all cities, and Morgan Hill had $50 of the $100, we would get 50% of the pool. The reality is is Morgan Hill's base of that $100 is not $50. It's, like, $5.

So we get 5% of the pool. Now the thing to remember is that pool is still the 1%. Right? So it's all the 1% that goes into this pool. So you're getting 5% of 1%.

So when you say it's a a fraction of less than a percent, that's what it means. So the online sales for communities like us is actually we're losing that opportunity. So when people choose to click instead of walk into the store, we're losing capturing that, what I'll say, 100% of the 1% k. We're getting 5% of 1%. That is the trade off when you click instead of physically walking into the store.

K. And I I know it may be like, David and Goliath to try to change something like that, but the cities, really ought to take a look at it because the cities are ultimately gonna pay for it. And why? Because everything that you order gets delivered, and those delivery trucks weigh a little to a lot. And, exponentially, they impact the streets. They get premature deterioration. Cities have to pay for that. The county doesn't have to pay for city streets. The state doesn't pay for city streets and so forth. So it's something to take a look at because this is the way it's going to be.

In fact, maybe in the future, they're gonna be delivered by the the little planes. What are those? The drones. But they're they're in any event, that was just the input. The other ones are kind of just for my own edification. When you said that two of the buildings on Butterfield, the Butterfield 5 Tech Buildings were leased. I missed who they released to.

So Pinnacle Exhibits has taken Building 1, and then Building 3 is split between Dakin, who's a HVAC manufacturer and supplier, and then Rudolph and Sletten took the other half of that building, and they're doing warehousing and assembly for the Kaiser Permanente building that they're the main contractor for up in San Jose.

That's fantastic. So two of the five buildings will in the near future be occupied? They're occupied now. Oh, great. And these are the ones again on Butterfield?

Correct. Butterfield Tech Park.

Fantastic. I think everybody asked about it along with the ones over there that I think he referred to as Cochrane. Is this adjacent to the freeway there?

Yes. Cochrane Technology Center.

Okay. That's the one that is being marketed?

Yes, sir.

Okay. Under retail, I had a question about I I think we, have done a fantastic job in in one sector, car washes. Okay. I noticed that we had

I can't take any credit for that.

I I can't believe, really, we have so many car watches, and they seem to be doing business. Do you have any indication if they are?

Any Lot lot of clean cars. I think the metric is a lot of clean cars in Morgan's. I I I don't know.

Okay. Okay. My last question had to do with the downtown hotel that everybody asked about. When is it anticipated to be open?

2026.

Fantastic. Alright. And is there any projection? You know, the commercial buildings, it was almost a matter of timing. If we had these buildings maybe five years ago rather than now, we might have gotten much more activity. The hotel has taken so long. Is the train still at the station for that hotel? In other words, is the demand for a boutique hotel there?

We we believe so. I we believe, you know, Lial Hospitality has a plan. Appalachian Hospitality has a plan. They're implementing that marketing plan. Okay. And, look, we're already seeing tellers are telling us that they're already seeing bookings for the twenty twenty six Super Bowl and FIFA. They're seeing room blocks being filled up in Morgan Hill, which is a really good sign.

That and the boutique hotel will miss that window.

They're trying to capture that window if they can.

So, really, they're talking about the 2026?

I will not get trapped on a specific Okay.

Okay. Well, that's fantastic. I I think once that opens up, it'll be a real psychological lift for the city. And I guess the worst thing that could happen is you have a beautiful hotel and nobody comes.

I think they're gonna come.

I I I think, even the residents of, Morgan Hill need to consider, staying there a night or two. Everybody did that during the, first, ten years, we'd have a successful hotel.

We have no full service hotel to serve our corporate businesses in Hortonville.

Okay.

So that's a very ripe market for, that hotel as well as the Owl Hospitality's wedding wedding, business that he runs. Great.

Great news. Thanks.

Matt Matt, your voice is a little distorted, by the way, just so you know. Just stay back in the microphone. Think we are

all just staying back to it. I'd to hear you.

Right. Thank you, commissioner Tonda. I just had a couple of, I mean, brief questions. So the the first one is, I think, what's on the mind of most of us has been inflation. And so on that same theme, I'm just curious, does the city have an investment account where they keep some of their funds that, you know, they put into, I don't like, a brokerage account to increase over time and so on and so forth. Are those those types of investments that the city does to grow its tax I mean, to grow its, funds in a different manner than, especially, taxing folks?

So I'm not in the finance department, but the city does have an investment strategy, and it's a great question to bring to the budget workshop that's happening, I think, later this month Okay. Perfect. City council.

And and on a similar note too, I know you talked about the PUDs, but I think for for myself, what would be interesting to see is, you know, based off of your experience, you know, talking to the folks out there in the industrial fields and the people that you're communicating with to sell what the city of Morgan Hill has is to see what we can do specifically within our jurisdiction when it comes to changing zonings, changing PDs, changing like, what we can specifically do to make the processes easier to track those folks. And so I again, I don't think right right now would be the the best format to talk about what we can do when it comes to whether expanding usage under certain zones and, you know, maybe permanent processes, but which may be more internal streamlining those and so on. Again, just a comment in regards to something to to think about. I know commissioner Downey said this as a joke when he when he talked about bringing a stadium here to city of Morgan Hill. But it actually reminded me because as you're talking about tourism, I think I I recall, like, there might have been a couple of news stories somewhere where the city of Morgan Hill is actually has several residents that are 40 and football players.

And so that had me kinda thinking when it comes to more innovative approaches in regards to promotion, seeing how you can maybe leverage some of those, you know, residents that may be directly, you know, have, like, large influence bases or big presence on social media and how the city can, for example, collaborate and get, you know, hundreds of thousands of views in regards to some of the tourism spaces and, again, leveraging those people that have a pretty large social media presence. And so I think that was just something I was thinking about as you mentioned, again, as a joke, you know, when it comes to that and as you're talking about, for example, the Super Bowl coming in 2026 and how we can kinda have a a more long term strategy, especially because I think as a, as the NFL, I think, requires a lot of their players to do community outreach, community programs, and so on. And so I think that might be a one place that the city can explore a little bit further. Question about TOT. Does Airbnb count as TOT?

Do we get those 11¢ for Airbnb?

We do have agreements with Vrbo and with Airbnb. Okay. We did not have those agreements up until about three years ago. Those are completed now. The challenge is actually tracking the users and reporting. There is a bill, I think it's in the assembly or the senate, to actually make it easier for cities to find those users and conduct audits. I'm not sure what the status of that legislation is, but

Okay.

The city has been supportive of that legislation.

Okay. So that's something in the pipeline, or is that still something that

No. It's something we collect. It's just the ability to audit it for accuracy is difficult from Great. A city

Thank you. And finally, just one last maybe question or comment has been around you know, you're talking about a lot of the great outreach that, you know, your team has been doing. Is that typically consolidated to I know you talked about across the state, and you briefly talked about across state lines when it comes to really selling some of the industrial spaces and and so on and bringing those users in. Is there also work being done? Like, I don't know if c r CBRE or any of those other real estate firms do, like, international outreach when it comes to, you know, selling the space directly to, you know, investors that might be international and maybe wanting to move into The US and doing business here and California being a really big hotspot?

Because well, I'm and the reason I'm asking this too is because you you're talking more, like, hyper local in regards to the Bay Area and, like, Fremont being hotspots. But, you know, for international investors, like, California can be a hotspot on its own. So if you mentioned California as a site, it's that hotspot for them. So just wanted to hear your thoughts in regards to outreach that happens for maybe those, advanced technology users and so on that might not then necessarily be within the state or beyond the states and and beyond?

We're currently in the we're currently in the process of expanding that outreach

Okay.

Using some different publications than just the business journal. But, typically, Silicon Valley Business Journal has a readership that it's not just Silicon Valley. People are tracking what's happening in Silicon Valley by reading that magazine. Sure. But we're looking at some other, you know, advertising opportunities, blog posting, websites. And we do significant amount of posting about available assets. And, hopefully, our networks are big enough, and CBRE is a, you know, is a global real estate company without reach into, you know, global markets. So Cut. You know, we can always do a better job of putting Morgan Hill on the map and making sure people know about our available assets. So appreciate the suggestion.

Great. Thank you. Any other comments? Be back. Seeing none. Oh, yes. Thank you. Thank you, for mentioning that. So what I'll go ahead and do is I'll go ahead and open public comment. If there's anyone that is in the audience today that would like to make any comments or, Jenna, if we have anyone online.

Yes. We have Doug Muirhead. Hold on.

Oh, we can't hear you.

Actually, don't turn on.

Testing. Yep.

Okay. Thank you so much. Good evening, commissioners and staff. For the name I, my name is Doug Muirhead. I'm a resident of Morgan Hill.

Since I didn't think I'd be researching public comment tonight, I didn't bring my computer, so you'll get two fuzzy comments. But first, I must do a public service announcement for those of you who started to discuss utility taxes. You should, in my opinion, pay attention to the city council meeting on the seventeenth where the city manager is scheduled to start a process to discuss service prioritization. The assumption is that the city needs more revenue. And so following that, we'll either be a way to try and get more money from us to pay for those services or reduction in services.

So end of PSA. One, fuzzy comment has to do with, power into South County. Sometime pre COVID, PG and E PG and E had a project to add another, high voltage, line into South County, and they were holding public meetings, doing, discussions on where the lines would be and this sort of thing. And then sometime later, that pause that project was put on hold, and I don't know why. And I've never heard anything since then about doing a new significant input of power into South County.

Perhaps they're a little busy with wildfire mitigation or something like that. My other comment is to follow on commissioner Mueller's touching on Valley Medical. And this question is health services, and what is the interaction, if any, between what the county is trying to do at DePaul and what the city is doing with these, private operators. The last budget that I saw from the county, they had two expansions for DePaul. One would be a special treatment for, youth.

I don't remember the conditions on that. I believe that's still in the budget. They also had an area blocked out in the building for skilled nursing facility, and I believe that's been put on hold. And the last note I saw implied that perhaps that would be outsourced to some private party. So if there's anything that you can say about the interaction between those two medical processes, I would be interested in hearing. Thank you so much.

Thank you. Do we have any responses to that right now? I think the first one in regards to the power I'm sorry, PG and E's voltage upgrade and second one in regards to the medical

no? Okay.

I know of no existing plans for PG and E to expand at this time.

Okay. Yeah.

The the second line in was

in, like, Michelle.

The second line in was Michelle because they got too much negative feedback on the site. Got it. Thank you. To the best of my knowledge.

Okay. Perfect. And, just one last comment. I just wanted to say to your team, you did an excellent job with your PowerPoint presentation. I really loved all the the visuals, so thank you so much for the presentation today. Anymore

No speakers?

I don't think there was any. Was there any? I don't have any more filter products, and I don't there are no raised hands on Zoom.

Perfect. Thank you so much. So we'll go ahead and move on to the next item on our agenda for other business, which is gonna be receiving a housing and homelessness presentation.

Thanks, Matt.

Sure. Let's go ahead and do that. I'm gonna there's a request for a a short break. Right. And so I'll go ahead. The time is currently 08:27, and we'll go ahead and take a five minute break returning back at 08:32. Alright.

I'm

retiring from the shares that they gave all retiring staff.

Oh, well, I guess they'll be working with

the stadium since they're open. So much do you know? That's fantastic. Hotel, but we have to run-in by a brain.

Yeah. And we've got, you

know, guests that wanna stay here.

That's awesome. Every man. Or three matches. Yeah. That's so amazing.

Alright. So the the time is now, 08:33. We're gonna go ahead and commence our planning commission meeting. If I may have everyone have a seat, please. Alright. The floor is yours.

Good evening. Members of Planning Commission, community of Morgan Hill. John Lang, housing and economic mobility director. I'm very happy to be here this evening in partnership with, my colleague, Matt, talking about housing and homelessness. Within the housing division, there's three legs to the stool that we oversee.

One is the affordable housing program. Another is the homeless services and economic mobility. This evening, we're gonna be focused more on just housing and homeless services, but we do have a third component within the housing division, which is economic mobility. So, when it comes to housing and more specifically affordable housing in Morgan Hill, we follow the five p's. One is production, making sure that we continue to diversify the housing stock within Morgan Hill.

Obviously, promoting housing opportunities in our community and, making sure those opportunities for new housing are made available to our community. The city has been very proactive for decades in terms of developing affordable housing, and this goes all the way back to when the city had the residential development control system, which was producing the early affordable housing in our community, and we look to continue to preserve that. So in addition to preserving what has been built over the last four decades, it's building upon that with the new housing that's coming online. Another big aspect of the affordable housing program is ensuring people can stay in housing. Often, things will happen in our lives that can result in disruption.

And when people lose their housing, it is can be very difficult to get them rehoused. So a big focus of our work is trying to prevent, people losing their housing. And lastly, protecting housing and having, policies and programs in place to protect housing. Really, the guiding documents that drive this work is the general plan. In 2018, the city adopted the inclusionary housing ordinance, which basically says any new housing that's gonna be built in the community of Morgan Hill, we're gonna set aside a a percentage of housing deemed affordable housing.

In the case of housing being built in the downtown, we're gonna set aside 10% of that to be affordable. Elsewhere in Morgan Hill, it'll be 15%. Another, program guiding document for us is the Elevate Morgan Hill. This is a framework around economic mobility for our community. And then, on the homelessness and homelessness services we provide, we partner with the county of Santa Clara, and we follow the community plan to end homelessness.

As we manage affordable housing in Morgan Hill, we're guided by the, ownership guidelines that have been developed in partnership with Housekeys, our housing administrator. This slide really is representing all the verticals in terms of housing and unhoused services that the city provides. As I mentioned, the IHO or inclusionary housing ordinance, has two fundamental components. One is when we're building housing in Morgan Hill outside of the downtown, there's a 15% requirement. So if you're building more than one unit of housing, you're subject to the IHO.

If you're building within the downtown, the requirement is 10%. Currently, within our portfolio of affordable homes, on the ownership side, there's over 450 units that are affordable ownership homes. On the affordable rental side, it is just under a 100. And then another vertical that we play in in terms of affordability is we do provide down payment assistance. Several years ago, the city did get funds from the state of California under the CalHome and the begin loan programs, and these provide down payment assistance for first time homebuyers.

On the homeless services support, a big part of the work we do in this space is around partnerships. We do have an in house specialist, that was initially funded through Destination Home as a pilot, due to the successful work that Brian was doing. He is our in house specialist. We were able to make that a permanent position in the city of Morgan Hill. Within that framework, we also manage a safe parking program in partnership with South County Community Services.

We also oversee the inclement weather shelter, and then we work with partners like Saint Vincent de Paul, Saint Joseph's to provide down payment assistance or rental assistance or even bill assistance where someone can't pay a PG and E bill this month. We are able to work with our partners to be able to provide that assistance. Talked and have made reference to the different partnerships. We are a smaller community, and partnerships are critically important to the work we do in the world of housing. We have a very strong partnership with the county of Santa Clara, through the community development community development block grant funds that come through the county.

We're able to provide a lot of services to members in our of our community. Through partnerships with Rebuilding Together, we're able to offer assistance to seniors in mobile home parks for repairs to their mobile homes. And then we do a lot of community engagement with Project Sentinel and other partners, to make those services available to our community. You've heard me reference the IHO or inclusionary housing ordinance. This was policy that was adopted in 2018, and it really builds upon, a long standing effort by the city of Morgan Hill under the RDCS, which is we're going to be intentional about when new housing projects come in.

We want to set aside a portion of those units as affordable. So once again, those affordability, elements are if you're building in Morgan Hill outside of the downtown, we require 15% of the units be moderately affordable. If you're in the downtown, it's 10% moderately affordable. We do allow projects to fee out up to 50%. So if your project is, you know, requiring to build 10 units, you could fee out on five of those units and build the other five units.

I've already shared the number of units that we have under our umbrella in terms of affordable. It's approaching 600. One of the other key guiding documents, is work that our planning department, did a lot of work on, as well as the housing team in developing the 2023 housing element. And there are seven goals that are specific to the housing element. And within those goals, there are a multitude of things we have committed to the state that we are going to do.

At a high level, our goals are still focused on creating inclusive housing, in essence, making housing available to everyone, certainly preserving our housing stock that we have and continuing to grow it, and then making sure that we can address individuals in our community that have special needs, and adding policies, around that in order to support, more inclusive housing. When we talk about affordable housing, the the best way to kind of explain it is looking at our income limits. Every year, the state of California produces income limits by county. This table reflects the breakdown of income limits by category. So acutely low is, in essence, anything that's 30% or lower than the median income.

So the key number in this chart is to look at median income for a household of four. It's nearly $200,000 in Santa Clara County. Now I wanna remind folks, median is really middle. So half of the incomes are above that, and half of the incomes are below that. The median is $1.95 200 for a family of four.

So one way to think about this is if you're a single person and you're making less than a $150,000 a year, you're in affordable housing. You qualify for affordable housing. Please let that sink in. If your salary is less than a $150,000 a year, you qualify for affordable housing. Now I wanna juxtapose this because this is an important conversation.

Matt did a wonderful job of talking about the economic development efforts. All the work that Matt, Britney, and Chris are doing around trying to generate investment in this community, when you look at bringing those jobs, where are those people going to live? Now there's numb there's not a number on this chart, but I wanna leave this with you. When you think about Morgan Hill employers today, of all the different types of industries that Matt shared with you, there's only five industries that that average wage is greater than a $100,000. Let me say that again.

There's only five industries where the average payroll wage, this is based upon Morgan Hill employers, pays over a $100,000. So for all the good work our economic development team does, where are these people going to live? When the average home price for single family home in Morgan Hill is over $1,100,000? That is our reality. So when we think about jobs and housing, they are actually intertwined.

And I do wanna also leave a a great nugget, and I I'm gonna pull up the thread Matt provided in his presentation. I had the opportunity to participate in a meeting with this employer that is looking to move to Morgan Hill. And very impressed with the building space. The question to us was, so where are these workers gonna live, And how much to how how much does housing cost in Morgan Hill? Because they're thinking about what they can pay their employees and figuring out, can they actually live here?

There is this inner tie between jobs and housing. So Morgan Hill should be very proud of its leadership in in affordable housing. We still produce a lot of market rate housing. Once again, we're only setting aside 15% of our housing as affordable housing. That means 85% of the housing we're building is market rate.

So when you look at this chart, this is a reflection of, the amount of planning entitlements that have come into the city within this current cycle. And so this first column, RINA goal is what has been assigned to us is the number of housing units broken down by income categories that we need to achieve to meet our how our RINA housing goals. The permits issued is a reflection of how many permits we have done to date in these categories, and then the last column is what we have left. So we've already achieved the goal of low. We still have outstanding areas of very low, moderate, and above moderate.

I do wanna make sure people understand when we talk about above moderate, that's market rate housing. Typically, moderate housing is, at the highest threshold of affordable, and, typically, very low and low is rental related housing. You do not see very low and low traditionally as ownership opportunities. So ownership is generally in moderate and above moderate. Low and very low tends to be rental housing.

The other thing to note when we talk about making housing available to all, when we look at the family and household makeup of Morgan Hill, right now, there are over 5,000 families that need housing. So when you look at the breakdown of low, very low, extremely low, and the number of units that are available, And I really wanna draw your attention to the extremely low. We have over 2,000 families considered extremely low. There's only a 130 units available for those folks to live in. Are we meeting that need?

No. We are not. Once again, to give you a sense of extremely low income, extremely low income for a family of four is $60,000 a year. So keep in mind, our community is made up of many different people. We have very rich people, and we have very poor people in our community.

And we're looking to make sure we have housing available for all. Really daylighting some of the rental product that has come on market. Historically, Morgan Hills produced single family homes. In general, 70 just a little under 75% of the homes in Morgan Hill are single family. Just within the last couple years, we have built more rental housing, and these are some of the projects that have come on more recently, Village at Madrone, Royal Oak, and the senior housing.

Very important projects for our community. And then talking about what's in the pipeline. There are several housing projects under construction or just recently completed. And I wanted to draw your attention to this slide when we think about the makeup of housing in our community. We are still predominantly building ownership homes in this community.

When you look at the number of projects that are under construction right now, there's only two that are considered rental. The most of it is ownership. And when we say ownership, this is people investing in property and in building. So we continue to see a mixture of housing, and we're seeing a lot of townhome development, but it is ownership, type products. So this is people spending 800,000, 900,000, a million dollars because they want to live in Morgan Hill.

On our on house services, once again, talked about the the work we do in this space, and a lot of this work is done by Brian Malikdin. Very grateful to have him on the team. He really is our first point of contact when it comes to engaging with our own house community. A big part of what Brian does is certainly meet people that are, living in their cars, potentially living outside. But the other role Brian plays is working with our community members that are a threat at losing their housing.

We get a lot of calls of people, I can't make my rent payment this month. I've had a car breakdown, and I had to pay to get my car fixed, and I can't make my rent. So a lot of the work he is doing is triaging and trying to make sure people that are at threat of losing their housing can remain in their housing. And and for those that are unhoused, living in vehicles, or, living in tents, working to find them housing, and we do that through a range of partners. As it relates to the number of homeless in Morgan Hill, I, if we were conducting this meeting two weeks from today, I would actually have the twenty twenty five number.

We are looking to get the twenty twenty five point in time count number next week from the county of Santa Clara. But as you can see, the number of unhoused people in our community has kinda ebbed and flowed depending on the year. So we will have the latest figure for 2025 next week, and we'll be able to share that, once we have that figure. And then certainly, a little bit of praise to the work that, Brian has done. He has gotten over 600 referrals, and in terms of connecting with people.

So these referrals can be people calling the city, noticing someone might be sleeping in a tent on on private property. This could be, you know, the police department seeing someone needing services and a referral. One of the key intakes that Brian does is what's called a VI SPDAT, which is a vulnerability assessment. That is the first way to get someone into housing, and this is a county approach to addressing homelessness in the county. So county, so Brian is able to conduct a survey on-site with individuals, get them in the queue for housing.

So as housing becomes available, we're able to slot people into affordable housing or rapid rehousing within Santa Clara County. And then finally, what's on the horizon for the housing team? One of the big things we are looking to do by the end of the year is update the inclusionary housing ordinance. We continue to learn, as we implement the IHO. And more recently when we did the housing element, one of the areas we want to improve upon is, racially concentrated areas of affluence.

This is particular areas within Morgan Hill where we really don't have affordable housing in our community. So how can we work to ensure affordable housing is more dispersed within our community? So looking at some policy changes within the IHO to accommodate that. The housing element, when we, got approval for the housing element, we we outlined a lot of different tasks that we were gonna do. And so some of this is rent stabilization issues, looking at making changes to the various zoning districts to maybe allow for greater density within some zoning districts.

So there are a lot of tasks within the housing element that we are looking to achieve, and we will start to tick off some more of those items as the planning division has been very active in in achieving the things that we said we were gonna do, but there's still many more things we need to do. And then we have also started to work with the county on the update to the community plan to end homelessness. So this is kind of the county's approach in collaboration with cities on identifying, programmatic things we can do to help, reduce or end homelessness in Santa Clara County. That concludes my presentation. I am happy to answer any questions.

Great. Thank you so much. So I think what we'll probably do is, just so we're all aware of the time, it's 08:55. So I think we will just maybe start off with any clarifying questions for, today's presentation, and then we'll go ahead and go back, one by one by commissioners, and then just have that open discussion. You know, commissioners have any comments and so on. So first off, any questions in regards to the presentation? I got them. Yeah. Please go ahead.

Do you mind

if you wanna go outside? Yeah.

Yeah. Any questions so far?

I had two questions. Sure.

And then, once again so we'll start with the questions, then we'll follow-up with comments and other feedback.

Yeah. These are actual questions. The first is there's a slide in the middle of your presentation that's called what is the what is the knee? And could you explain that the there's a need to provide 5,600 there are 5,630 families in need of affordable housing, and there's 1,200 available units. So the presumption is that somehow those are gonna get married together, which still leaves about 4,000, families that don't have affordable housing. So could you explain how that works? Because what are they all on the street, or they in another city waiting to come in? Or

Really appreciate the question. Thank you. So when you when we look at census data and analyze, you can break census data, down to households and then income levels. So what you often see is people doubled up or tripled up in housing. So if you were able to unbundle folks unbundling is not the right word, but where you have multiple either generations or multiple families living under one roof, they do that in order to afford the rent in that particular apartment oftentimes.

So if we were able to build more housing at that level, that would allow for them to move out and get something that is affordable. So that really reflects the doubling up of housing that occurs in a lot of communities. The other thing I did wanna touch on, and this goes back to, part of the conversation under the the economic economic development umbrella. So I do wanna touch on the issue of old motels. Old motels to some degree are your affordable housing.

It's where people are staying at night because it's in ex it's inexpensive. So when you go by some of the the motels on Monterey, you will often see the motels are very full, and it's actually de facto affordable housing. So as much as on the one hand, we may want to see investment and improvement in that property, those properties are also ways to provide shelter for people at a fairly affordable rate, because the rates that they can charge, because it's old, it doesn't have the amenities, does provide people shelter. So you find people may stay in a motel two nights and then be in their car five nights. But it's a way to get a shower, get cleaned up for a night or two, and then go back to living in your car.

So we do see those things that happen as well.

John, that that is really enlightening. I had no idea that that's part of our population that, is in seek seeking affordable housing. What that means then, when we say there's 45,000 residents in Morgan Hill, 15,000 household, three times 15 is 45,000, that there's another group that is not being counted who are kinda transients that live in motels, that live with friends, and you therefore, you have these multiple families. So, actually, there's more people who call Morgan Hill their home, but in a sense, they're sort of homeless, meaning they're not homeless. No.

They they live with somebody else. I I had no idea of that. And then that leads to the other question. There's one group, I guess, that are homeless due to circumstance, and that there are others. I I believe there's homeless by choice that if given the opportunity, they they would prefer to be homeless.

They maybe the majority, however, fall in that first category, where if they had a choice, they would want to live in a home, which essentially means these are people who are in search of jobs that will allow them to afford the housing. And when I I I look at the, the number of homeless count, the 230 in 2023 and 2025 were by next month by this month, we hope to have a count, and it may be more or less. And if it were more than two thirty, somebody could deduce we're failing because it's getting worse. On the other hand but, actually, we may be really doing a great job because, more people are coming here because there's a a great success rate of of moving people into homes. And so my thought was, is there a way where you could have a metric where rather than just count the homeless, it's really counting the number of people who transition from homelessness to homes, you know, homelessness to homes, which isn't just building a home.

You gotta afford it. And that means a combination of things. I've never seen something like that. Is that feasible to have a transitional number you they got placed into homes? Just like people get placed into jobs.

Thank you very much for the question. So I can speak to this on two different fronts. So the first front being we have a safe parking program. The safe parking program is done in partnership with Morgan Hill Bible in South County Community Services. There are nine trailers, if you will, on that site that allow people to, whether they walk or drive, but they have, in in essence, a trailer to sleep in in the night.

And then there are services offered when you go there. We are tracking who's coming. We every year, we get details on how many people were actually transitioned from going to that site actually into housing. We do provide that as part of a budget update annually. It's buried in the budget document, but we do provide that information about the number of people that went through safe parking and those that were actually to secure housing because they were getting services on-site, and they were getting enrolled into, the VI SPDAT, which helps transition them into housing.

That's one. The second one is the collaboration we have with the county. So we do get figures from the county of the number of people that have gone from, being temporarily temporary housing situation to being housed, we also get information, those that were unhoused that would were put into transitional housing. That is a figure we also put in the budget document. For us, the metric we chart, we really flag is the number of people we are trying to get into the system.

That's a part of the biggest hurdle is getting people into the system, and that can take some time. So sometimes Brian will have to visit someone five times just to build enough trust to have them provide some very personal information about themselves to fill out the survey and get them started on the role to getting rehoused. Thank

you. Alright. Questions, Commissioner about it?

Yes. So thank you for the question about the metrics. That was green. Mine is how we're measuring success with the current program and what we're willing to offer now. I'm assuming we have no rapid rehousing here in Morgan in Morgan Hill. We do not have bridge housing. We're not there yet, and, hopefully, we don't have to be. Safe parking, though. Can you elaborate on that? Because a lot of safe parking is mom and children only, male only. Is this anybody and anybody who would stay there, or are there specific dynamics? Because when you hear safe parking, there's sometimes that come with stipulations and rules.

Very insightful and excellent question. And, yes, Morgan Hill's safe parking program is a little bit different than other communities. So our safe parking program is really for women and families. No single males.

Mhmm.

That is an area where Morgan Hill is deficient. We do not have an outlet in our community to solve that population at this point in time. This is an area where we've had conversations with the county on what we could do. Your point is a a very important one. This is often a challenge, where there are some stipulations around who can be in the housing situation.

I did wanna go back to one other comment, if I may, which is we actually do have a couple rapid rehousing sites here in Morgan Hill through our partnership with the county. So, for those that are, maybe not so familiar, rapid rehousing is typically someone that has been unhoused for anywhere from a month to twelve months, and this is their first time back in housing. So there are a couple more projects in the pipeline that will have a couple units available for rapid rehousing. We do not have any housing that is 100% rapid rehousing. It typically is a mixture.

So, you know, 15% of rooms would be rapid rehousing, 20% for veterans, and the remaining for farm workers. So we don't have anything that's 100% rapid rehousing. It tends to be a mix, but we do have some rapid rehousing that does exist in Morgan Hill. That's perfect. Last question. So I know Brian's working with

a lot of service agencies. Morgan Hill PD. Is Brian working with a specialized unit or mental health crisis unit within Morgan Hill PD? Do we have a designated unit that works with them on that?

So, our collaboration with PD is, really good. We do have, we have an internal encampment meeting that is made up of, Morgan Hill PD, our code compliance division, and our public services division. When it comes to mental health mental health, we have a partnership with Pacific Clinics. So whether it's Brian being first on scene and doing assessment and whether a Pacific clinic whether the services of Pacific Clinics can service that individual or PD will tend to make that referral to Pacific Clinics depending on their assessment of the situation. So, that is the local resource provider we use when trying to assess medical conditions or medical issues for our in house population.

And then getting back to the encampment meeting, this is part of that information share. What are we seeing? Are we seeing maybe a particular individual move around in different places, being able to kinda track and make sure, you know, we know where there's some hotspots in our community. If someone moves around, we're trying to get a hold of them. I know, at one point, Brian was trying to locate an unhoused individual because we actually secured housing for them, but they had moved on from where they had normally been geographically.

And it took a good week for us to find this individual to say, you actually can get into housing today. So there are some challenges, with providing the service. So I hope that answered your question.

Yes. It did. And before I forget, one more thing is your slide on the income limits. It's great, but you'd be would hit even further if you connected this annual wage to the jobs. For example, Morgan Hill PD officer makes less than that. A teacher makes less than that. Your average city employee makes less than that. So if you connected the job to that number, people at home might understand a little bit more when you start talking about, well, who do I wanna live next to? These are the people you'd be living next to. So just wanna throw that out.

If you added a job listing to that annual income, that might register more with the community. Thank you.

I love that you said that in.

Thank you. Thank you,

Questions?

First of all, I I think we had some really great presentations tonight. So first of all, wanna say thank you. Excellent present

Yeah. Take me back on

what David said because, in your presentation, you're giving a number. You know? So many families is is a number, and these are the people we were able to count 230 or whatever. It would be great to understand the composition of that number to make it real, to make it more human. Like, how many are children?

How many are women? How many are elderly, also the primary language that they have. For example, Brian may be multilingual. I don't know. But if you find that an overwhelming percentage of the unhoused population is speaking a language that Brian is not versed in, it might identify additional areas of, help.

So to flesh that out a bit in the data you're gathering, I think would be beneficial again to humanize the data so people know exactly what's happening. If there are drug dependencies, you know, in America, this is an unsolvable problem. But I credit Morgan Hill for providing care and having a heart for the people that are in need. So thank you.

Thank you, commissioner. Questions in regards to the presentation?

Questions. Yeah. Oh, yeah. First of all, I want a second for what commissioner Lake said. A great presentation, John. Great presentation, Matt. I think we've been we've been getting updates and reports on the housing and homeless program here for years at the planning commission. The statistics will tell you one thing, you know, and these numbers are mind boggling to see how many people qualify and the amount of salary you can have and still qualify. I still think you guys do a fantastic job. I think Morgan Hill is a poster child for a lot of the cities.

It's a struggle. I mean, it's almost an endless struggle. I I don't envy the job. But putting all that aside, I think you do a fantastic job. Not just you, Junsheng, the staff in general and the people involved. It's great to see it, and it's very much appreciated. A couple quick clarifying questions, and then I we're gonna come back and do some commentary. Right? So the downtown the down payment assistance, I get you. Is that a loan or a grant? Do you give it, or do you loan it?

So the down payment assistance that we have, it is a loan, but the way the loan works so is this is kind of critically important. You don't pay the loan until you sell the property. Right. Right. So, effectively, it's operating as a grant. So you're you're paying an interest up to the like, a $50,000 down payment, but we won't collect it until you actually sell the property. So it's really creating that bridge opportunity for folks. So it is technically a loan, but it doesn't get paid till you choose to sell

your app. Okay. Because I think but at least it comes back into the site at some point to use it for somebody else. Right? That's why that was a purpose of my question. Okay. You said also said projects are allowed to fee out up to 50% of obligation. I might be wrong, but recently, we have a huge project over there on the East side of tenant area. You know the one I'm talking about? I thought they 100% paid out on that.

Yeah. The code does allow up to fit so I should have been more clear. So I appreciate the clarifying question. The code allows up to 50% fee out if you're gonna do something alternatively, I. E. A 100%, it requires council approval. Okay. That's what happened.

Okay? So you can go up to a 100%, but you gotta get, right, approval. Yeah. Okay. Good.

There was one other question. Okay. I think I got the other question. So you said 5,000 Walker Hill families need affordable housing. That's 33% of the population? Well right? Of of the families? We have 15,000 families? Yeah. Did you say that, Wayne? 15,000? You don't know.

So 45 he he was talking about it's a percentage of the population. So there's roughly 46,000 people in Morgan Hill, and so the ratio we were reflecting was the number of individuals as a percentage of the population.

Right. But if if an Allen family is three, let's say, then it is about a third.

Is it? No.

What is it then?

No. The math doesn't I don't

know. What it refers to is the number of households that contain more than one generation or an extended family member. So there's a household in that particular unit that may be for four, and they got six or seven living there because it's multigeneration. And for purposes of unhoused people, that multiple generational thing says there's looks out of it. There is an apparent need of that number of units.

The only caution I would apply is in some cultures, multigenerational housing is just the way they do it. Right? So we gotta be a little careful. Is it really quite that high, or is some of that natural cultural multigenerational? But the number that's where the number comes from.

So, John Correct. Appreciate your answer. I'd rather hear the answer from you. Right? So what is the answer? Like, you said 5,000 families. So is that is that a correct statement from that?

So it it the the number is correct as far as what the census tells us around income. But Joe is also correct in that some of the grouping of families that I talked about naturally occurs because it is a cultural thing. You may have your grandparents, an aunt and uncle in your union. So there is a cultural piece to this. So the the number is 5,000.

That that is a true statement. But how much of that is driven by a culture thing versus a need? I'd say the culture thing is probably a smaller percentage of the 5,000.

But put that aside for saying, I'm just looking for a rough estimate. If if an average family is three people and there's 5,000 families that need, that's 15,000 out of 45,000 residents. That's 33%.

Yeah. One once again, when you look at the income limits. Right? Yeah. No. I understand. We're in this very weird bubble in Santa Clara County, and that is the that is the reality of of it.

We

have we we have an aging population, and that is the other constraint that Mhmm. Occurs is our population is getting older, and they're aging in place. So we're also not getting turnover good. In stock. It's been put place.

Yeah. Yep. Alright. Thanks, Jim. By the way, last time, you you you guys still do a great job. So

Commissioner Dan. Commissioner Mueller, do you have any questions in regards to the presentation?

Yeah. A couple. First one, the regional housing needs assessment chart. The asterisk is it's through the 2024 APR report, but you said it's up to date.

So that so, we reported in March, April. So that reflects the permits effectively through the 2024. So that is our most recent report to the state.

Right. So, you know, I'm I'm sort of looking at it and says, okay. We came out at the last progress report. We're on the good list. Right? My question is is the next check for us should be two years from the last one?

Yeah. So HCD reviews it every four years. So from the next time that we review it is within the next two years.

Okay. So the question is, are we still making that kind of progress? Where are the newer units coming from? Because when I looked at the projects under construction, several of them are, like, nearly done. Right? And so all those units are baked in, or they're not baked in yet. So what's what's happened since that report? And I'm asking a harder question. Right? Is are we making the kind of progress we need so that there's a very high probability we're gonna be on a good list again?

I would answer your question this way. Based upon what we have seen come in and the conversations we've had with developers and what we know is in the pipeline and when we do this report in terms of, so you have to remember there's this little bit of a disconnect between what's being planned for and what we get building permits for. Right. But based upon what's in the pipeline, we we will definitely hit our arena targets. The the area we always tend to struggle with, and this is true of most communities, is the extremely low.

And so that is the space we kinda need to put a little more attention to and working with, an affordable housing developer that can do that product type. But we are on target to hit all of our arena goals for this cycle.

And the extremely low is half of the very low.

Right. Right. Right. The yeah. I just I guess I'm looking for numbers and how they play out by what we think the project is, and I'm qualifying that by saying if we do it to that level of detail, there's still something that might happen with a given project given, if wanna pick on one, Magnolias, which just went through a huge hit from when that project started as to when it got going.

Right? So something like that is always there that could happen, but I guess I'm just in the middle state is is how does that projection work? Where which project's delivering those kinda units? Right? And I expect extremely low to be the hardest one. Right?

It definitely is the hardest one.

Yeah.

We don't our projects don't hit the, project page until they're complete. So we have a continual stream of new things that are coming in that we are working with to get to that point of having a complete application. So what we're sticking with here is what goes into HCD, and we tie it back to the APR report. We tie back our population estimates to the APR report because those numbers come from the Department of Finance, and they're all '20 20 '4. We can give a picture of where we are to date, but for the tables and the official documentation, it ties back to the APR report.

Okay. I I'm just still looking for something that details out where we're headed a little bit. Right?

We we have something that we'll show you in a bit.

Okay. The other one is on the inclusionary how housing ordinance, and I think you clarified it a little bit. But on the first half of the inclusionary house of the 15%, is it the developer says I wanna do it, or if we need the money for other for the purposes of what we need, do we just let them do it? Because the way I first read it, it sounded like most projects would just opt out. Right?

Because it would be potentially better. But I think we we don't always want that. Right? We want them to do all the affordables. But by the same token, what you didn't talk about is that we really need some of them to opt out. Right? Because we have an absolute need for that money because of the how or the financial stack that is required for the rental, especially the rental projects. Right? And that's the piece that I think is left out a little bit that would help everybody understand why we may take money sometimes instead of building a unit because we absolutely need it.

Mhmm.

Right? And and that so it it sounded like when I read the line by right, gee, if I was a developer, I would maybe pay the fee. Right? Because it would give me some units to to to work with. So I think that would help clarify things a little bit. Right? Yes. And everybody needs to understand that on the affordable housing stack, on the rental projects especially, It's a multi financial stack. You don't go out and buy one loan. You get x amount of grants from here, and you get money from here, and you get money from there, and it deals with city, state or city, county, state, and federal areas to do it.

So it's an extremely complex picture, and we need to have money to help contribute to that because if we have enough money to contribute to it, we can really have a little bit of control over the project. Right? And if we don't have very much to do it, then the first two placers in there, they have the control. Sure. And and so we we need to get to that.

For sure.

Thank you, commissioner Mueller. I I do appreciate those comments. Just I gonna ask if you wanted to ask those clarifying questions.

Well, okay. So the

And then we'll come

back to clarifying question then is on the what's the need? There's numbers on here that are, I think, for sale units, but it doesn't talk about the rental. But the the context of what we're talking about, it's just the the 400 doll or 480,000 or a million and a half number on that chart.

Yeah. So once again, I think the way to think about that chart is and as we've discussed, you aren't really ever going to see extremely low ownership units. Absolutely. Right? So that, by default, is gonna be rental.

In those other income categories within the chart you're referencing, that can be both a mixture of ownership and or rental, and we do see that at the moderate level. So Right. A great example of that is the Vida project where there is ownership, there is rental, and there's affordable rental. It is a mixture of owner ownership and rental types and product types. Right.

So that's a big enough project where you actually got a intermingling of many different types. So, you're gonna generally see, to your point, at the moderate level, that's mainly gonna be ownership. The low extremely low are going to generally be in the rental market space. So I think the table is more indicative of the need, not necessarily the product type, but we know based upon the financials of that building, how that need is gonna be met is it it needs to be rental versus ownership.

Yeah. Yeah. Yeah. For now.

Alright.

So we'll come back for some additional comments. Edith, I did see he did come up. Did you have any? Okay. Perfect. Thank you. So what I'll do now is, I'll go ahead and open the the public comment. I'll bring it back to the commission for any final final comments that they'd like to share or any other feedback. So, Jenna, do we have any

We have Doug Muirhead. K.

Good evening. Again, Doug Muirhead, Morgan Hill resident. First, wanna say it's a pleasure to see mister Lang back at the city. Mhmm. I'm looking forward to lots of fun GIS data renderings in the future.

I have one question on housing, and I have three comments on the unhoused. On the housing itself, we've got this nice slide on affordable housing, need 5,600, available 1,200. When the when you talk about the below market rate portfolio, talks about ownership and and rentals, about 5,500 total. What I don't see is the the need side of that. Do we have a waiting list?

Do we have a some some way of judging how we're doing in in that area as well? Then moving on to the unhoused, I wanna flip the unhoused specialists in safe parking. Start with safe parking because this is something the city did in conjunction with Morton Hill Bible Church and South County Compassion Center back in 2017. It's been running a long time. It may have been one of our our first efforts, and, you know, it just really is an excellent program.

You heard a lot about it. They also have showers. They also have laundry facility as I believe they they may have some food provided as well. So I've I've always been very happy with what the city did in that area. I'm also very happy with the the on house specialist, Brian. He was originally funded by a grant. We thought with a grand ending, we're gonna lose him. The city did the right thing somehow and put him on in full time. I've talked to him because I have a tendency when I'm out cleaning up the streets. I see ripe bananas in an entryway, and I think that's garbage.

I should throw it away. And then I talked to Brian. Well, it could be somebody's food supply. So now I'm a lot more sensitive to if I if I'm not certain it's really trash, I leave it alone. Like a squirrel, I mark the location. I come back in a week. I've also done several referrals to him, and, really, my only complaint is because of his privacy concerns for those people, I never get any feedback. So I don't know if I'm helping or not. And it would be nice if, you know, you could let us know that we're helping. He's obviously being successful, and he's getting lots of referrals from others, so that that's good.

And then finally, I'll end with my typical glass half empty talking about extreme weather shelters because I have an issue with both the city and the county library system. We provide support only during employee work hours. So I say it's we we treat it as an amenity rather than a service. If any of you don't have air conditioning, you will know that on holidays and weekends, we have had 100 degree temperature days. And I really think we need to rethink our approach. The county came just came out with an appendix to the the hazards.

Good. Thank you, mister Mira. I would like to conclude. Your your time is up.

I wish we changed that. Thank you.

Great. Thank you.

I don't see any more raised hands.

Okay. Great. Thank you so much, Jenna. So I'll go ahead and bring it back to the commission. Edith, please.

And, again, good evening, commission and teammates and members of the public that are still with us tonight. Thank you for the really good conversation. Thank you to the team for the preparation and the good information we have shared today. I want to join you with a couple of sort of high level connecting the dots conversation, recognizing that it is late. And I think Jennifer also has another presentation that she wanted to share with you.

So I will try to be succinct, but I do think that there is an opportunity for for us to think about the global sort of, well, what do we do with this information? What does that mean to us at the planning commission? What does it mean to the city council and to the community? First, I will start with economic development. I want to share two thoughts.

One is our economic blueprint is still very relevant even though it was done in 2017. And why do we think that it is still relevant? Well, it is for you to tell us that it is not. But just a year ago, we went through a full review of the economic blueprint, and we looked at the direction that it provides, should we be looking at a different direction? Has enough time has changed?

And at that time, and this is this is about a year ago, we and the city council specifically felt that the four industries and the direction the economic blueprint identified is still very much relevant to what we should be doing. You should also know, and I think the planning commission knows, we are part of a cohort of economic development professionals throughout the region, and we meet with them monthly. And we check notes, and we check best practices. And I can assure you that Morgan Hill is looked at as a community that is, capitalizing on the most of of the economy based on on our, DNA and where we're at within the region and that we are seeing as a community that has been intentional to capture our fair share of economic development. Now in looking at, well, what else could we do?

As Matt mentioned, we have there's a lot that is happening at the macro level with the economy that we cannot change. The question is and has always been, what can the city do to attract and retain, economic development investment? So what does that look like? It is and it begins with the rules, the policies that the city has. You, as the planning commission, have changed the zoning code multiple times to streamline some of the uses that we want to attract as part of our economic blueprint.

So thank you for that. When I think about the conversations that we have with potential users right now, the the concerns that they have is going through a CUP. A conditional use permit is concerning for folks, not just because of the cost, but is the time and the uncertainty. So if there were other futures in addition to the PD amendments that Matt is gonna be bringing forward, you know, considering continuing to the the work that Adam and Jennifer do to continue to fine tune the zoning code, I think that that is a good change. But I will say that as successful as we have been, Morgan Hill, we have to fight for every bit of economic development.

Unlike other cities throughout the region, Morgan Hill has to fight to attract those investments to the city. We invest so much time and energy, you know, marketing, promoting, getting out there. And then once we have someone that is interested in coming and hopefully we get it through the entitlement process, then there's the other, phase of the work, which is keeping the project alive. And when you have projects that the cost of those investments have doubled, how can those those those projects push forward? As Nat mentioned, we have a hotel fully entitled, has changed hands twice already.

And right now, we have missed the window to get that project up and running. So a lot of the work that Jennifer does and Matt in the house is keeping our projects alive and trying to be as as flexible as we can with our, business community. On the housing side, a really good conversation on the housing. I also want to introduce in the room, we have Crystal Zamora, who is part of our housing team. I don't know that she's had a chance to get introduced to the Planning Commission, but she supports, John.

On the housing side, I think that a couple of things that I want to highlight for you. On the housing side, as we know, a lot of the development, a lot of the concerns kind of bridging economic development to housing. One of the things that we are very mindful is with all the state regulations and all the paths forward that the state has provided for housing, On one hand, you know, it it allows housing to get constructed throughout the region. On the other hand, it really challenges our economic development plan because now we are fighting to keep and retain our job generating lands that are now, you know, subject to getting housing on those sites. And then the question is, are we as a city better off with housing over those sites being vacant?

And my message to you is that while housing provides good property tax revenue for the city, housing turns out to cost more money to the city in the long run. Job generating uses, industrial and commercial generate sales tax. Employees, commissioner Downey, you had asked what's the value of employees. Employees, here spend money, whether it's just gas or eating out at our restaurants, but, also, it provides quality of life for our residents so that the more jobs that we have here, the less commuting our residents need to do. So on the housing side, we are doing a a really great job in advancing our housing.

The community gets concerned as to the kind of housing that we're getting. And one of the slides that John went through, and I want to underline, the majority of the housing that we have is single family housing. The community doesn't know that because what we see is the projects that we might not be comfortable with because they might not represent the Morgan Hill that we're comfortable with. But the reality is that the majority of the housing that we're building is single family housing. So that doesn't change how people might feel because we have some projects that don't feel comfortable.

We have some projects that are gonna be coming soon that are taller and more dense, and they're gonna challenge our parking. And we are trying to figure out as a community and then the question for us, this is a workshop. So how do we plan ahead? As a community, we already talked about the need to support the families that currently live here with us and need affordable housing. And as these affordable housing projects do come through, how

do

we as a community live together and coexist? And how do we change the way that we behave? Because now, more than ever, now we need to share spaces that we didn't have to share before. This the parking on the street now has to be shared with, not just our families that we may choose to like myself and many other families, you know, store a lot of our goodies in the garage and choose to park on the driveway or on the street. And I think that that is part of our growth for us as a community is how we're gonna grow.

And the question for us is who do we wanna be in the future? How inclusive do we wanna be? To that end, I will also say a couple more things on the housing rental product is also inclusive housing that allows economic development to bring the jobs to this community and allows more families to live in this community. The economic mobility program that we as a city are advancing is the bridge between them two. It is what happens between economic development and housing.

And why do we do it? We do it because Morgan Hill, across the board, our residents today, over 50% of our residents are cost burden, which means that they're spending more money on housing than they really should. And 28% of our residents today are in some form of financial assistance. A thousand Morgan Hill Unified School District students are consider housing at risk, not necessarily homeless, but there is a a different, term that is used by the school district. That's a thousand of our students that are maybe at risk of being homeless or are considered homeless based on, the Morgan Hill Unified, metrics.

So with that, we recognize that there is a balancing act. This this stuff is more than science. It's a little bit of, trade offs that we have to support economic development, housing, and the bridge between the two that supports the entire community. Thank you for allowing me to share these comments to bridge the two conversations. With that, I know that we are late in the evening and that Jennifer also has a couple other slides that she wanted to share with you tonight. Finished.

Yeah. Thank you so much, Yida. I think you summed it very well. But yeah. So what I'll do now is I'll go ahead and bring you back to the commission, in regards to some comments you'd like to share. I know that the time is now 09:42, so if you'd like to be succinct in some of your comments. But, again, this is a an open format. So if you have any comments to add to another commissioners, you may very well do so. So, commissioner Tanda, any comments?

Just one question.

For John, And that is, in the past, the city wasn't that supportive of ADUs. There

are

some advocates in the community who were. Now it seems like there's a tidal wave of ADUs. Do you see ADUs as a possible solution for the homeless? I I believe I understood correctly that it's, conceivable for somebody to build an ADU to, split your property and sell that ADU, including the property, to, another individual at, I would presume, at a very good price compared to the, median. Do you again, ADUs, do you how do you see that fitting into form formula for, affordable housing for the, those in need of housing?

Thank you, commissioner. It's a great question. It is interesting right now. Morgan Hill does see some ADU development, but we're not seeing it in the same volume that other communities are seeing it. I think I'll speak for myself.

I what I am seeing is I'm building an ADU for my mother-in-law. I'm building an ADU for an aunt or an uncle. We're not really seeing it be used in a fashion of I want a tenant or some other function, at least right now. We have seen a steady increase in ADUs, but we're not necessarily seeing the volume here in our community as we are in other communities. I would say we are certainly making it very straightforward.

We have a whole gallery where people can look at plans and go, I wanna do that and literally submit for a building permit. So we have made the process very straightforward for people to do it. I think this conversation will get more elevated certainly

when

we get into the next housing cycle and when land might be less available, and how do we start to achieve some of the goals that we've talked about in Reno. So I it is going to be a conversation that will come up more and more. But to your point, we're not really seeing people take advantage of it right now. It seems to be solving family issues right now from a staff perspective.

I would I would

like To clarify on how that would happen. So there's two ways you could sell an ADU. We are only able to do one of those ways in Morgan Hill, and that's using s b nine to split a lot that may have an ADU on it. There's another way to do it under state law, under s b 10, where and we brought that to you to talk about condoing an ADU and selling them separately from the house all on the same lot. That would be something the city would have to opt into via ordinance and and to to make that be able to happen here.

So we're not there yet, as John says. I can attest that a lot of the ADUs we're seeing, are really for extra family, And I'm feeding back a bit on my mic. I don't know where that's coming from, so

I

apologize. But what we're also seeing is more than one ADU. Every house in California can have three. And so but we haven't seen people really building the multiples as of yet, but we do expect that to start happening. So

Commissioner Thanh, any other comments or questions? Okay. Commissioner Leik?

Yeah. John, I just had one more request. I talked about the composition of the of the population of the unhoused. You have two slides, and I'll the you know, one is called the Morgan Hill homeless count, and that goes back to 2013 and just has the year and the count. Then on the following slide, you have the homelessness program accomplishments where you're talking about a slice in time currently where you it says a 168 housed and one hundred and ninety three prevented homelessness.

It would be good to have a trend line with those statistics dating back to 2013 as much as you have it so we have a historical picture of what was accomplished, as you go through just so that we understand the work that's been done and the work that's been accomplished, you know, since 2013. So that those are a couple of suggestions for you. What do what do you think about that?

Just wanna quickly clarify. I appreciate it. We'll definitely take it under advisement. That's really reflective since Brian's been here, and my understanding Brian's been here only four years. So that last slide reflecting the placements, that's a reflective of his work since he's been here, which Mhmm. My understanding is he's been here for about four years. So it wouldn't necessarily go back to 2013.

Mhmm.

But to your point, I think we could certainly do a better job highlighting kind of it on an annual basis what does that look like. Thank you. Thank you.

Thank you, commissioner Lake. Commissioner

Yeah. I'll jump it short. So,

you know, it's interesting that these two topics came together tonight because I think it's showing how every triangle is together. Right? You know, you got a tough job in economic development trying to do what you need to do according to your economic development plan and strategy. Eat it if you don't mind publicly. I disagree with you. I mean, you know, you asked us for opinion. I'm giving you my opinion as commissioner. Do I think your strategy is working? No. I don't. Right? And when you made that assessment last year, you didn't include us. The city council stopped including us in conversation seven years ago. Haven't had a joint conversation for how many years, guys? Six, seven years?

Yeah. At least. So maybe, you know, they might think about pulling us in more into those conversations, not as a public participant, as an actual planning commissioner so we can give some inputs. My my only concern is that I don't know how to solve the housing problem. When you think about, you know, a great point, David, about a police officer, a teacher, a nurse who might show up in a hospital, you know, none of them can afford to live here. Right? And I think this is the challenge, but you you gave us a case in point about having an actual conversation with someone who's gonna take over a major industrial area. And the first question is, where do people live? I'll tell you what. If it's manufacturing, advanced manufacturing, and if you're not an executive, you're not living in Morgan Hill.

Right? If you're on a single family income. Okay. Maybe some people would be on, you know, two incomes, and they could afford to do that. And I think that's a challenge. And I think as the we and you and the council get together, they have to have a triangulated conversation around how do we make it all work. Because I wonder sometimes by bringing a big manufacturer to town, am I solving a problem, or am I creating a problem? Honestly. Right? Or maybe I'm solving one and creating another. Right? Thanks.

Thank you, Trane.

Some of this conversation could go on for hours. Think the important thing is somehow in here to show how difficult it is to finance the rental affordable housing in the extremely low because I don't think the community understands how difficult it is and how important it is to do it. Right? Because it just takes a financial stack that is very complicated, and we have to be able to work quickly to to make it happen. Right?

And we are seeing bigger projects because getting the financing and getting it to do the smaller number at the density the state requires leads us to bigger projects. Right? And we're gonna have to understand that they're gonna be there. They're gonna come with some complications, but they we have to do it. We have to do it.

We have to stay on the good side on the good list as we move forward. I'm really concerned about getting this sort of off the table and getting on to the next table go on to the next one. Right? Because the land use and that is gonna be much more of a difficult conversation. Right?

And and the sooner we start, the better off we'll be because the developers were somewhat caught by surprise by Builders Remedy this cycle, they won't be the second owner, and the landowners won't be uneducated. They're getting educated very quickly on on what's going on and what the possibilities are. And if we have a gap and we don't get approved very quickly right at the time we go out the gate and we open up just a little builder's remedy, we're liable to see a whole different story than what we saw this cycle.

Mhmm. Thank you so much for this conference, mister Miller. I just had a a brief question just in regards to one that had been asked before, but this was in regards to the the arena categories. So, typically, it starts with the the VLIs and goes all the way to above moderate. I I did see some mention somewhere in one of the the slides that it talked about an ALI. I don't know if that's an actual category, but it was, like, absolute low income. Is that arena category, or is that another category that the state cracks?

You're referring to acutely.

Acutely. Yes. So

it it is a terminal. So it's not, by definition, part of the RENE, but acutely low is less than 30% of AMI. So it is it there's extremely low, and then there's acutely low, which is very, very small. It's acutely low is not currently arena designation.

Okay. Thank you for that. And just one

And so so a ALI is acutely low, so that's something that, HCD, the state, is pushing towards now. It's not gonna be included, as John's mentioned, in the arena or in our upcoming APRs. But for our next housing cycle, it'll be something brand new that we would have to report on. For the APRs, possibly starting next year, might be two years. They ACV is gonna ask us to start reporting that information on the APR, but it's not gonna be required.

And then for the income limits for those, I believe the extremely low is 30% or less, and then the acutely low is 15% or less. Correct.

Thank you for the correction.

Good to know. Thank you for that. And just last one, know is, mister Muirhead had actually asked this question. And first of all, thank you for your your volunteer work that you do with the cleanups. His question was in regards to, I believe, if I understand this one correctly, it was around BMRs and whether there was, like, a wait list or an update on a wait list in regards to some of that info.

So just by way of example, we have a a unit that's come online. If this is a 30 year old home that has been in the BMO program for a while, the tenants are moved out. We have an interest list of over a 100 people competing for this one of forced housing. So there is always strong demand when we go out. We do just so everyone is aware, under our policy, we do give a preference to if you currently live in Morgan Hill or you currently work in Morgan Hill.

So you jump to the to the top of the list if you are able to certify one of those categories. But, yeah, this recent BMR lottery we're doing, we have over a 100 people applying for this one unit.

Interesting. And, for the top of the list, is that, like, the top 10 folks, top 20 folks? How how how high is that top of

the list? It just depends. So Okay. If there's 10 people that have that designation out of a 100, those first 10 will be at the very top of the list. It could be 20. It it just depends. A lot of people will look at a unit, decide I wanna put my name in for that lottery or not. So it it ebbs and flows, but historically, we get anywhere from 80 to over a 100 people applying for one one unit.

Right. Thank you so much. Alright. I think that was it for the presentations. Thank you so much again, Matt. Thank you, John. You did a phenomenal job with your presentations. And so I'll go ahead and bring it back to, I believe, our director's report. Mhmm. So

on the director's report, I think we're gonna hold off on the presentation. We'll share the presentation with the commission.