Planning Commission - Regular Meeting

Welcome everyone to the Millbury Planning Commission regular meeting of August 4th, 2025. We received a request for virtual meeting participation for Commissioner Wong. Commissioner Wong, we need to ask you a couple of questions to ensure the requirements for your remote participation have been met. First, could you please generally describe the circumstances relating to your need to participate remotely?

Yes, I appreciate your consideration for this remote request. Currently in the Bay Area off site, taking care of elderly parents with congestive heart failure.

All right, thank you. Can you confirm that you'll have audio and video throughout the meeting?

Yes, I know video and I hear you clearly audio throughout the meeting.

Okay. And please disclose if there are any individuals over the age of 18 present in the room. And if so, the general nature of their relationship with you, there is no other person in the room here.

Oh, I'm assuming.

Okay. Uh, let's do roll call then please.

Commissioner quick. Commissioner Choi?

Present.

Commissioner Wong?

Present.

Vice Chair Davis? Here. Chair Chan?

Here.

All planning commissioners are present with Commissioner Wong attending virtually.

All right, please join me in reciting the Pledge of Allegiance. right agenda review uh first up is the nomination and election for the planning commission chair and vice chair uh then uh meeting minutes public communication one public hearing item any uh discussion or changes to the agenda Okay, moving on then, we'll consider the nomination and election of the Planning Commission chair and vice chair for fiscal year 2026. Are there any nominations for chair? Yes, Commissioner Quigg.

I nominate Maureen Davis as the next chair of the Planning Commission.

there is there a second second oh sorry actually can I clarify with you Commissioner Quigg would you like chair Davis to assume the chair position immediately or at the next meeting it's my decision you might as well do it tonight I thought that it was always in July is it yeah

This is the first meeting since the typical rotation. So the commission could either have the rotation of the chair effective for this meeting or the next meeting. And if it's for this meeting, you just need to include it in the motion.

I suggest that we move forward and complete it tonight after we vote.

OK. Commissioner Choi, as the seconder, do you accept the change?

Yes. That's fine. I second.

All right. Moved and seconded. Any further discussion? All right. Can we do the vote, please?

Did you want to do it on the board or did you want to do it on?

Don't we have to do a roll call since Commissioner Wong is remote?

OK. Yes. OK. Commissioner Quigg? Yes. Commissioner Choi?

Aye.

Commissioner Wong?

Yes.

Vice Chair Davis? With gratitude, yes. Chair Chan?

Yes.

Motion passes 5-0, with the chair being immediately switched. Well, okay.

I meant tonight, but... Okay, that's fine. So, even before we do vice, yes, it's already then that's what I thought I said, even if we do it tonight, I would do it.

I think commissioner Chan for excellent service during the last year as chair.

no i've got to tell you i didn't expect it quite so quickly and um i want to say thank you too also to you there wasn't um a lot of meetings this year the ones that we did have you did a great job thanks nathan thank you i didn't know we would do it this fast either so i get your notes now okay to uh

uh rotate the vice chair yeah that's what we're doing next yes i thought i might be doing this later we would be doing it later um are there any nominations for a vice chair i would nominate uh commissioner choi to be the next vice chair i will second that microphone oh okay yeah oh just

Okay, I will second that.

Excellent. Seconded by Commissioner Quigg? Yes.

All right, can we vote? Commissioner Quigg? Aye. Commissioner Choi?

With gratitude, thank you, yes.

Commissioner Wong?

Yes.

Vice Chair Davis or Chair Davis? Yes. Commissioner Chan?

Yes.

MOTION PASSES 5-0. Everybody settled?

OK, cool. All righty, moving on then. Next up, we have a set of minutes to approve from the Wayback Machine. Where'd they go? Here they are, from May 19. Anybody have any corrections or want to make a motion?

I move we approve the May 19 minutes.

Second I'll second.

Thank you. Can we vote? That's from Commissioner quick. Yes I'm mention our wall.

That's the same.

So it's not there Chair Davis, yes vice-church, okay Yes, Commissioner Chan. Yes motion passes for zero one with Commissioner Wong. I'm standing

All righty. Moving up is public communication. This is the time set aside for anyone from the public that would like to address the Planning Commission on any topic in our purview that is not on tonight's agenda. Does anybody, we have one person in our audience, anybody in the audience or on Zoom who has anything to say?

There are no speaker slips or hands raised on Zoom.

All righty, then we'll move on. TO OUR PUBLIC HEARING, WHICH IS A DENSITY BONUS ORDINANCE AMENDMENT, AND WE ARE TO REVIEW AND RECOMMEND TO THE CITY COUNCIL AN AMENDMENT TO THE CITY'S DENSITY BONUS ORDINANCE TO ALLOW LOCAL DENSITY BONUS INCENTIVES IN ADDITION TO THE INCENTIVES PROVIDED BY THE STATE DENSITY BONUS LAW. AND WE HAVE SOME SPEAKERS THAT ARE GOING TO GIVE US A PRESENTATION.

YES THANK YOU CHAIR BRASCO MANA PLANNING MANAGER FOR THE CITY OF MELBRE THIS ITEM IS ORIGINATED FROM THE CITY COUNCIL'S TWENTY THREE TWENTY FOUR STRATEGIC INITIATIVE TO DEFINE THE COMMUNITY OF TOMORROW AND WITH THE GOAL OF PRIORITIZING VERY LOW INCOME HOUSING AND DEVELOPING A DOWNTOWN LOCAL DENSITY BONUS PROGRAM THAT EXCEEDS STATE LAW THE CITY HELD A STUDY SESSION WITH THE CITY COUNCIL ON JANUARY 28TH, EARLIER THIS YEAR, AND FOLLOWING THAT, THE CITY CONDUCTED OUTREACH WITH LOCAL PROPERTY OWNERS AND THE COMMUNITY ON THE PROPOSED ORDINANCE, AND THE ORDINANCE AMENDMENTS BEFORE YOU TODAY IS AN ACCUMULATION OF ALL THE EFFORTS. I ALSO WANTED TO POINT OUT THE CITY DID RECEIVE ADDITIONAL CORRESPONDENTS ON THIS AT ABOUT 4 30 TODAY I'LL ADDRESS THAT AFTER WE HEAR THE PRESENTATION FROM HARRISON ASSOCIATES SO WITH THAT I WILL TURN IT OVER TO HARRISON ASSOCIATES WE ARE JOINED TODAY VIRTUALLY BY HITA MOSESMAN AND AZER MARIN WHO WILL BE PRESENTING THE CITY'S local density ordinance amendments and i do also want to mention that um christian from the city attorney's office is here as well should there any questions arise for him thank you yes good evening good evening everybody i just want to make sure that you all can see the initial slide that we have here yes

Great, thank you. All right, so again, good evening, everybody. My name is Xavier Marin. I'm a project manager of the consulting firm Harris & Associates. As Roscoe mentioned, joining me for this item is Hida Mosesman, the head of our firm's community development and housing department. The city engaged our firm to complete an analysis regarding a local density bonus incentive that the city can provide to supplement density bonus provided by state law. And to start, we want to give an overview of what density bonus is. And generally, there are three important things to consider when it comes to density bonus. First, density bonus is an incentive that allows developers to build more market grade units on a housing project in exchange for making a portion of all those units affordable or income restricted. We can think about this by breaking down the components of density and bonus. Density means more units allowed on site, even more than what the city might regularly allow. And bonus comes in the form of being able to build more market rate units in exchange for including some affordable income restricted units. And the bonus is calculated based off the number of total units proposed for the project before the bonus is applied. And I note that this incentive is a requirement from the state and applies to all California cities. The second important thing to know is that all additional units that can be built through the density bonus are market rate. For example, for simple math, say a project meets the incentive requirements and a developer can build an additional 10 units. All of those 10 units can be built as market rate and there is no requirement to make any of them affordable or income restricted. The third important thing to know is the benefit of this incentive is that the revenue on the additional market rate units can help offset the cost of affordable units, which generate significantly less revenues. And the idea is to help make the economics of housing projects work by letting developers balance the cost of affordable units with the higher revenues that can be derived from additional market rate units. And ultimately, the goal is to incentivize overall housing development. Next, we want to give a quick overview of inclusionary and affordable housing as it relates to the city. Starting with apologies, starting with basics. Inclusionary housing and affordable housing are effectively the same thing in the context of our discussion today. They refer to units that are income-restricted or levels determined by the state. cities can create requirements for the inclusion of affordable housing in housing projects. And that's what's called the inclusionary housing requirement. The way we see that play out is that housing projects must make a certain percentage of units affordable. The city of Millbury requires this for all projects, except those with 10 or less units. Those projects are able to pay a fee to the city if a developer does not wish to include any affordable units in the project. And naturally, I think the next question is, what are the city's portable housing requirements? And that depends on the type of project. Starting with ownership projects or projects where all units will be made available for sale to consumers. Here the requirement is that 15% of units be affordable to households with moderate incomes. Again, the city's requirement for for sale projects is that 15% of units be affordable at the moderate income level. Considering rental projects where units will all be made for rent instead of for sale, Here, the city requires that 10% of units be affordable to very low-income households and 5% to low-income households. These affordable units could only produce below-market rents up to certain levels that are determined by the state. And again, the city's requirement for rental housing projects is that 15% of units be affordable with 10% at the very low-income level and 5% at the low-income level. Taking a step back, we're discussing the city's affordable housing requirements because they tie directly to the structure of the proposed city density bonus. The proposed city density bonus is structured to make meeting the city's affordable housing requirements more appealing to developers, and this in turn helps the city ensure that necessary affordable housing units are constructed. The city's current density bonus ordinance defers the state law by describing a developer's process to obtain a density bonus in a manner compliant with state law. The city is proposing a local density bonus, which supplements bonuses provided through state law. And in this table, we have a summary of the structure of the proposed city provided density bonus. Similar to affordable housing requirements, the incentive differs for rental projects versus ownership projects. And of note, these incentives apply solely to projects that already qualify for density bonus through state law. That criteria in particular was chosen to ensure the incentive is focused on projects that provide affordable housing to the city's housing inventory. For rental projects, if a project allocates 5% of units as to low-income households, the City will provide a flat density bonus of 50%. This bonus would be in addition to anything the State provides in this income category and is aligned with the City's rental affordable housing requirements of 5% of units allocated to low-income households. Additionally, for rental projects, if a project allocates 5% of units as moderate income, the city would provide a density bonus equal to half of that provided through state law in that income category specifically. For rental projects, the city does not have a requirement as it relates to moderate income units. So this incentive is meant to help incentivize the production of this housing type. For ownership projects, if a project allocates 15% of units to moderate income households, the city would provide a density bonus equal to that provided through state law, which effectively doubles the bonus. And this incentive is aligned with the city's ownership project affordable housing requirements of 15% of units allocated to moderate income households. Acknowledging that this overview is very conceptual in nature, in a minute we'll walk through what these incentives look like when applied to example projects to help illustrate their effect. This local density bonus would apply solely to projects located within the Millbrae Station area boundary or the downtown and El Camino Real boundary. Set differently, this incentive would not apply citywide. And to the left here, we have a map outlining the boundaries of each area, which is included as an appendix in the density bonus ordinance and the memo that's included in your agenda packet. The city focuses incentive on these areas to facilitate consolidation, development and redevelopment in these areas. On April 16th of this year, the city held a local property owner and stakeholder virtual outreach meeting. That meeting was attended by 14 people, though the invite was sent to a larger group and made available for access by the larger public. The call included local property owners, residents, and members of the Housing Endowment and Regional Trust of San Mateo County, also known as HEARTS. During this meeting, attendees were provided a presentation overviewing the city's inclusionary housing requirements, existing state density bonus law, and the proposed city density bonus that we're discussing today. On the right, we have a summary of feedback that was shared during the outreach session. In summary, several attendees noted that local density bonuses can help incentivize new development, particularly in cities like Millbrae, which have small lots and limited available land. And attendees also provided feedback regarding the potential impact of higher density developments in the city's downtown region. On the following slides, we'll provide examples that illustrate the city's proposed incentive through two example housing projects. For the first example, we're using a 10-unit 4-cell project. And for the second example, we're using a 100-unit rental project. Full disclosure, these are round, pretty simplistic numbers that we're using to show what the city's incentive would look like, acknowledging that each property is unique and the number and type of units that make sense to build can vary significantly from site to site. And the reason we're using those round numbers is, again, just to help simplify and illustrate how these city incentives could work in practice. First, we'll start with an example or for sale project. And a reminder that for ownership projects, the city requires that 15% of units be affordable at the moderate income level. By meeting that requirement, the project gets an incentive to the state. And what is being proposed through this local density bonus is to add to that incentive to in effect reward the project for meeting the city's affordable housing requirement. Now bring your attention to this table. So here we show an example 10 unit project that adheres to the city's affordable housing requirement by allocating 15% of units as moderate income. And that 1.5 is rounded up to two for purposes of this calculation. And the remainder of the units are market rate, so not income restricted. Through state density bonus law, this project is able to build one additional market rate unit through the allocation of moderate income units. So one additional market rate unit is able to be built and the number of affordable units is kept the same. Through the city's proposed local density bonus, this would double the incentive that is offered to the state. so in addition to the one additional market rate unit that can be built the city's local density bonus would allow one more market rate unit to be built and here we have a summary of what that looks like putting that all together where through the state incentive and the city incentive the project is able to increase the number of market rate units from eight uh up to ten Again, while keeping the number of affordable housing units the same. And recap here just to help bring this all together. The allocation of moderate income units at the 50% level allows this project to build one additional market rate unit through state law and one additional market rate unit through the city local density bonus incentive. And next, we'll take a look at an example project. Admittedly, this is a bit more complicated because there are more comments to it. A reminder that for rental projects, the city requires that 10% of units be affordable at a very low income level and 5% be affordable at the low income level. Here we show a unit mix of an example 100-unit rental project. Here it's assumed that the project will allocate 15% of units as very low, 5% as low, 5% as moderate, and then the remainder being market rate. Note that the 15% very low income allocation is above the city's requirement. But we are presuming 15% for this example, because at this level, projects can access significantly more density bonus through state law compared to if they only allocated 10% of units is very low. The allocation of low income units of 5% is in alignment with the city's requirement. and the allocation of moderate units at 5% is to help illustrate the moderate portion of the local city density bonus incentive. So through state law, specifically through the allocation of very low income units shown in purple and moderate income units, this project is able to build up to an additional 70 market rate units. As with the prior example, the additional market rate units can be built while keeping the number of affordable units within each category the same. Through the city incentive, in addition to what's provided through the state, the allocation of low income units shown in blue and the allocation of moderate income units, this project could build an additional 25 market rate units. So in total, through state law and the city's density bonus incentive, this project can build up to an additional 95 market rate units with 70 of those units deriving from the state law and 25 of those units deriving from the local incentive. And another recap here to help bring this together. The allocation of very low-income units at 15%, shown here in purple, allows the project to build 50 more market rate units through state law. The allocation of low-income units, those blue units at 5%, allows the project to build 15 more market rate units through the city incentive. And finally, the allocation of moderate income units at 5%, shown in orange above, allows the project to build 20 more market rate units through state law and 10 additional market rate units specifically through the city incentive. So big picture, how will the city provided density bonus help facilitate development? The city's incentive allows developers to build more market rate units. The additional revenue from these market rate units helps cover the cost of including affordable housing in a project. Those higher revenues on the additional market rate units can also help offset the costs of things like the block consolidation. Block consolidation is the process of gathering multiple smaller pieces of land in order to build a project on a larger piece of land. And that process can be expensive, time-consuming, and can increase development risk and costs overall significantly. The city's incentive would thus allow developers to generate more profit on their housing projects through building more market rate units. That additional revenue translates to lower risk for developers and makes their projects more resilient to changes and fluctuations in market factors such as interest rates, rents, sales prices, and development costs. With that, we thank you for your time for this presentation and are here to answer any questions regarding the proposed city density funds.

Thank you very much. That was a great summary. Do any commissioners have any clarifying questions at this time?

Yes, hi. Thanks so much for the detailed breakdown, especially the exhaustive description of how the various density bonuses would result in actual units. I have a question about something that was in the attached report that I don't think you talked about, which is the feasibility of the city's current inclusionary ordinance you meant uh if i'm this is on page four of the report um that a feasibility analysis of the city's current inclusionary requirement for rental projects does not facilitate financially feasible housing development. So does that effectively say if we don't change anything right now, there is basically no development interest or potential for any new rental housing construction in Millbrae because of the know the interaction between the inclusionary require current inclusionary requirement and existing market conditions is that the correct way of interpreting that statement okay for that question why if i hand it over to you

Yeah, of course. Hi there. Heta Mosesman from Harrison Associates. You were correct in looking at the inclusionary housing study. We did an update to that study in, well, concurrently with the analysis of density bonus and looking to incentivize underutilized properties in strategic parts of the city. and we did do a financial feasibility analysis on your current requirements. And we did find that what was once financially feasible five or six years ago when the inclusionary requirements were established is not feasible for various factors that we'd be happy to discuss having to do with their market factors. And so what I would say is that the recommendation was to take a look at modifying those requirements. But the density bonus proposal before you this evening does make your inclusionary requirement more financially feasible because it allows for, as Zahir had mentioned, more market rate units through density bonus. We analyzed your inclusionary housing under current conditions and didn't include any extra incentives in that analysis. So I would say that it is, as it sits today, if this density bonus incentive were to be provided, it would enhance feasibility on your inclusionary requirements and basically incentivize developers to meet your inclusionary requirements. But I do think you should take a look at the financial feasibility of your current requirements as they sit for rental and ownership housing.

AND I WOULD SAY THAT IN ADDITION TO THAT, THE CITY DID COMMISSION HARRIS AND ASSOCIATES TO EXAMINE THE FEASIBILITY OF INCREASING THE CITY'S INCLUSIONARY ZONING FROM 15% TO 20%. THERE WAS A REQUEST FROM THE COUNCIL AT THE TIME TO DO THAT. AND TO FULFILL THAT REQUEST, WE DID DO A STUDY AND FOUND THAT NOT TO BE FEASIBLE. now um we you know i i the the item before you tonight is the incentives at the local density bonus incentives that um that were were that we created in order to spur development um so i just want to make sure that we're not talking about the inclusionary um aspect of the existing ordinance because that that particular item was a policy item that We had presented to the city council at the study session and we had heard that there was at least just to keep the existing 15% as it is. And then maybe at some point later, maybe look at that recommendation. But as you know, feasibility is point in time and conditions change throughout time as well.

Thank you. Does that answer your question? Cool. Any other questions?

I thank you for the report. Are you aware of any nearby jurisdiction or cities who implemented something similar with success?

Yes, I can answer this question as well. There have been several jurisdictions that have incentivized density bonuses and with different types of policies, basically incentivizing what they'd like to see built. So that would probably be specific to these individual jurisdictions. For example, in the city of San Diego, they have incentivized and provided large additional density bonuses for projects that contain micro units or units that have maximum sizes of, you know, about 500 to 600 square feet. For example, so we are seeing that this extra density bonus being used to incentivize certain types of housing products in terms of affordable by design or to implement specific policies. The housing element, as you're all aware, the housing elements, every city and county in the state has to adopt one and Millbrae successfully had their certified a couple of years ago. A lot of jurisdictions put in their housing elements as a program or action that they would take to examine additional density bonuses. What we've noticed working with different jurisdictions around the state is that these things are just starting to happen. at the current time so there aren't a lot of examples it's not as widespread at the present time but there are a number of jurisdictions that are considering similar types of extra incentives going above and beyond what the state provides in density bonus thank you commissioner wong you have a question

Yes, just like to start with the technical question and the report just going back to the commercial ownership example. One page. 8 of 9 of the 3rd. Documents was given to us. You can go back to that slide on the base unit 10. Units of an ownership project.

Yeah, absolutely.

So, for this, just trying to make sure it's tight to the math's right before we pass it on. If we take a vote on it for the moderate number of units marked. moderate income that has 15% and then two. So clarification, if there's two units of a 10 unit project or moderate income, wouldn't that be 20%? Because if it's 20%, then that would bump up the state bonus. to like two, if I'm understanding your memo correctly. 20% of moderate percent units would have a density bonus of 15% density bonus, and then assume that we round up to two extra market rate units. because the moderate 15%, it doesn't really make sense to call it 15% if there's two out of 10 units or moderate income, then it'd be 20%.

Yeah, I understand your question, very fair question. What we try to do is tie it to the city's current inclusionary requirements, looking to especially incentivize that. So that's why you're seeing the 15% example used there. We assumed that we would round up to two for the purposes of this hypothetical analysis, because even though you do have, I believe, a fractional unit, clause in your inclusionary requirement. This was not intended to be as granular as your actual inclusionary with all of that, because this tends to be a little bit complicated on how to calculate it. And so we were trying for nice even numbers. trying to stick with your inclusionary requirement as opposed to tying it too much to the state density bonus. But you're correct. The state would require would allow for additional density bonus at a 20% number. This was our way of trying to simplify the explanation, if that makes sense. and not intended to be as precise, but do you understand that you're absolutely correct?

I suggest adding a note or comment on that so that it doesn't create further confusion. Beyond that, there's one other technical one on your map of the zone for the ECR El Camino Real and the right there. This map right here that's slightly different from our zoning map that's online. There's just a couple of spots on Hemlock just north of the blue area where the blue intersects the orange. and then also on the orange to the very far end of the north of the map there's I just double check to make sure that this map is consistent with our Sony map because it appears like it may be omitting a couple ECR locations there so be good just to double check on that in case never it arises that there's a project and then it falls or there's some discrepancy in the map and create some confusion yeah absolutely and i'll just address that uh the this map was drawn through a shapefile that uh

the city's planning department sent over to us and it's parcel based so I think a distinction might be the fact that this map is kind of parcel based versus the zoning map you might be looking at it can essentially like close the gaps in between the different parcels but point noted and we'll make sure to verify that okay that's it for the technical questions I had

um i don't know if you want to go into more philosophical philosophical questions at this point no not right now thank you any other questions no let's go you were going to address the correspondence

Yes, thank you. So as I mentioned earlier, we did receive additional correspondence from the California Housing Defense Fund. One is a letter regarding our proposed density bonus ordinance, and then the other piece of correspondence is just referencing a letter that was sent from HCD to the city of Antioch. The letter that the California Housing Defense Fund sent to us, it was sent to us late today, WE DID TAKE A LOOK AT IT AND WHAT THEY ARE POINTING OUT ARE SOME FLAWS IN THE EXISTING ORDINANCE THAT WAS PASSED PREVIOUSLY. THERE WAS NOTHING IN THERE THAT HAS POINTED TO ANY ERRORS WITH REGARDS TO ANY POLICY ITEMS THAT WE'RE CURRENTLY PROPOSING. SO BECAUSE WE HAVE AN EXISTING DENSITY BONUS ORDINANCE AND WE'RE UPDATING THAT ORDINANCE, THERE HAVE BEEN SOME STATE LAWS THAT HAVE PASSED SINCE WE ADOPTED IT THAT WE WOULD NEED TO JUST KIND OF INCORPORATE INTO AN UPDATED ORDINANCE. AND YOU KNOW SO WITH THAT I THINK THAT WE COULD OPEN UP THE PUBLIC HEARING OR THE PUBLIC COMMENT FOR THIS HAVE DISCUSSION AND DISCUSS THE POLICY CONSIDERATIONS BEFORE YOU TONIGHT AND THEN THE CITY ALONG WITH THE CITY ATTORNEY'S OFFICE CAN REVIEW THE FINER POINTS IN THE LETTER AND MAKE ANY ADJUSTMENTS NECESSARY AND BRING THIS BACK TO A DATE CERN IN THE FUTURE SO WE WOULDN'T NECESSARILY BE VOTING TONIGHT THEN i think we would it would prove us to have a little bit more time just to analyze the points in the letter um again this is nothing to do with what the city is proposing from a policy perspective just cleaning up some of the existing points in the ordinance so our discussion should solely focus on a density program and not address anything that's in there we're not gonna that's not what our job is tonight right given that uh we still need a little bit more time. I think that when we take this, bring this back to the Planning Commission, we could discuss the additional amendments that are made to address the letter.

If any other changes are made.

Exactly. And again, this is going to be done consistent with state law, and that is our intent. But in terms of the item before you tonight, we can still discuss the changes we're proposing to make and open up for public comment and then just continue to a day certain.

Thank you very much. OK, so you just mentioned public comment as we can. We open that up. Are we good? Do we have to vote? Remind me, I've done this for a while. We just open it and close it. Nothing else. Yes. So are there any members of the public that want to speak on this item here or on Zoom? speaker slips no speaker slips or hands raised on zoom okay and and we'll close the public comment would you have to vote on that or no okay so you have to vote do you need a motion yes okay my motion to close public second thank you that one won it was close and your votes

COMMISSIONER CHAN?

YES.

COMMISSIONER QUIG?

YES.

COMMISSIONER WONG?

YES.

VICE CHAIR CHOI? YES. CHAIR DAVIS? YES. MOTION PASSES 5-0. PUBLIC COMMENT IS NOW CLOSED.

ALL RIGHTY. NOW IT'S TIME FOR DISCUSSION AND OTHER DEEPER QUESTIONS. ANYBODY WANT TO TAKE THAT OFF? NATHAN?

could either harrison associates or staff kind of explain what waiver what the difference is between waivers incentives and concessions in terms of meeting the if the density bonus program were to pass and the developer wants to pursue the project of the size that they're entitled to under it like i'm having a hard time parsing what is technically different about each of these three things to achieve that.

I can answer that question, and it is a little bit confusing because all of the things that you mentioned would be considered concessions. I think concessions are probably the key term. The state density bonus law, the thing that makes it attractive to developers, obviously besides being able to build more market rate units, to subsidize the affordable units is that they are entitled to a number of concessions. And the way the law defines it is that basically a concession is anything that would make the project more financially feasible. or save the developer cost. So that could be relaxing of development standards. It could be parking reductions, although the state has mandated that you don't have to require parking within a half mile of major transit. The state has actually passed a number of laws that have given incentives without calling them incentives. They're just mandates that local government cannot require certain things. under you know circumstance certain circumstances and parking would be one of those um other things to your point about waivers waivers might be a reduction in development impact fees or they might be a deferral of developer impact fees although there was a law passed recently that deferred development impact fees to certificate of occupancy under many circumstances um But I would say that concessions are sort of the header that all of the other things that you mentioned go underneath. And again, that would be anything that would enhance the feasibility of a housing project.

Thanks, that really helps. I guess one other thing that was a little bit unclear to me is just how much discretion there is over the nature of those concessions. So if a developer is entitled to a certain number of units under the local density bonus program and they you know they have some choice about whether to ask for more height to ask for a higher far ask for less parking how is that selection determined and does the does the planning commission ultimate and ultimately have the final say over to whether to grant those concessions or not?

So to answer your question, you know, the law does provide some flexibility with these types of concessions. So there are no concessions that are mandated except for the parking reduction that I talked about, because that was a state law that passed. So within a half mile of transit, you have very large transit station. Parking is not required. However, I will say based on our experience, it is very, very difficult for a developer to get a loan or to get financing without some parking. So even though it's waived under California law when it's near frequent transit or transit station with frequent stops, and that could be bus, it could be train, many times they don't take that concession or that sort of mandate because it diminishes the marketability of a rental project, even an ownership project because of consumer preferences. and even a lending institution is aware of that so as it relates to parking i've seen a very very few projects in the state of california that have waived parking completely and there is no even visitor parking i i'm only aware of one project that came close to that and they ended up having to lease space in a parking garage two blocks away because they couldn't rent any of the units So the market is weighing in on that, I would say. And what we see even right next to transit is there's at least one spot per unit. So this is all to say that you do have discretion over which concessions are granted. And I would coin it as more of a negotiation with the developer. You are required to give a certain number of concessions, but the law doesn't mandate what type of concessions they are. So I think that communication with applicants that come in to talk about what concessions make sense, that is still part of something that the Planning Commission, the Council, can talk with applicants about.

Thanks very much.

Just to follow, if I may, on that, that negotiation or that discussion would happen at the staff level, correct, ministerially? necessary was it necessary to bring something like that up to the planning commission or public forum

It would be unless the property, unless the parcel of land or property is subject to buy-right development. But even then, the concessions would have to be laid out as part of the state density bonus allowance. So I would say that you will still be considering the project. Even ministerial approvals need to go through design review. So it is extremely rare. I can't think of one example where the planning commission didn't see a project for at least design review. And there may or may not be a density bonus involved there. Sometimes developers choose not to take them. It really depends on the area, but I would say with with certainty that you would see any project that's being proposed, at least for the design review phase of that and anything that's not by right would require more considerations and approvals than that.

Thank you.

Commissioner Wong.

Yes, if we could go back to the city provided density bonus slide, because I think that's the real part of what we're looking at approving here.

Just to clarify, would this be for the rental or the ownership?

Either one.

Okay.

So my question is, where did... these proposals come from? Is there a basis for this, both the additional city density bonus for the rentals and the ownership? Is there a minimum requirement? Is there a Why is there not added bonuses for very low income or low income for ownership? Can you give a little bit more background about how we arrived at this proposal? And the equal, you know, for me, the ownership with the equal to the state mandated additional density bonus seems pretty high because if we can allow up to 50% density bonus or a project state mandated, and we had another 50%, then we're basically doubling the entire project, allowing them to double the project.

Yeah, so I can't answer that question. So state density bonus law right now, what we see in the market most typically are projects that come in with 15% very low income units because that's the lowest number of units that you can propose to get a 50% density bonus or more. And so very low is commonplace for a lot of projects because you only have to do a few of them. You have an inclusionary housing requirement that also includes low income units for rental and then moderate income units for ownership. So the thinking was to sort of incentivize or reward those projects that are meeting and perhaps exceeding your inclusionary housing requirements. The threshold for density bonuses at low income is very high. It's higher than your 5% requirement. the thinking there would be that instead of having and we see this in communities where because of the way the state density bonus is structured you get you know 15 units gives you a 50 density bonus pretty big and then you can just and most developers a lot of them will stop there so what you have are a lot of very low income units and then you don't have very many low income units You have a lot of very low, but not very many low. And we're seeing that in several communities that have inclusionary housing requirements. And then when you look at your RHNA numbers, your state mandated housing numbers in your housing element, it becomes very challenging to meet those numbers when low income at inclusionary levels does not meet the threshold of the state density bonus. So here I can answer in terms of low income, it's to provide some incentive for meeting your inclusionary, whereas the state doesn't do that. And the same would be true of moderate for rental projects. Moderate would be your missing middle or people that make average income in your area. So that would be the incentive there where the state doesn't incentivize that at that 5% level. And then on ownership, it was to provide additional, the ownership projects are usually smaller than rental projects. And so it was to provide enough of an incentive for a developer to meet this and exceed it and maybe choose Millbrae with the 15% ownership requirement instead of choosing to build somewhere where there wasn't an inclusionary requirement for ownership or another city that allowed an in lieu fee instead of building the units on site. So really, all in all, the way that this is proposed and structured is to reward or incentivize your existing inclusionary requirements.

I know it's kind of a crystal ball, but do you have a revised arena projection that it's going to boost our arena numbers and help us with that?

I wish I could say with certainty, I think interest rates are gonna play a large part in that. Market factors will play a large part in that. I can tell you that based on our market research that's in the studies that we prepared, the COVID impact in San Francisco and the surrounding communities, just like Millbrae, rents flattened out a little bit. And sales prices did flatten for a while, but are on the rise. I'm reading a lot more about recovery in the Bay Area in terms of property values, rents and things like that. So I think it's a combination of that improvement continuing, especially around the San Francisco area, and then market factors like interest rates and tariffs.

So is the driver for this? Is it the arena trying to achieve arena numbers? Or is there a state? There's no state minimum requirement for like added cities have to add an additional density bonus, correct?

You're exactly right. I think we were fortunate enough to help the city with the housing element a couple of years ago. It was certified. HCD was requiring Millbrae, just like every other jurisdiction we work with on housing elements, to come up with a list of actions and programs to incentivize affordable housing. And they were very adamant that there be several of these types of programs. The density bonus incentives that we're talking about this evening were actually an action and program in your housing element. A lot of other communities also included this type of program. as a way to incentivize. I believe HTD acknowledges that the city can lay the foundation and provide incentives for development, but that really will be up to developers to do. I think that this is meant to encourage development in your city and to provide that additional profit buffer on projects where you get more market rate units when you're also doing affordable to lower the risk. So if you're offering an incentive like this and the city next door is not, They may choose to build in Millbrae as opposed to another city, Redwood City, for example. If you're offering more density bonus, then the state would allow. So that's really the intent here. I wish we could say with certainty what the market's going to do, but this is intended to help encourage affordable units as part of projects.

Excuse me, Chair, one last question then. Is there... is there a presence already with another city that's already implemented this are we modeling this after another city program or is there an example of how this has impacted another city with these types of

I wish I could say that there was a long laundry list of cities that have this similar type of situation. What we're seeing out there is that cities are in the process, just like you are this evening, of considering this and looking at it. We have seen some jurisdictions, and I use San Diego, the city of San Diego, who has very progressive housing policies and incentives there. We have seen... We have seen success in San Diego. I can definitely say that with certainty. That is a very urban city and they're allowing very, very high densities there. And redevelopment of entire neighborhoods is occurring to allow for their residential need. But I don't think that we have data that has been tracked on a large enough data sample to be able to tell you what the trend is at this point, because this is a little bit of a new phenomenon. The state had already allowed this. Any jurisdiction in California has to allow for the state mandated density bonus. And it's a fairly new phenomenon to go above and beyond that, to offer additional density beyond that and kind of fill the gap, as I said, on low and moderate income that have higher thresholds for the percentage of units going in. So I think it's going to be maybe some time before we have a large enough data set look at that trend we have run feasibility on this though on financial feasibility and it definitely is an incentive in terms of if you look at profit okay thank you thank you question no all right um you know this feels like it's a step in the right direction we can only set the table

developers have to come in and decide to fill it or not but this is another step forward to us saying please come we welcome you we can increase our housing number which is desperately needed so you say you're suggesting we should just hold off tonight and you're going to bring this back to us another time um yep

yeah i i i think that um what we could do is is continue to date certain um and the date that uh i think would give us enough time um is october 6. um is that okay it seems like a long ways out but you only got you know yeah do what you got to do yeah we have to run it through the city attorney's office absolutely council will be okay with that

Is there a deadline by when we want to or absolutely have to have this?

This is an initiative that's driven by the city, so there is no mandate that we have to get it done. Obviously, this has been on the books for a while, but we do want to make sure that we give enough time to analyze issues and craft the ordinance that addresses all the CONCERNS IN THE LETTER AGAIN THIS IS JUST A CLEANUP ISSUE NOTHING SUBSTANTIVE OBVIOUSLY THE CITY IS CONSISTENT WITH STATE LAW OUR DEVELOPMENTS ARE CONSISTENT WITH STATE LAW WE'VE BEEN APPLYING DENSITY BONUS CONSISTENT STATE LAW WHERE THERE ARE WHERE THERE ARE DIFFERENCES WE DO DEFER TO STATE LAW SO THIS IS MORE OF A CLEANUP THAN ANYTHING BUT YOU KNOW JUST TO ENSURE SO THAT WE DON'T CONTINUE TO CONTINUE TO A MEETING AND THEN HAVING TO CONTINUE IT AGAIN because this is going to be continued to a date certain just to err on the side of caution provide a little bit more time I recommend the first meeting on October which would be the sixth if that's um that's okay with the commission sounds great do we have to do anything or we're just no and just table for now if that's amenable to the commission then we would need a motion to continue this item to October 6. And it didn't sound like there were any policy issues that warranted any additional revisions. The only potential amendments, in addition to what's being proposed, are the ones that would be to the existing ordinance that would be cleaning up and making it consistent with state law.

We have a motion to move this to just say October 6th?

That's correct.

I'll motion it. I move to extend this item to the agenda of October 6th.

So motion by Commissioner Choi and then second by Commissioner.

Okay. Commissioner Chan?

Yes.

Commissioner Quigg? Commissioner Wong?

Yes.

Vice Chair Choi? Yes. Chair Davis? Yes. Motion passes 5-0 to move a continuance to October 6. All righty.

Thank you. New business? We don't have any staff updates?

We will have the next Planning Commission meeting IS AUGUST 18TH, WE'LL HAVE ONE ITEM ON THAT AGENDA, SECOND STORY EDITION, SINGLE FAMILY HOME. SO WE WILL BE MOVING FORWARD WITH THAT PLANNING COMMISSION MEETING. AND JUST WANTED TO ANNOUNCE THAT WE HAVE PROMOTED JENNIFER LIM AS ASSISTANT PLANNER. SHE'S BEEN PROMOTED TO ASSOCIATE PLANNER. OUR SENIOR PLANNER, NESTOR GUERRERO, has moved on to the state of Washington. So he's,

HE ACTUALLY PREFERS THE COLD.

HE TOLD ME HE LIKES LIVING IN THE CITY BECAUSE OF THE COLD. HE USED TO LIVE IN WENT TO SCHOOL IN PENNSYLVANIA, PENN STATE AND THEN OREGON. SO HE VERY MUCH PREFERS THE COLD. BUT FOR PERSONAL REASONS AND WE'LL MISS HIM DEARLY, BUT WE HAVE HIRED CONSULTANTS FROM Urban Planning Partners and CSG that will be helping us out in the interim. You'll be meeting them next meeting, and then probably the meeting after that, because we do have a couple of projects that they're working on. So Brian Albini is working through CSG, and the Meet Cohen is coming to us through Urban Planning Partners. I will be going out for recruitment for those positions. We still have two staff vacancies and we'll fill that hopefully soon here.

Thank you.

Thank you very much. That's all I have for tonight.

Any announcements?

Go ahead. We have received our applications, nominations for the Mount Bray Volunteer of the Year Awards. And it's going to go to the judges tomorrow. And we should have word on who the recipients are going to be of these nominations probably in a couple of weeks. And mark your calendars for the event for October the 17th at Green Hills.

Anybody else? just going to remind everybody who might be watching about all the festive things that are coming um besides that event later in october um national night out is tomorrow night in central park at 5 30. come meet our law enforcement officers and associated folks and have some fun in the park beats and brews is thursday august 21st on broadway we've got our local justin and jeremy garcia as well as Very famous Pride and Joy entertaining us for that evening. We have Movies in the Park.

Is this already passed?

No, it's Friday. Kung Fu Panda 4. Movie starts around dark, maybe 815. Mills Estate Park Reactivation Workshop. There'll be an in-person one at the park on Saturday at 11 o'clock, and there'll be another one in September at the Rec Center. Turn up and find out what the plans are and see if you want to help contribute to those. And lastly, the Art and Wine Festival Labor Day weekend, Saturday and Sunday. Be there or be square.

That's it. Thanks, Maureen. You're welcome. I can't believe I missed that one.

That was a nice article.

That was a nice article in the paper for the garden, the Japanese cherry blossom grove. So it was a nice article. And I see the new, who's doing Justine's job now?

So the city. promoted her environmental services coordinator, Annabelle Acosta. She's the new public information officer.

Is that it?

That's it. Richard?

you

Thank you.