Planning Commission - Regular Meeting

You're all ready to go? Yeah. Okay. Alright. We got about a minute. We'll we'll give it a minute. Alright. And you're ready to throw out the hard things. Right? Alright.

Good evening, everyone. We will start our city of Rockland Planning Commission meeting. It is 06:00 on Tuesday, 03/03/2026. We'll start with the pledge of allegiance. Commissioner Barron, will you lead us in that? I will. I pledge allegiance to the flag of The United States Of America and to the republic for which it stands, one nation under god, indivisible, with liberty and justice for all. Thank you. And can we have a roll call, please?

Commissioner Armstrong?

Here. Commissioner Barron? Here. Commissioner Cortez?

Here. Chairman Thomas?

Here.

And Vice Chair McKenzie is excused.

Okay. Thank you. We will open it up for public comment, if there is any. Is there any public comment? Not for non agenda items. Okay. Doesn't look like there is, so we'll close that and bring that back up here. And we will I'll ask for a motion to approve the minutes.

I move we approve item 1A as written.

Second.

All in favor? Aye. Any opposed? Okay. Looks like it carries. And now we have any citizens is that the same thing, the citizens addressing the non commission on non agenda items, which I think we've established there aren't any. Okay. All right. We will have we'll open up back up to bring it back up here, and then we'll have go back to the what are we starting out with? With the public hearing 2A, the advisory dwelling units and junior accessory dwelling units zoning ordinance amendments.

And I will let staff give their report, please.

Good evening, chair and commissioners. My name is Bennett Smithart with the planning division. I'll be presenting today on the accessory dwelling units and junior accessory dwelling units zoning ordinance amendments. Over the past decade, the state of California has significantly changed the ADU and JDU law to streamline the development of ADUs. Beginning in 2017, the legislature established uniform development standards and substantially limited local discretionary view.

ADUs that meet objective criteria must now be approved ministerially. These reforms are intended to increase the overall housing supply. Prior to the major state reforms in 2016 and 2017, the City Of Rockland regulated secondary units under its secondary residential unit ordinance. The city updated its ADU and JADU regulations in state. The is to ensure municipal code remains aligned with current state requirements.

This slide summarizes the state legislative changes adopted since the city's last ADU ordinance update. These are provided for reference. I won't review each of the bills individually, but staff is available if you have any questions. The proposed amendments fall into four primary categories. I will highlight an example from each. So, processing and administrative procedures. Two, changing to development standards. Three, objective design standards. And four, ownership parking and fee regulations. So the first one, processing and administrative procedures.

Recent state amendments clarified statutory timelines for building permit review, including requirements for written notices of incomplete completeness and establishment of a ministerial appeal process. The proposed ordinance incorporates these updates and includes additional administrative revisions to improve clarity and consistency. In this example, changes include clarifying the thirty day review period, requiring staff to provide written explanation of incompleteness within fifteen business days, and establishing a thirty day review timeline for the pre approved ADU plans. Next, changes to development standards. Amendments to state law further defined maximum development standards a local agency may impose on ADUs.

These limitations apply to objective standards such as height, light, lot coverage and minimum unit size. The proposed ordinance revisions align with the city's development standards with these statutory parameters. In this example, the changes include revising our standard six foot height to allow for an 18.5 height for parcels within onetwo mile of transit and 25 feet or the height of the primary dwelling, whichever is greater. Next are the objective design standards. Recent state legislation prohibits discretionary review of ADUs and requires the review to be objective and ministerial.

Staff conducted a comprehensive review of the existing ordinance language to ensure that the development of the design standards are clearly measurable, objective in nature, and capable of ministerial enforcement. In this case, the language was revised from subjective language. So this one, it went from architecturally compatible in our old ordinance. We wanted the ADUs to be architecturally compatible with the existing primary residence. And that is subjective in nature.

So we made, keeping the same intent, modified the language to be objective but still meet the same requirements. So roof pitch, roof material, exterior cladding, the same. So just being more prescriptive in these examples. Next is ownership parking and fee regulations. Recent amendments to state law modified owner occupancy requirements applicable to ADUs and JADUs.

Specifically, ADUs may not be subject to owner occupant deed restrictions. Additionally, JADUs that include separate sanitation facilities are no longer required to be owner occupied. The proposed ordinance revisions incorporate these statutory changes to ensure consistency with other state requirements. Then we did have a few other minor updates. First, the ordinance clarifies that fire sprinkler requirements consistent with state law by specifying that ADU or JDU is not required to install fire sprinklers as sprinklers were not required in the primary residence.

Next, amnesty for unpermitted units. The amendments establish a pathway for the legalization of previously unpermitted ADUs constructed prior to 2020. Under this provision, eligible units may be brought into compliance if they meet health and safety standard. And lastly, the ADUs for multifamily density. The ordinance standardizes detached ADU allowances on multifamily properties in accordance with state law.

In most cases, the permits up to eight detached ADUs subject to existing unit count and limitations. One thing I did mention in the staff report, so I just wanted to mention it here. HCD has published an ADU handbook that summarizes some of the new laws and gives guidance to staff. So, just one of our references for this. I have that available if you have any questions.

So I want to give you a snapshot of ADUs in Rockland. So this is for calendar year 2025. We had 27 ADUs approved. Five of those were detached and 22 of those were attached with the average size around 400 to 800 square feet. On the bottom left, this is an example of a detached unit that was constructed.

It looks very nice. And one of the attached units that are provided for some the home builders are providing options for folks purchasing homes is to have an attached ADU unit. So this is one of them in the Windy Ranch area that was constructed. Another thing I wanted to mention, we do have permit ready ADU plans. So these plans are free for the public to use.

They still have to get a building permit and pay for the building permit, but the plans themselves are available for them to use. They will have to do site work just as a part of the building, but the structure itself is already preapproved and there will be no additional review if they use it as is. For environmental review, we did file a notice of exemption under fifteen sixty one(two) and fifteen sixty one(three). The activity now results in a direct or reasonable foreseeable indirect physical change in the environment. And the proposal does not have the potential to cause significant effect on the environment.

Therefore, the activity is not subject to CEQA. Therefore, staff recommends the planning commission recommend approval of the ordinance to amend RMC seventeen sixty seven ADU and JADU to the city council. I'm available for any questions. Any questions?

Commissioner Ottroffer? How

many do we did 27 last year. Is there a projection on how many we might do this year? Do we have permits in play right now or applications in play? Do we have any sort of estimation on what we might build this year in 'eighteen?

I do not have an estimate on me, but it's pretty regular to get these. So I'm assuming the wheels would turn in the same pace as they have been. But I have no specifics.

And this is primarily just to get our policies and everything consistent with the state's changes?

Correct, yes.

All right,

that's all I have.

Commissioner Cortez? No. Okay. Thank you. If there are no more questions, any public comment on this?

Oh, I get it. As an example, the three largest projects in the Dry Creek West Placer community outside of Placer Vineyards involved a total of roughly 1,300 units, and they all met their affordable requirements over the Placer County's inclusionary ordinance with ADUs. By design, they are determined that they meet low income requirements for either ADUs or junior ADUs. So those projects are producing 138 ADUs. They all satisfy go toward the county's low income requirement.

They all have, if there's any of those that are deed restricted for very low, then those are so deed restricted and two of those projects have a single unit with a very low income ADU, but for the all the others are deemed low income by design if they're below the seven fifty square foot level, which they are required by their conditions of approval, and those are all going toward the county's RINA requirements. As you look forward to the next agenda item and as that discussion takes place, flexibility allowing builders to meet it, whether it's building affordable on-site, in lieu fees, or ADUs. The objective here is to try to satisfy the state's requirements for low and very low income, and ADUs are a great way to do it. They create value for the homeowner, and they are deemed by HCD to be satisfaction of jurisdiction's low income requirement. Thank you, Mr.

Chairman. Any questions for the one? No? Okay. Okay, thank you. All right. Anyone else for public comment on this? No? We'll close public hearing. And let's start to my left. Any discussion?

No discussion. Okay.

Again, just to kind of touch on the administrative, I'm comfortable with the CEQA exemption, and I am comfortable with the changes. I do think it does make sense in terms of hitting our RANA numbers, so this another way to help us do that. And so I'm in support of this and have no further comments or questions.

Mr. Cortez? Yeah. I concur. The one thing that I did miss and probably I was not paying attention by the time I was reading, there is a restriction in terms of sale of the junior ADU. It cannot be sale separate. What about the detached ADU? Because I know I heard that there's a motion there's something going on in which legislature that is going to allow explaining the property and selling ADUs. I don't know if that happened. It has happened yet or it's about to happen. Do you

So I I can elaborate. So so j a d u's by design are not separately sellable. Same question. I'm not aware of any direction from the city council that we want to opt into that.

Oh, so that has cleared the state? I believe

it was a couple years ago. I believe one or two cities in the state have taken advantage of that, but the rest of them have

not. Okay. Alright. Okay. Great. Thanks. And

I'll concur. This is pretty simple. Right? Straightforward. So do we have a motion?

I move we approve item 2A, accessory dwelling units and junior accessory sorry about that and junior accessory dwelling units zoning ordinance amendments zoning ordinance amendments ZOA two zero two six dash zero zero zero one. And environmental ENV two thousand twenty six dash zero zero zero three.

Second. All in favor? Aye. Any opposed? Okay. Passes. Thank you. Okay. And now on to item three, inclusionary housing public no, sorry, inclusionary housing program and commercial linkage fee analysis. And we will be pleased to hear from staff, etcetera, at all.

Good evening, commissioners. Elizabeth Zorg, assistant to the city manager, here tonight to present the city's draft affordable housing inclusionary program and commercial linkage fee analysis report. Every eight years, the city is required to reevaluate housing goals and policies for existing and future residents. This evaluation takes the form of the city's housing element, which is included in the city's general plan. The city's current twenty twenty one to twenty twenty nine housing element includes programs and goals to meet housing needs, including the city's current regional housing needs allocation, or ARENA requirements, as you know them.

As some of you may recall, during the adoption of the housing element, Program 19 of the housing element states that staff will explore the feasibility of an affordable housing impact fee and a commercial linkage fee. An affordable housing impact fee and commercial linkage fee are components of a broader inclusionary housing policy. These policies take many forms throughout jurisdictions, but they always include requirements that mandate developers to include affordable housing units as part of their projects. They may also include fees that developers can pay in lieu of constructing housing, or in lieu fees, as you may know them. It's important to note that it is not possible to have an in lieu fee without also having an inclusionary housing policy that requires the construction of the housing units.

After the Joint Planning Commission and City Council Housing Workshop in March 2024, City Council directed staff to explore an inclusionary housing policy and in lieu fee. Kaiser Marsh and Associates has been hired to complete the assessment on behalf of this city. As part of this assessment, staff and the consultants solicited feedback from the development community in two public meetings, emails, and phone calls over the past year. Kaiser Marchten also collected data about current development from market data, city staff, and other agencies like PCWA and SP MUD. The report presented tonight is a culmination of the past year of research into residential and nonresidential development in the city.

Based on current market conditions and the city's housing obligations, Kaiser Marston has drafted their inclusionary housing program and commercial linkage fee analysis report and provided recommendations based on

their

findings. Following this presentation, staff and the consultant are requesting feedback from the Planning Commission about the recommendations. And following this meeting, Kaiser Marston and staff are anticipating presenting the report to City Council at the March 24 City Council meeting, which that's a tentative schedule. Things may get changed in the future. Staff and Kaiser Marston will then revise the report based on feedback provided from both the Planning Commission and City Council and then return again to Planning Commission and City Council with revisions to the city's existing inclusionary housing ordinance and a resolution that establishes an in lieu fee.

At this point, I would like to turn it over to Kaiser Marston and Associates for their presentation. We do have one person that is still en route at the moment. They got stuck in a little bit of Bay Area traffic. But I have two representatives from Kaiser Marston that are currently online with us. So I would ask, Harriet, are you available to lead the presentation until Debbie gets here?

Hi, this is Harriet. Thank you Harriet. Yeah. Hi. I will go ahead and move through the slides. Are you able to do the preliminary presentation until Debbie arrives? Sure. I didn't realize that she wasn't there. Actually, she just walked in the door. So no problem. Thank you, Harriet. Give us just a moment. Okay.

Into the fire.

I

usually don't make such a dramatic entrance. I apologize. Was just traffic was horrific. Anyway, good evening planning commissioners. I'm Debbie Kern and I'm with the firm of Kaiser, Marston Associates.

And we're a real estate advisory firm and we our client base is primarily public sector clients and we've been in business since 1973. And I'm here to share with you the analyses that we have done for the city regarding setting up an inclusionary program and a commercial linkage fee program to support affordable housing. And I'm joined here by my two colleagues, Harriet Ragosa remotely and Tim Brettz, and I think you've met them because they were going to start without me. And we're here to answer any questions after I give our presentation. Okay, so the purpose of our study was we were retained about a year ago.

It was really triggered by the city's housing element, which identified an affordable housing program and a commercial linkage program as key elements for the city to meet its RINA obligations. And so that triggered our analysis. And so what we the purpose of our study is really to inform the inclusionary housing ordinance and then also to conduct this commercial linkage fee analysis to support potentially the adoption of a fee on non residential development to support the construction of affordable housing. And then if the city decides to go forward with these programs, we would help draft the ordinances. These are the components of our scope.

First, we reviewed your RENA obligations and then we prepared a financial feasibility analysis, really a series of analyses that look at a project's development cost, a residential project development cost, the revenues and the profit margins to see whether or not the new project can afford, how much it can support of affordable housing and still remain financially feasible for the development community. And then we also prepared a residential nexus analysis, which is not required by law to establish an inclusionary program within lieu fees, but that again was one of the directives in the housing element. So we prepared a nexus analysis. We also surveyed other jurisdictions to see what they're charging and what their requirements are for affordable housing because it's important that you're in line with your neighboring jurisdictions. And then we provided some recommendations.

Before I go into the feasibility analysis, I just wanted to touch on the RENA. So this provides a snapshot of your most recent RENA obligations for the period of 2021 through 2029, and then also where you're at with respect to meeting the requirements. And so as you can see here, the city has regional housing needs allocation, that's the RHIN is an acronym for that. That you have a designated requirement for 5,661 units and the largest components are for very low of nineteen eleven units and then the next largest category is actually for above moderate and then it's for low. But when you look at what's been the building permits that have been issued to date between 2018 and 2025 is that you've outstripped the requirement for above moderate, and where you're really short is on very low and low with a deficit of remaining needs of seventeen forty five very low units and nine zero four low units.

So these are the categories, the income categories that staff believes that the city really wants to target in this program is to enable you to address those very low income needs. Okay. Now, I'll start discussing the residential financial feasibility analysis. The first step to do an analysis like this is to identify what types of residential units are being built in the city and then what is likely to occur as you go forward in the near to mid term. And then once you identify these prototypes, then you model the development economics and that's looking at development costs, revenues and profits.

And then you evaluate, once you set that model up and we've, then you start looking at well what are the economics of a full, just a total market rate project with no affordable, and then you look at well what is the capacity to then interject and integrate some affordable requirements, both either looking at on-site construction or paying an in lieu fee, and then what does that do to the economics and what can it support? This is the prototypes that we identified with staff for the city and we have four prototypes of single family for sale with three being single family detached. We start with large units on low density and that's about three units per acre, 3,400 square foot home. The second is a medium density detached of about 2,500 square feet, five units per acre, and then a higher density detached. And this is pretty high density for a detached, a 12 units per acre, 1,800 square feet.

And then we also looked at a townhome product of 1,600 square feet, and then a rental apartment of 25 units to the acre. Now, the city believes that as the amount of vacant land in Rockland is diminishing rapidly, and so as you move forward, we expect that the densities are going to increase in the city because you have less land. And so probably the townhome and the apartments are going to become more prevalent of new construction as you move forward. The first after we identify the prototypes, the next step is to really look at what are the prices and the values of those different prototypes. And this compares what the market rate prices are to the maximum prices that would be affordable at different levels of affordability.

And so, you can see that the low density single family detached, the price that we've estimated based upon the market of looking at projects throughout Rockland is about $1,300,000 That's the market rate price. When you compare that to what a moderate income household could afford for that unit, it would be approximately 5 and $13,000 So the differential between market and moderate income is enormous. It's $787,000 And then if you were to look at then for a low income household, then it would be about the low income could support $234,000 $5,000 price. So you can see that then that is adding like, you know, another $200,000 to the gap to actually support single family detached for moderate and lower. So the gaps are really big, and that's the point of this is when you look at the gaps for on-site, for for sale to address affordable housing, they're very large.

The difference is the deltas become smaller as you get higher density. And so actually apartments, market rate apartments are really affordable to moderate income households and so are townhomes. So in that case, it doesn't really make much sense to have a requirement of moderate on-site because that's what market is. So you would then, to address your affordable needs, you would go lower, you would go deeper of affordability looking at low for those product types or very low. Okay.

Now, the feasibility analysis, this just shows graphically what we look at. So, and this chart here provides a breakdown sort of what the development costs look like, the components of them. So we have land and site work as being one piece. We have construction costs, that's the vertical costs of building a unit. And it's both hard costs and soft costs, architectural and engineering fees, and financing, etcetera.

Then you have city permits and all agencies that are regulatory agencies that issue fees, whether it's water. So, of these fees are provided by other districts and some are city fees. So you have fees and permits. And then in order for a developer to build something, need a profit on top of that. So we've added in a profit.

So the revenues from selling a home basically have to cover all of these costs. And in this example, we had costs that total about $650,000 And so the land and site work were about $175,000 a unit. Direct and indirect are about $325,000 per unit. And then permits and fees are about $70,000 and so are the target profit margin, approximately that amount, too. So that brings it all up to $650,000 and you have to have a price that covers that.

When we evaluated the feasibility of a project, we looked at target profit margins and the target return on cost metric for apartments. And for for sale, we used a target profit at 10% of sales, and that's a target. You have to understand each project is very different. Developers are different. The cost of projects are different. You know, in Rockland we have some sites that are where it's very difficult because of the granite to actually do the site work and those are more expensive. You have different developers. You have large developers that can have economies of scales. Their costs will be lower. You have different projects that have different finishes, so different construction materials.

So we have just done our best to model just prototypical, but you have to understand there's going be variances between projects. But we've assumed a target profit margin of 10% of sales. I think some developers would certainly like to have a 12%, but we think that the 10% is reasonable for this kind of an exercise. And then for rental units, we have a target return of 6.25% of cost. And then, so a project we have developed three buckets to put projects in.

One is feasible, one is marginally feasible, and then the third bucket is challenge. And so, we designate feasible projects are ones that generate a profit margin that's within 3% of that target. So, it's really a return of sales price of about 7%. We're saying if you get a profit margin above 7% of sales, we're putting you in that feasibility bucket. For projects that we deem being marginally feasible is when they're within 7% of the target return.

And then, when they don't if they're further than 7% away, then we're doing those as being challenged. And what that means is in order for that project to go forward, you'd have to try to sharpen your pencil on costs, you'd have to maybe reduce some of the finishes, you might have to get some assistance, or you'd have to do some things to try to make that project work. But all of these categories, there still is a profit margin. And when you enter into some market periods like we had in 2008, there were developers that honestly, they were building things at very low profit margins because they just wanted to keep their crews in business. And so, these profit margins, they change with economic conditions.

Okay, let me see here. So this provides a summary of what our analysis when we analyze these prototypes, each one as a market rate unit only, so no affordable requirements. We're looking at how feasible these are just in the market as 100% market rate. And so the low density single family detached, we found that it generates a profit margin of 13% of sales price. So it's actually more than the target, so it's feasible.

The medium density single family, it generates a profit margin about 12% of sales price, so it's feasible too. And the medium, the high density again is about 2% above the target of 10% to 12, it's feasible. But once we get to the townhome and the apartments, we're showing that both of those construction types are challenged. And I know they're going forward. You have building permits for some of them, but they are not they are more challenged, their economics, than these other single family detached.

And so our analysis would indicate that those product types right now, given market conditions today, would really struggle once you layer in an affordable housing requirement on that, given market conditions today.

So

after we analyzed the full market rate projects, then we started doing these testing these different affordability requirements. And so these are all the different scenarios that we ran. We looked at if you added a 5% on-site requirement at low, a 10% on-site at moderate, a 10% at low, a 10% very low, 15% low. And for rental, looked at an on-site requirement of 5%, 5% low, 10% low, 10% very low, and 15% low. And then for the in lieu fees, we did some scenarios of looking at a $5 per square foot.

And when I say $5 per square foot, we mean instead of providing an on-site unit, you would charge all the market rate units a fee of $5 per square foot of living area. So if you have, you know, 1,000 square foot and then you home and then you add a $5 fee, so then that would pay 5,000 the fee would be $5,000 for each one of those units. We looked at $10 per square foot fee. And then as another scenario, which is a common way that cities are doing in lieu fees today, is that they're charging in lieu fees not on the basis of that gap between market and affordable as an on-site unit because that gap is so huge. They're saying, well, you know what we're really going to do is we're going to use fee revenue and we're going to apply that to support the construction of tax credit units, apartment tax credits, that then target that extremely low.

They target very low. So they're deeper in affordability, but then you have on the flip side of that, you have that it costs less because you're able to leverage tax credits, low income housing tax credits that cover a big gap, a portion of the gap. Have often you're able to bring in other state funds like the AHSC program for infrastructure. There's home funds, and then also you have a deferred developer fee. So, there's some other funding sources that are brought to bear to help cover that gap.

So your money goes a lot further. It's bigger bang for buck. You get deeper affordability at less cost. So we analyze then if you were to do an in lieu fee equivalent to the cost of providing 5% on-site units, and then 10% on-site units, and 15% on-site units, assuming that they tax credit apartments instead of being, you know, forced to have homes. And this is the findings of that analysis.

So these are these different scenarios. And so we found that these, the low density single family, the medium density single family, and the medium high could all afford an on-site requirement of up to 5% low or 10% moderate or 10% low and still remain feasible. So if you required them on-site construction, that they could afford those levels of on-site and still remain feasible. If you got to 10% on-site at low income, however, it became marginal. And so, at 10% very low, it was also marginal.

But, once you got to 15%, we're showing that it crosses over to the line to being challenged. And, we wouldn't recommend really that, you know, that you levy fees based upon the challenge level. The in lieu fee of $5 and $10 per square foot were feasible for all of those three prototypes. And then, these are just showing what the and then also the $5 you know, the 5% on-site assuming a tax credit subsidy, that's feasible. 10% off-site requirement tax credit, that's feasible.

And 15% is feasible. And you can see that with that, the equivalent per square foot fee for that, if you had a 5% or say, let's go with 10%, where you're getting really 10% you're getting value for 10% units, you could establish a fee of $4 a square foot on the low density single family units, and that would generate enough funding for 10% off-site units and $5 So you can see that those are much less expensive. We did not we don't show here the impact on the townhomes and apartments because the market rate scenarios were challenged, And then if you just add in another burden of affordability, it's going to make those projects even more challenged. This table provides a summary. If you were to charge the standard that people are going through now is really putting if you do an in lieu fee, you levy it as a per square foot cost on the market rate units.

That's how instead of historically, some cities have done it like a percent of the sales price, 1% or 3% or something of the sales price. Other ones are doing it per DU of affordable unit required, but standard now is to try to make them somewhat consistent with impact fees, which are all on a per square foot basis, and that's what the California Mitigation Fee Act requires. This table provides what you would have to charge per square foot in order to be equal to the equivalent in cost on the impact on the developer. So for a 5% on-site at low for that you know, low density project, you'd have to charge a fee of $13.44 per square foot. If you wanted to get down to low or 10% low, putting a fee that would be equivalent to providing 10% on-site units at low, you'd have to have a fee of $27 a square foot.

So, and you can see it goes up for 10% very low, you'd have to have a fee of over $29 a square foot. So those fees really ratchet up in order to be equivalent in cost to those on-site. But conversely, if you were to do a fee that would provide equivalent of 5% tax credit units on those large single family homes of 3,400 square feet, you could do that with a fee of $2 a square foot. So that just shows how, you know, just how the power of those tax credit units are. They lower the cost and they give you deeper affordability.

So that's their findings of the feasibility analysis. And then now I'd just like to turn to the next component of our study, which is the residential nexus analysis. And so what a nexus analysis does, first I want to say it's not a requirement to establish, you don't have to do a nexus analysis, it doesn't have to underpin an inclusionary program or in lieu fees of providing on-site units. The only time you have to do a residential nexus study is if you're imposing impact fees, and then that's per the California Mitigation Fee Act. But in this case, the city has been considering doing an inclusionary program and then with an in lieu fee, so it's not required, but again, the housing element wanted it.

Sometimes, you know, you have your city attorney just prefers that you do nexus analysis, and so that was a requirement of the housing element, so we did one. And what it does is it takes it's a model that estimates the impact of the construction of a new market rate unit on the demand for affordable housing. And the basic framework of it is kind of is highlighted in this chart. And so you have a new housing unit. So it has and that housing unit, they spend money on goods and services.

So the more expensive that house is, the more disposable income the household has, they spend more money on goods and services. Some of those goods and services, that generates those goods and services purchases generate jobs. Some of those jobs are low paying, like retail workers, hotel workers, and so then it generates the demand for affordable housing. And so that's how that analysis works. And then you're able to break down what percentage of the demand that it generates by income category, for what percentage of demand does it generate for very low, what percentage of demand for low, what percentage of moderate.

And so we prepared this analysis. We do this for cities all over California, these analyses. What this this shows the findings of our nexus analysis, and as you can see if you look under the second, well, you can say if you had 100 market rate units and then the cumulative demand for up to moderate for the single family low density, it would have a demand for 25 units. And of those 25 units, it would be 17 units for low and up to 25 up to moderate. And so we did that same.

And you can see that if you go over to the apartments, a market rate apartment generates demand for 100 market rate apartments would generate demand for 11 moderate units, and of that eight of those, 11 would be at low. And if you look at the total percentages that would be required to mitigate the impacts, see it's broken down by these categories. And so if you look at for low income, it ranges from 7% for the apartments up to 14.8% for the low density single family, and then if you look all the way up to moderate, then you have a required percentage of 20% is the max, is what would mitigate the impacts for a low density single family, and about 9.7% for apartments. So these are the findings of our nexus analysis as to what that, but you're not, your program isn't tied to those per se, but it can be useful if you're doing fractional fees. And so anyway, so it's a factor that plays into our recommendations.

And the last piece of our scope award for these on studying for the residential requirements is looking at then what are the program elements of different neighboring communities, and we looked at five jurisdictions, one being City Of Sacramento, Roseville, Loomis, Folsom, Elk Grove, and Placer County, and what we found is that many of them have a 10% on-site option or requirement, but only Loomis requires on-site units. All the other ones have, you know, in lieu fee programs. On-site requirements for affordability, City Of Sacramento has low, Loomis and Folsom have low and very low, Placer County has moderate, low and very low, and Folsom has no requirement on rental units. Roseville and Rancho Cordova do not have inclusionary programs per se. They don't have a specific requirement for, you know, construction throughout the jurisdiction.

They're different. They're different requirements. In terms of the fee requirement or option, Sacramento has a fee of $3.56 per square foot. Folsom just changed their program, and they have a fee of $3 per square foot. Loomis has not yet adopted a fee.

They were considering a very high fee, but they have not adopted a fee yet. Elk Grove has a requirement of between 3,800 or 6,300 per market rate unit in lieu fee, and then Placer County is considering modifying their fee, but their current fee is $2.73 per square foot. So that's what all the neighboring jurisdictions are doing. Some of them are older, you know, they've been established a while, and then so you could say that they're somewhat behind, but that's what it looks like right now. We are So these are a summary of our recommendations for the residential piece of this project, of your program.

We're recommending that you establish an inclusionary housing obligation with an in lieu fee option by right, so people, developers can pay a fee by right. And we are recommending a 5% on-site obligation at low income, because that is feasible for most of the product type, for all of the for sale. It's kind of the lowest common denominator. It will be challenging for the townhomes and apartments, but we are recommending, and in tandem with that, is an in lieu fee by Wright of up to $5 a square foot on all market rate units, and that is the 5% obligation is also consistent with the lowest common denominator on the nexus analysis for low income. So, it meets that test.

If there was ever to be a challenge, it's there. And the $5 per square foot is higher than what, you know, the other neighboring jurisdictions have of three, but it certainly is supported by the feasibility analysis as being feasible for for sale projects, and it also will generate more than the 5% on-site if you apply those fee revenues to fund tax credit units in apartment projects. So, it will benefit the city in terms of meeting the RINA needs. And we suggest that you consider a reduced fee on multifamily. Staff has, you know, for ease of administration had suggested that everything, all the requirements be the same across all prototypes.

I understand that. But you could consider having a bifurcated program where you have a reduction of fee on multifamily until that market segment, that market strengthens so that it will be less, you know, of a burden on those units. And then we recommend that you exempt projects with nine or fewer units. And I think that's consistent with the current ordinance, the temporary emergency ordinance that you passed, that exemption. So, I'd like to turn now so that kind of caps off the residential analysis that we did, and then I'd like to now turn to our commercial linkage fee, and then after I finish that we're happy to answer any questions.

So, a commercial linkage fee analysis is a non residential analysis, and We did a nexus analysis that then does the same kind of a flow of looking at, you have new nonresidential space, new office space, industrial space. It generates jobs. Some of those jobs are low paying. Those people spend money, and some of the money that they spend is on services. And so then you get then the incomes of those people, and then you look at them what is the demand for housing.

So that's the chain there in that analysis. It's just the same as the residential, except it starts with the jobs. And what that nexus analysis does, in this case, the commercial linkage fee is an impact fee. So you have to do the nexus analysis. It's required by law. And it establishes the maximum legally supportable fee for an affordable housing impact fee on non residential. So you have to, you know, go within the constraints of what nexus analysis are. And so our analysis complies with the California Vitigation Fee Act. This is the chain, as I said before. It's the same as it was for affordable housing.

Okay. These are the findings of our analysis in terms of the demand for affordable for each type of non residential development. We looked at commercial, retail, we looked at office, we looked at hotel, we looked at warehouse, we looked at light industrial, and then research and development. So these are the categories. And you can see that the maximum mitigation cost, for example, for commercial retail, if you want to satisfy up to 120% of median, would be $72.5 per square foot.

And those fees are very high, obviously. And so these are just the maximum fees. They're not fees that we would recommend. Nobody charges fees that are equal to the maximum for commercial linkage fees, because it just you wouldn't have any construction. So you can see the maximum fee for office, if you were to charge it all the way up to support moderate income, be $28.2 per square foot, for example.

And then you go down research and development, 16.2 a square foot, light industrial, 8.8, which you could charge I'm sorry, that's just for the $80 to $1.2 The maximums are the bottom line. So for research and development, would be a maximum fee of $28.2 for going all the way up to 120. I misspoke. Okay. In terms of what other communities are charging on commercial linkage fees, Roseville and Western Placer County don't have any fees that they charge.

Folsom charges the maximum they charge a fee of $2.05 on all commercial. The highest fee in Sacramento that they charge is on office space, and that's $3.33 per square foot. The highest fee that the county Of Sacramento charges, 3 for office, as you can see here. And for Elk Grove, the highest fee is on hotel space of $311 And then the highest fee in Citrus Heights is $228 for on hotels again. And then the highest in Rancho Cordova is 97 per square foot on office space.

In terms of our recommendations for non residential, if you decide to go forward and levy a fee on non residential dental development, we recommend that the fees be similar to what your neighboring jurisdictions charge. And so for office, hotel, commercial, we recommend a fee between $2.75 and $3 a square foot. For research, development, and industrial, we recommended a rate of $1 to $2 and then you could, if you want to encourage development, commercial development in the downtown, for example, you could apply reduced fee level in the downtown. Many communities do that. And then we, if you want to exempt small projects, we suggest exempting projects of less than 5,000 square feet be exempt from the commercial linkage fee.

So those are our findings for that component. The next steps, I mean, we're here to share these findings with you and then to get your feedback. Excuse me. On March 24, we will be bringing the report to the city council for their review. And then if the city council elects to go forward with considering adopting an ordinance and a fee resolution, then we would prepare those.

And then we would be back before you on April 7 and then before the city council for reviewing that ordinance on April 28. And so that's our schedule. And so that wraps up my summary. And happy now to answer any questions Or turn it back to Elizabeth, I guess.

Okay, questions. Start to my right.

Well, yeah. Questions and statements, I guess. So, a lot of information, very comprehensive. Thank you very much, actually. And it sheds a lot of light on the complexity of the situation.

Guess more of a statement, just to kind of summarize. Lots of information. We are Rockland is unique. We're landlocked. We have limited space to grow. I think the state takes very limited consideration of our unique characteristics in our city. So a lot of this, what I'm seeing is is is, again, great information from the perspective of being presented, but but onerous in a lot of what I see the impact being on developers. Rockland needs more density to hit their to hit their numbers for Arena. To get the the low numbers, we have to hit the density. We need more density.

It's gonna get denser and denser and denser, which I know the city of Rockland residents love. And to make it feasible, we have to effectively charge a higher fee, whether it's a percentage or an in lieu fee on a per square foot basis, and that's kind of how we get to that $5 a square foot number, which helps us mitigate at that lower level of income to build.

Well, it generates more units, supports more units. If you were to use that fee revenue of $5 and then apply that to supporting filling the gap on tax credit projects, you would be able to get a higher count of units to apply towards your arena than if you had a fee of $3 it's just

makes sense. I mean, obviously if we collect more money, we're going to have more money to apply towards other Exactly. Without getting into it, because the numbers are pretty specific. I guess my position is this, and we can get back to that as we go around the table. I just wanted to clarify. For us to be able to hit our numbers, our density numbers at the levels that the state wants us to hit, To do it effectively, we need to charge a certain rate per square foot, call it $5 a square foot. I guess I'll get into my analysis afterwards. So I don't have any questions. I just wanted to be clear on that. And from the commercial linkage fee, is it a again a per square foot thing on there's so much information.

I have so many questions. I guess I'm just going to short summarize it and say my position on this is that I would like to see what builders, and I know we have builders in the room, from a development standpoint. Because when we start getting into the, there's lots of variables in development. And I know you guys do a pretty good job of nailing it down to the numbers on what cost. But there are so many different variables that when the builders come to us or groups come to us and say, hey, we're willing to negotiate, there's a fee we think is reasonable, I think we have to listen to that.

On the commercial side, I'm really apprehensive on commercial linkage fees. I have a reason for that. But primarily I don't want to see spillover into the commercial part of Rockland for this. I'd like to keep it kind of centered on housing component. That's all I'm going to say right now.

Mean, again, lots of information, very, very good information. I do appreciate it. I just have certain fundamental positions on the whole affordable housing and what it puts what kind of position it puts us in in terms of offloading all that responsibility to the developers. And I believe there's a burden to be shared, but I know it gets really dicey with some of the numbers you look at in terms of, hey, we're going to build this and we're going to tack on this much of an impact fee or this much of a per square foot fee. So I know we gotta do it. I I think we have to be reasonable on how we assess and and how we put those numbers together. But again, phenomenal information. And, you know, so I appreciate the info the info. Thanks, Commissioner Baron. Commissioner Cortez?

Yeah, thank you. I agree with the comments, a lot of information to digest in just a few minutes here. I agree with Commissioner Barron on the commercial side. I think that's a revenue generation capability for us as a city. So I wouldn't be supportive of any linkage fees on commercial or nonresidential development.

So that puts the burden on all of their residential developments. Being higher than the surrounding areas, I think we put a lot of burden on developers, especially on the upper end, if you will. I don't know so far as in general, what is it that we are charging at this point? How is it that we're doing it? I'm not quite certain on how we're doing it now.

So I can answer that question for you. The city does not currently have an in lieu fee in place. So we do have an inclusionary housing ordinance that requires either 15% at low, 10% at very low, or 5% at extremely low. When So residential builders come in, are required to build at those affordability levels and include those units in their current development. We do not have an inclusionary fee at the moment. So there is no fee being charged to cost of those units. So it's just the construction of units at this point.

Okay. I see. So this will help us achieving those numbers but we don't have the land to do that. So okay. I see now the point on the $5 being or at least a fee that it will be higher than our neighbors. Okay. Okay. So far, that's the questions I have.

I just had to touch back

on something. Okay. Is Mark. Thank you, Christopher. So we help

identify or break down for us on, we got a letter. So I'm I'm gonna go down some some of the questions that were brought up in in the in the blue memo just so we can get clarity. And just talking about a 100 unit market rate apartment complex kinda using your information. The gap effectively when you nut it all down, it's $1.44 a square foot. I don't know if you're looking at the same memo I'm looking at. And this is using some of your information, and this came from a Blue Memo individual. Is that being conservative? Is that not taking into consideration the density requirement that we have?

With the dollar Or report for

maybe you can answer that.

Yeah, and I just want to talk, I want to pull back a little bit and kind of talk picture about about the purpose of the report and the purpose of the study and kind of the feedback that we're that we're trying to solicit. Perfect. So what we're looking for really is a policy level decision tonight from the Planning Commission on whether the Planning Commission would like to see an increase in the in construction of units. And so we have the the breakdown of the fees on how much you would need to charge fees if you want to incentivize developers to build units instead of charge a fee. Or are we looking to recoup some funding so that we can use that to build affordable housing off-site and other locations for 100% affordable projects and let allow our allow developers to pay an in lieu fee instead to kind of fill that pot so we can use that.

So a little bit of context for how we meet that gap for those 100% affordable projects. The city has an affordable housing incentive program, which you guys might be aware of. It's a three part program where we offer a reduction in development impact fees. We offer, cash incentives, and we also offer, fee, fee deferrals for a select number of fees to certificate of occupancy versus, issuance of building permit. And so when we talk about, collecting a fee, a $5 per square foot fee in lieu of building units, that would go into a pot of money that would help these 100% affordable developers close the gap in their financing.

So many affordable developments right now, 100% developments, even if they get tax credits, even if they get alternate financing, there's still a little bit of a gap on those units and so that's what that funding would go toward. So we're really looking for the Planning Commission to kind of talk a little bit high level about whether you want to see construction of units, whether you want the fees so that city staff can then go out and solicit additional construction of a 100% projects. That's kind of what we're looking for. There is no fee being recommended tonight. That would come back later via resolution.

And so, yeah. And and we did receive the blue memo, like you said, that broke down some of the math. And and Debbie, you're more than welcome to to comment on that. I I just don't want us to get too wrapped around the axle and exact number amounts tonight because there's no fee being proposed. We're just kind of talking big picture about policy level decisions. Thank you.

That was very helpful. Thank you very much.

I'm happy happy to answer any other questions you may have about it. So

then since I'm being so articulate in the way I'm communicating tonight. So yeah. Then I I guess my my position would be on this that I'm a I'm not a big builder a unit builder. I'd like to see the in lieu fee. I I think we should have an in lieu fee if if that's the If that's where we are in today's world, then that's the way we'll solve the problem.

I have a different opinion on in lieu fees and all that stuff, but that's not part of tonight's meeting. And I'd like to see an in lieu fee that's more consistent with our neighbors, that gives our our that makes us more competitive with surrounding jurisdictions. So my position would be, and in LUFI, which gives developers some flexibility, my opinion, but not in the LUFI that's so onerous that we keep development out and make it hard for them to come into our town and finish out the build out that we need. So that's kind of where I would sit on this. And then I would look to, I guess, you guys and city council down the road for more information on the number, the dollar amount. But I would lean towards the inclusionary fee, but a competitive inclusionary fee that allows developers to not take

of And we're

other

in my opinion, it would be not to force them to do on-site. In the I think and I may be wrong on this, but we have lost some of the land that had been designated for our arena to market value because there's no it just doesn't pencil out. So in that case, that allows more flexibility for development in the city. But overall, we had to be competitive with our neighbors pretty much.

Commissioner Armstrong.

Okay. We're gonna try to do this. Thank you. Very comprehensive. I'm okay with it. I think we should send it up to city council and have them take a look at it with your recommendations and everything. So I'm fine with what you've presented. For us to move forward to city council to have them take a look at it.

Okay. Thank you. I have a few questions. Number one, you you said we have I mean, we have I don't know what to what to a policy, basically, that that says that they have to build so much affordable. I mean, do we ever actually enforce that?

So the inclusionary ordinance that is in place right now went to city council for second reading November 11. It was effective thirty days after that. So it's been in effect since December 11.

Okay.

So there's really there have not been any new development projects that have been proposed in the last two or three months that we have required them to do that.

So but that is the requirement now as of December 11 where

That that is the recurrent requirement.

Yes. They have to do that and and then we're we're passing or we're talking about this to say, if they don't wanna do that, then they can they they give an either or. Right?

Okay. Yes. And just for just to be ultra clear, there are four different ways that people can meet developers can meet their, inclusionary obligations. So that is, off-site construction, they can build units elsewhere in the city. They can build them on-site at that 15%, 10%, or 5% level that I clarified earlier. They have the ability to pay an in lieu fee, but the ordinance does not it just allows for the ability to set a fee. It does not set the fee itself, but it carves out the ability for a future fee. Or they could do housing re rehabilitation. So there's actually four methods to meet that compliance for inclusionary housing. The the main one, though, is that 15% at low, 10% at very low, and 5% at extremely

Okay. The second question is did you have a question? No. Okay. The second question is rose does Roseville have any of this at all? I mean, they have any fees for for this at all? I didn't see Roseville included in this one I saw.

Yeah, I would defer to Debbie and her staff who did the analysis, but Roseville works on a larger, on a specific plan level, I believe, when they establish their fees. So Debbie, are you

able They've to basically divided the city into these different specific plan areas. And then within that and they established this long ago when it was really greenfields. And they identified then parcels within each specific plan that were going to be designated for affordable housing. And they basically are they've been successful in that then most of their all their affordable units have really been achieved through 100% tax credit unit projects. And so developers of market rate projects then pay a fee or they can satisfy the requirement by so many units within that tax credit project.

But they do not have a citywide inclusionary program.

And they also have a lot more space and area that they can build on. So I understand that, I recognize that. Didn't see that in the report and being there are

close No, we do to have it included in Roseville, but they just don't have a citywide.

I also also didn't see anything on Lincoln. Did we see anything for Lincoln? What was our our other neighbor to the north? So I'm I'm curious if if we knew anything about if they have any fees or or anything like that.

It's not included in the report tonight, but we can certainly look into it get back

to It'd be good to know. I mean, we I know we did some of the areas around here, but we didn't do our our two closest neighbors, which

Yeah.

Are you know, I mean, if if there is such thing as competition, it'd be good to know.

Right. Right. Another thing about Lincoln, they also have a lot of land that they are able to

grow in.

Granted, mean, I I get that. But I I that we're we're in a very we're in a tight spot.

Right? Absolutely. But we can certainly look into that. So the Roseville the Roseville was done. It's just it's not it's kinda apples and oranges, not really comparable to what we're talking about. But we'll certainly look into Lincoln and we'll follow-up later with the commission.

My guess is that they probably don't. And and so that you know, we don't wanna put that out there too much because then it it doesn't doesn't work in our favor very much, but just to bring that up. And then the last thing that I do on is on and on that same topic is how much I mean, how much do we have in in the game here? How much land do we actually have to build on left in in Rockland? And I know that's I'm not looking for a specific number necessarily, but I mean, if we put in an impact fee or or we do this, is it is it ever is it actually gonna work? You know? I mean, or or is it it's are we are we beyond the the possibility of of such things?

You know, I believe that I've actually worked with planning to get those numbers. So let me look back through my emails and see if I can find that information, and I'll come back when I have that

for you. Yeah. Mean, the question really that I have is, like, you know, I mean, how dire are we in dire straits, I know we're we're in dire straits, but, like, what what does that mean? Does that mean, like, everything we build in Rockland now has to be a a high rise apartment building to meet our arena? Or, you know, can we actually still build nice houses that people who live in Rockland and move to Rockland and want to live in Rockland want to live in? So

And I was actually able to pull up those numbers. So I do have some general acreages within the city of Rockland that I can provide you with. So for high density residential, we have about 24 acres left. Low density residential is about 200. Low density and medium density combined is about 80 acres, just a couple acres of low density mixed use, and then we have, medium density kind of combining them all together. It's roughly 40 acres and then another three acres of medium high density residential. So there are some, especially for the low density residential, we do have more acres in low density residential but certainly not a lot of acres in the city total.

I mean that's yeah.

Less than 400 acres and lots of units to fill.

Yeah. Okay. Okay. Those are my questions. Any other questions? No? Okay. Thank you. Thank you. Alright. We well, with with that, we will open it up for for public comment. See Marcus is ready. Okay.

Mister chairman, we just got this report like you did six days ago, and 150 pages are still pouring through it. I would ask if we don't if we are limited to three minutes that we maybe split up residential versus commercial linkage or if we could have some extra time to go through some of these comments because the report just at first blush and I think there's a lot of people in the BIA reading this over the weekend. It's a lot of material to go through.

Go go ahead and and and speak. If we if we feel like you're going too long, I'll give you a high sign.

Okay. And and Jeff Short did submit a letter. He apologized for not being here. No. Prior to No. To prior to tonight's hearing, he had a hearing scheduled in another county that he had to be at oh.

I guess I am gonna I'm gonna I'm gonna time it for three minutes. Go ahead and take the three minutes for each. All right. There we go.

But again, I think a lot of his comments were well thought out. On one of the comments about the $60,000 per gap, I represent affordable builders. We have affordable builders in the BIA, and that's generally what they say. If you take care of all the tax credit, taxes and bond financing, all the various pots of money that go into an affordable project, there's about a still 50 to $60,000 gap. But I I did wanna say that, you know, again, a lot of concerns were expressed in the quick review we had.

They're in Jeff's letter. But I I did wanna say that the building industry, the only industry that builds housing is being asked to also shoulder the burden and the cost of affordable housing, which is rather interesting. And what that means, if you don't have an in lieu option, if you just have a build option, you end up with a situation where the folks that are buying at market rate actually have to pay more to be able to subsidize the units that are in a build option. You don't go to your grocery store and there's two parts of the store. One part of the store has the same same vegetables and fruits and everything else, but they're just priced lower.

And everyone else in the rest of the store has to pay more to pay for that so that the grocer can stay in business. Go to Toy Row. We don't ask car dealers to say, on your lot, you have the same cars that everyone else has, but some are just gonna be priced lower, and we're gonna raise the cost of these other cars so that these can be priced lower. So it's really we're in a very unique situation. It's because we have to ask permission to be able to build housing.

But be that as it may, looking at the comments that came in from commissioner Baron, commissioner Cortez relative to your surrounding jurisdictions. Capital, when it's looking for builders to look in various locations, various jurisdictions, they're gonna look at costs. And by the way, your per per unit building promote you had in PCWA and SPMUD is a 100,000 roughly a unit, not 70,000. But when they look at those costs and you look at a fee, let's say the fee on a 2,200 square foot house, $5.11000. But that's an $11,000 hit on the price.

That might be 20,000 because they have to have greater cost to carry. They have to borrow more. And as was noted with the 400 acres or so that was noted by staff, it left in the city. Just about every project in Rockland is an infill project. Infill projects carry greater entitlement risk, and that's priced into the return that capital investors will look at. And when you're looking at Folsom, that went to $3 a foot, Elk Grove, theirs is a per unit. But if you do that over a 2,200 square foot house, it's $202.88 a foot. Okay.

Can we guess just okay, that was your time for that. Do we have any questions?

Well, just want to bring up my comment earlier about the ADUs. We would really ask the commission to recommend to council that you consider ADUs and junior ADUs as being able to meet the inclusionary zoning requirement because it actually gets units built. Placer County is seeing them under construction right now, and it's not just a small number. It's a rather large number.

Good evening, Chair Thomas, members of the Planning Commission. My name is John Talman. I'm with West Park Communities, 1420 Rocky Ridge in Roseville. I first wanna compliment, staff and the consultant for taking a look at a broad base source of funding for affordable housing. But I will say without, and I won't get into this in the few minutes that I have, is I take great exception with the methodology and the nexus analysis that a single family home, the construction of a single family home causes the need for an affordable housing unit.

Every home that's sold in your city is affordable. It's affordable to that family that's purchasing that home. And by imposing an inclusionary zoning policy and a fee, means that you're picking one group over another to have the gift of housing. Because that family that could afford the house in Rockland, they're not gonna be able to afford the house when we add $15,000 to the cost of the home. They're not.

And that's the reality of what's happening here. Not including commercial, you know, that if if the new home creates the need for two jobs at a retail center, that somehow the house's responsibility, isn't that a wage issue? And I'm certainly not a peer advocating any type of minimum wage standard. But it's not the house's construction that's created that. And commercial should have a participation, should have a role in that.

Now, we can argue about what that number might be, and I'm not a commercial developer, so I'm not armed for that conversation. But the point I want to try to get across is, as you're thinking about the policy that's before you and the decision that you're going to make in April, is that you are making what is effectively income redistribution. You're picking this group over the folks that can afford that house. Some of the numbers that were thrown around, and I'll try not to get too wonky on the numbers, but Marcus is right. On a medium density house on a 7,000 square foot lot, the fee is $82,000 The lot size Marcus was referring to is a lot that's larger than 10,000 square feet.

Direct construction cost on a 2,500 square foot house at $15 a square foot is about $2.80, a little over $2.80. And then you have land and improvements on top of that at $2.50. I'm $620,000 into that house construction before I've even borrowed the money to build it, paid the people to build it, paid the people to sell it, and paid the people as part of my soft overhead on a house that I can sell for $489,000. One of two things happens. One is the house doesn't get built or the other houses have to share that burden.

And my quick math sitting back there, that's another $31,000 to the cost of the house to produce that unit on-site. Ask all of you, when you bought your first home, would you be able to absorb an additional $30,000 in cost in order to purchase that home? I know I wouldn't. And I know builders don't have additional room in their pro form a, this idea that these fees are feasible. I don't know a builder in Rockland that has an additional $15,000 in their pro form a to cover. So with that, I'd ask broad based flexibility, Mr. Short's letter. I'd encourage you to read that and understand the math And I appreciate your time. Thank you.

Chairman Thomas and Planning Commission, my name is Matt Gustus. I'm with Anthem Properties at 1410 Rocky Ridge in Roseville. And I'm coming with very similar perspectives of what they have stated. But I'm coming from two perspectives. One is as both a developer of lots to sell to builders and an actual homebuilder. So we do both. From the development perspective, you're right on though with being competitive. If we have lots or land that we're looking at in a neighbor or in a community that has higher fees, we automatically have to discount that land. That land has to get discounted a certain percentage or certain amount because it has higher fees. So, it's going to be less likely for a developer to want to go build somewhere that has higher fees.

We're automatically going to put that to the side. It's not something we're going be as desirable to go look at and then ultimately build houses. So, if a fee does come into perspective, I would highly encourage competition. As it was said in the blue letter, dollars 3 is our recommendation. We've built several communities where the fee is under $3 and it is more feasible.

As a home builder, I wanted to come with two perspectives. One is options. We built a couple communities where we had an option to do a fee or to build either JADUs or ADUs. Dramatic difference to the end user. The end user who gets a JADU, whether it's deed restricted or not, say it's 500 square feet, we can actually amenitize the house and there's value.

There's value to the direct user. And what we also see, we see a lot of people, I'll call it the sandwich generation, who have their parents move back in. So, instead of their parents, their elderly parents who might have to go to a home or some other kind of living circumstance, they now have a place where they can live with family. And then I also see the younger generation who are still struggling to get affordable housing. Kids in their 20s and 30s who can't afford, whether it's an apartment or a house, now they can actually live in an ADU or a JADU with their parents or relatives at either a discounted rate or a completely better rate altogether.

So, we've built, in some neighborhoods, up to 30% of those JADUs, and it's a dramatic difference. The cost to us is around 12 to 15 ks. However, we can get that back in the revenues, whereas if we get this fee, what happens is the cost to build the house goes up. Let's just say it's $5 a foot on a 3,000 square foot house. That's 15,000. What that means now is now I have a more expensive house. So it's not like my margin compression my margin compresses. I actually have a more expensive house that goes to market, which means now it's actually more expensive. So, the more fees we have, the more expensive housing is. So, if we're trying to get affordable housing, I do like the density play of both the ADU or the JADU.

That gets whether it's a 10% or 15% requirement per per neighborhood. It's way better for the end user, for the public, and then for us as the builder and the developer. So that's three minutes right on the dock.

Right. There you go. Thanks. So stay up there for a second. So, you're suggesting that push more for the ADUs, for builders to put an ADU or a JADU on there. An option? As an option. Or like giving it a fifth option now on that one? Is that what we're talking about?

So, you either have an NLU fee, a competitive NLU fee, or a 10% JADU or 10% ADU requirement. Even if there's a five or 10 or 15%, that requirement of a JADU is so much more feasible than an actual just a fee that gets no value to the end user. So an option, this or that.

Any other questions for public? Or does anyone have any other questions for the other people? Thank you. Thanks. Any questions at

all for that? No?

If I may, there were a few items brought up. I wanted to thank the public for your comments. I know you've been very engaged in this process, providing feedback and we really appreciate that. There were a few items brought up that I wanted to bring to the Planning Commission's attention. Both Mr. Meloduca and Mr. Talman brought up the cost of fees, right, and the fees associated with building. So on page 23 of the attached report, there's actually a full breakdown of the fees for each residential type, whether it's low density, medium density, medium high townhomes, or apartments. So the Commission can see at a glance exactly how the fees are levied against each of these. Your numbers are pretty spot on what you had said.

So it's about $94,000 for low density, dollars 80,000 total for medium, dollars 67,000 for medium high, dollars 59,000 for townhomes, and about 47 for apartments. But one thing I did want to draw your attention to, and I believe it was Mr. Leduca that mentioned this, is that the city fees for these are less than half in all of these scenarios. So the other fees and the city fees include city, county, state, PCTPA, and Sparta fees all lumped in together for one. School impact fees, PCWA water fees, and SP Munn connection fees make up the rest of those fees.

So just wanted to provide a little bit of clarity about that. And then I believe mister Tallman had a a concern or a question about the calculation of how creating market rate housing impacts affordable housing. And on this slide show, there was a breakdown of it's per 100 market rate units is the actual impact of how many units were created. So that's in the report as well. And so for summary, for 100 market rate units, it will be 17 units up to 80% AMI. That's the it's not a direct one for one. So I just wanted to provide a little bit of clarification on that.

Thank you. And thank you for coming and giving us your opinion on such things. It is appreciated. And with that, I think we'll close public comments on this. And let's discuss up here. Did you want to you're good. Okay. Anything you want to discuss?

Yeah, I'll jump in. We're trying to skin the affordable cat. It's complicated. I really appreciate the options and discussion points you guys brought up, I think as we kind of mix it all together, we're going come up with some solutions. I like keeping fees, impact fees, in lieu of fees low so we can be competitive. I know that it all boils down to pro form a, as you talked about. Mr. Tallman, I think we probably all agree with you on this. It's not the city of Rockland or the planning commission. It's the state of California that's got a big hammer on us.

And I think in a perfect world, we would let market go do its thing and look for opportunities to provide affordable where it's necessary. But we're being forced to do certain things. And so I understand based on the report that we need more density. To get more density, we've got to charge higher fees. And I think that puts us in a pretty precarious situation.

So I did like the idea since we had the ADU component at the very beginning, and we're talking about ADUs, and that's become part and parcel of what we're doing in cities now of at least looking at those options. We're trying to provide options and because we have to take care of this, again, the skinning of the rain a cat. So if the more options we have for developers, the more competitive we're gonna be. So in lieu of fee, and I'm not gonna get into a number now, but I think we have to have a competitive number. If we have to have such a fee.

And it looks like we're going to have to based on what the state's demanding of us. But I do want to recommend to the council that we include at least discussion of an ADU and JADU options so that we give more flexibility to builders. And really, that's all I have that's all in my input. I think it was really good information. And as always, the public's information is always and input's always appreciated. It's a tough thing we have to deal with here. I don't think it puts us in a tough spot, but we're getting closer to trying to figure it out. And it does I won't use the term. It's difficult when we impose these costs on people. It makes it hard to build here.

I do think that Rockland's a beautiful enough place and a desirable enough place that if we add just a tiny bit of a fee, we're still gonna get people that wanna be here location, location, location. So I think there's a balancing point where we can add a tiny bit, not too much, and still be competitive. So that would be my recommendation, analyze ADU inclusion and keep our fees competitive.

Thank you. Commissioner Cortez.

I 100% agree with Commissioner Beran. Let me start with a question. In regards to the option of allowing junior ADUs and ADUs, is that a city? Is the city can do that, or is the state mandates has some mandate on that?

So that was not, discussed in the creation of this report. I would have to discuss that with Kaiser Marston, and we can certainly do additional analysis. But I I don't have an answer right now because that wasn't that wasn't, included as part of this report. Okay.

Fair enough. So, yeah, I I agree with the we have to have options. And from what you mentioned, we already have some level of options. So definitely, my suggestion to city council is that is continue to provide options and be competitive with our neighbors. We don't want to lose projects to them because we need to provide our own numbers.

And from what I keep hearing is what I've mentioned several times is that we're in a position that now we have to be looking at building taller buildings than what we are comfortable with in order to start providing the numbers that we have been required by the state and with the little amount of land that we have left. So my perspective, it's just to continue that and definitely continue looking in more in-depth of the using general ADUs and ADUs for this

exercise here. Thank you. Well, I guess I get the the last word on this, which is I mean, I think we're we all agree. And and the problem is is that we know who the bad guy is, and the bad guy is the the state of California who's coming down on us, you know, and and it's not like we have a lot of options here, so we we all have to to shoulder it somehow, but and I get that the builders are feeling a little picked on right now too, so I appreciate you coming here. And I appreciate actually quite a bit coming with a solution and not just, hey, know, don't do this.

So I appreciate that, and I do think, as commissioner Barron suggested, that we make that part of our recommendation to city council, that yeah. I mean, that's something that we should definitely look at. I mean, want to build houses here in Rockland. I think that that I speak for most of the public here that we would prefer to build houses over much more high density apartments, although we need both, we get that. But if we can add some ADUs on there and fulfill our RENR requirements, that's great too, because we do need more affordable housing too.

So it's, you know, we gotta do all of that. Okay. So with that, are we looking to make a motion here? Are we doing? Are we calling for something here?

I would say that staff has not asked for there's nothing in front of you to act upon other than provide recommendations. Have been taking copious notes and I have received all of your recommendations to city council. So the next step for staff at least would be then to present the report to city council, provide them a summary of your recommendations, and then they can provide recommendations as well. We are not seeking a motion.

Okay. Perfect.

Okay.

Then with that, I think we'll is there any other reports from staff or from reports from is there any other reports from staff?

Evening. Arwin Watt, Planning Manager. With our last meeting having been two weeks ago, there is not much to update at this moment. We do have we will be having a Planning Commission meeting on the seventeenth, which will be in another two weeks. And I believe we've got at least one to two items on that calendar.

Great. Thank you. And any reports or discussion items from the planning commission?

Congratulations, David.

Congratulations, David.

Thirty five years.

Five years?

Sorry. Saw us.

Just didn't Congratulations. See Thank you. You're a junior entrepreneur. I didn't even realize it yet, but yesterday was my twenty fourth year work anniversary for the city of Rockland. Saw it on LinkedIn. I wasn't tracking it myself. Congratulations. And thank you. Thank you. Okay. And if there's nothing else, it is 07:36, and we will close the meeting. Thank you, everyone.