City Council Meeting: September
8, 2009
Agenda Item: 1-K
To: Mayor and City Council
From: Marsha Jones Moutrie, City
Attorney
Subject: Resolution Automatically Adjusting the
Affordable Housing Unit Development Cost Pursuant to Municipal Code Section
9.56.070(c)
Recommended
Action
Staff
recommends that the City Council adopt the attached Resolution which would
automatically adjust the Affordable Housing Unit Development Cost for new
market rate apartments and condominiums.
More specifically, the current Affordable Housing Unit Development Cost
of $277,585 would be increased by $7,217 effective on November 9, 2009. The adjusted Affordable Housing Unit
Development Cost would be $284,802.
Executive
Summary
Santa Monica Municipal Code
Section 9.56.070(c) provides that the Affordable Housing Unit Development Cost
shall be adjusted annually by resolution based on changes in construction and
land costs. On June 13, 2006, the City
Council approved the methodology for ascertaining changes in these costs and
thereby for calculating the adjustment.
This resolution has been prepared in accordance with the approved methodology
and is attached as Exhibit A.
Discussion
Santa Monica Municipal Code Sections 9.56.050(d) and 9.56.060(e)
provide that when developers of market rate multi-family housing are providing
affordable housing units on or off-site respectively and the calculation of the
number of affordable housing units required results in a fractional unit, these
developers are eligible to pay a fee equal to the cost of producing that
fractional unit if that fraction is less than .75. Section 9.56.020 defines the affordable
housing unit development cost as the City’s average cost to develop a unit of
housing affordable to low- and moderate income households. Section 9.56.070(c) of the City’s Affordable
Housing Production Program provides that the Affordable Housing Unit
Development Cost shall be adjusted annually by City Council resolution based on
changes in construction costs and land costs.
In order to implement the Council’s decision, staff formulated a
proposed method of computation to reflect changes in construction costs and
land costs. This methodology was
detailed in an April 24, 2006 letter prepared by Paul S. Silvern of HR&A
Advisors, Inc. (“HR&A”) on behalf of the City. This methodology was approved by the City
Council at its June 13, 2006 meeting.
At its July 24, 2007 meeting and its July 23, 2008 meeting, the City
Council utilized this methodology when it adopted Resolution No. 10230 (CCS)
and Resolution No. 10330(CCS) respectively which establishes the current
Affordable Housing Unit Development Cost.
HR&A
has calculated the appropriate adjustment to the Affordable Housing Unit
Development Cost for FY 2008-09 based on this established methodology. HR&A’s analysis demonstrates that the
current Affordable Housing Unit Development Cost of $277,585 should be
increased by $7,217. The proposed
resolution would revise the Affordable Housing Unit Development Cost
accordingly, effective on November 9, 2009.
The adjusted Affordable Housing Unit Development Cost would be $284,802.
On August 26, 2009, the City published notice of this hearing and
the availability of the HR&A analysis.
The City republished this notice on September 2, 2009. A copy of this analysis has been available in
the City Clerk’s Office for public review since August 27, 2009 and is attached
hereto as Exhibit B.
Financial Impacts &
Budget Actions
There
is no financial impact.
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Approved: |
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Forwarded to Council: |
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Marsha
Jones Moutrie City
Attorney |
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City Manager |