REPORT TO COUNCIL
SUBJECT
Title
Actions on a Density Bonus Agreement (DBA) with Santa Clara Pacific Associates to Allow a Multifamily Housing Development with 198 Affordable Rental Units at 80 Saratoga Avenue and Delegation of Authority to the City Manager to Negotiate and Execute Future DBAs in Accordance with Santa Clara City Code Section 18.78.060.
Report
COUNCIL PILLAR
Promote and Enhance Economic, Housing and Transportation Development.
BACKGROUND
Santa Clara Pacific Associates (Owner/Developer) is proposing to construct a 100% affordable housing project with two hundred (200) units located at 80 Saratoga Avenue (Project). On September 14, 2022, an architectural review of the Project’s six-story mixed-use development was approved at the Development Review Hearing.
The project is a 100 percent affordable housing development with 200 dwelling units which will include four floor plans types consisting of studios, one-, two- and three-bedroom units ranging from 416 square feet to 1,047 square feet in size. Affordability is determined based on the ability of households to pay rent depending upon household income level as a percentage of the average median income (AMI) for the County, with adjustments made for household size. Of the units, 198 units are to be provided to low income households earning no more than 80% of the AMI, and two are unrestricted on-site resident manager units.
As a condition of the land use entitlements and per the City’s Affordable Housing Ordinance’s (AHO) affordable housing requirements, a share of all newly constructed dwelling units in residential developments of ten (10) or more units must provide at least fifteen percent (15%) of the units at affordable housing costs made available at affordable rental prices to for extremely low, very low, low and moderate income households as long as the distribution of affordable units averages to a maximum of one hundred percent (100%) of area median income. The Developer is required to enter into an Affordable Housing Agreement (AHA) with the City to designate the Project’s total AHO obligation of 30 units prior to the issuance of building permits.
Additionally, the Project was approved under the State Density Bonus Law in which the City has established the Density Bonus Ordinance (DBO) in accordance with California Government Code Section 65915 et seq, as amended. The DBO, grants a density bonus and regulatory concessions and/or incentives when a developer seeks and agrees to provide a minimum number of housing units with affordable rents to very low or lower income households. The Developer is required to enter into a Density Bonus Housing Agreement (DBA) prior to issuance of building permits. Attachment 1 includes a copy of the proposed DBA.
DISCUSSION
Density Bonus Agreement for 80 Saratoga Avenue Affordable Housing Project
The proposed DBA for 80 Saratoga Avenue is consistent with the income level pursuant to the standards of the DBO, and also satisfies the applicable provisions of the City’s AHO. Approval of the proposed DBA will add much needed affordable housing to the City without any City subsidy. The project will rely on low income housing tax credits, tax exempt bonds, and higher density to subsidize rents.
Density Bonus Agreement Approval Process
The Housing and Community Services Division processes several DBAs each year for rental housing developments. Staff has developed standardized templates working with City Attorney’s office. Staff recommends delegating authority to the City Manager to execute and amend DBAs that are consistent with the requirements per the Santa Clara City Code Section 18.78.060, subject to final review and approval as to form by the Office of the City Attorney. All projects not in conformance to the Density Bonus Ordinance would continue to be brought to the City Council for approval.
On December 6, 2022, the City Council approved a similar request and delegated authority to the City Manager to execute or amend affordable housing agreements in accordance with the provisions of SCCC Chapter 17.40 subject to final review and approval of such agreements by the Office of the City Attorney. Delegating authority to the City Manager to execute form agreement will help streamline the review and approval process.
ENVIRONMENTAL REVIEW
The action being considered does not constitute a “project” within the meaning of the California Environmental Quality Act (“CEQA”) pursuant to CEQA Guidelines section 15378(b)(5) in that it is a governmental organizational or administrative activity that will not result in direct or indirect changes in the environment. DBA Projects that comply with Senate Bill 35 and objective standards are ministerial and therefore are not subject to CEQA review.
FISCAL IMPACT
There is no fiscal impact to the City for processing the requested application other than administrative time and expense typically covered by processing fees paid by the applicant.
COORDINATION
This report has been coordinated with the City Attorney’s Office.
PUBLIC CONTACT
Public contact was made by posting the Council agenda on the City’s official-notice bulletin board outside City Hall Council Chambers. A complete agenda packet is available on the City’s website and in the City Clerk’s Office at least 72 hours prior to a Regular Meeting and 24 hours prior to a Special Meeting. A hard copy of any agenda report may be requested by contacting the City Clerk’s Office at (408) 615-2220, email clerk@santaclaraca.gov <mailto:clerk@santaclaraca.gov> or at the public information desk at any City of Santa Clara public library.
RECOMMENDATION
Recommendation
1. Approve and authorize the City Manager or designee, to execute the Density Bonus Agreement with Santa Clara Pacific Associates for a 200 affordable housing project at 80 Saratoga Avenue on the terms presented, in a final form approved by the City Attorney.
2. Adopt a Resolution delegating to the City Manager the authority to negotiate, execute, or amend Density Bonus Agreements in accordance with the provisions of Santa Clara City Code Section 18.78.060, subject to final review and approval of such agreements by the Office of the City Attorney. All projects requiring an exception or modification to the City’s standard Density Bonus Agreement shall continue to be brought to the City Council for approval.
Staff
Reviewed by: Andrew Crabtree, Director of Community Development
Approved by: Jōvan D. Grogan, City Manager
ATTACHMENTS
1. 80 Saratoga Avenue Density Bonus Agreement
2. Resolution