REPORT TO COUNCIL
SUBJECT
Title
Action on an Affordable Housing Agreement with SHAC Tasman CDM Apartments LLC (an affiliate of SummerHill Apartment Communities), for 2343 Calle del Mundo (APN# 097-05-062; 097-05-063; and 097-05-064) [Council Pillar: Promote and Enhance Economic and Housing Development]
Report
BACKGROUND
SummerHill Apartment Communities is proposing to construct a three hundred and forty-seven (347) unit apartment community (Project) located at 2343 Calle del Mundo (APN# 097-05-062; 097-05-063; and 097-05-064). The project site is located within the Tasman East Specific Plan, which was approved by the City Council on November 13, 2018. Development projects within the Tasman East Specific Plan area may be entitled through an architectural review process and are typically not subject to further City Council review.
SummerHill Apartment Communities (Developer) is a Bay Area-based residential real estate developer with extensive experience developing and operating housing throughout the Bay Area. SummerHill owns the 3.06 acre parcel located within the Tasman East Specific Plan area of the City, at 2343 and 2363 Calle Del Mundo and 5211 Lafayette Street, Santa Clara, California (APN: 097-05-062; 097-05-063; and 097-05-064) and has received architectural approval to develop a multifamily housing project that includes three hundred forty-seven (347) rental units including thirty-four (34) affordable housing units (collectively, the “ Project”). SummerHill will provide four (4) studio units, twenty-one (21) one-bedroom units and nine (9) two-bedroom units as affordable housing units.
As a condition of the land use entitlements, and per the Tasman East Specific Plan’s inclusionary housing requirements, the Developer is required to enter into an Affordable Housing Agreement (AHA) with the City to designate ten percent (10%) of the total units within the project which shall be designated as affordable. The total obligation is 34.1 units, which is slightly less than ten percent (10%) due to a provision in the Specific Plan that allows for a reduction of the housing obligation to eight percent (8%) for densities greater than one hundred twenty (120) units per acre. Developer will make these Units available at affordable rental prices to low, median and/or moderate-income households as long as the distribution of Affordable Housing Units averages to a maximum of one hundred percent (100%) of Area Median Income.
DISCUSSION
The proposed AHA with the Developer uses the City’s standard form and will enable and guarantee the delivery of thirty-four (34) affordable rental housing Units within the Project according to the terms of the Affordable Housing Agreement. The distribution of Affordable Housing Units will include six (6) low-income units restricted to eighty percent (80%) of Area Median Income (“AMI”), nineteen (19) median-income units restricted to one hundred percent (100%) of AMI, and nine (9) moderate-income units restricted to one hundred ten percent (110%) of AMI. The calculation of the affordable housing requirements resulted in a tenth (.10) of a fractional unit, which will be satisfied through payment of an in-lieu fee of $16,150.15. Fees must be paid prior to issuance of occupancy certificate for the building.
Approval of the proposed AHA will implement the City’s General Plan and Tasman East Specific Plan inclusionary housing policies consistent with the previous land use entitlements granted for the subject property.
The key terms of the proposed Affordable Housing Agreement include the following:
Term:
The Project that will be designated for low, median and/or moderate-income households as long as the distribution of Affordable Housing Units averages to a maximum of one hundred percent (100%) of Area Median Income and shall meet affordability requirements for a period of fifty-five (55) years.
The Project:
The Developer has agreed to provide thirty-four (34) units within the Project that will be designated for low, median and/or moderate-income residents. The proportion of Units shall be six (6) low-income units restricted to eighty percent (80%) of Area Median Income (“AMI”), nineteen (19) median-income units restricted to one hundred percent (100%) of AMI, and nine (9) moderate-income units restricted to one hundred ten percent (110%) of AMI.
Lease-Up and Marketing:
No later than ninety (90) days prior to the start of accepting applicants, Developer or an Affiliate approved by City of Santa Clara shall prepare and submit to the City for reasonable approval a marketing and outreach program for the Affordable Housing Units which shall contain, among other things: (i) how a potential Income-Qualified Household would apply to rent an Affordable Housing Unit in the Project, including where to apply, applicable income limits and rent levels; (ii) a description of procedures and media Developer will use to publicize vacancies in Project, including notice in newspapers of general circulation, at least one of which shall be a foreign language newspaper; (iii) provide monthly leasing reports until all thirty-four (34) Affordable Housing Units have been leased up and occupied, and (iv) mailing notices of vacancies to or contacting by telephone potential tenants on the Waiting List maintained by Developer. Marketing of the Affordable Housing Units shall be done through outreach that affirmatively furthers fair housing in accordance with all federal and State fair housing laws.
ENVIRONMENTAL REVIEW
The potential environmental impacts of the project were addressed in an Environmental Impact Report (EIR) prepared for the Tasman East Specific Plan and related approvals in accordance with the California Environmental Quality Act (CEQA).
COORDINATION
This report has been coordinated with the City Attorney’s Office.
FISCAL IMPACT
There is no additional cost to the City other than staff time and expenses. In accordance with the City’s Affordable Housing requirements, the Developer will pay an in-lieu fee totaling approximately $16,150.15 for a tenth (.10) of the fractional unit. The fee will be deposited into the City Affordable Housing Fund at the time it is received from the Developer.
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>.
RECOMMENDATION
Recommendation
Approve and authorize the City Manager to execute and record the Affordable Housing Agreement with SHAC Tasman CDM Apartments LLC (Attachment 1), to execute amendments thereto, and to take any other action necessary to implement the requirement for the provision of thirty-four (34) affordable rental housing Units at for 2343 Calle del Mundo (APN# 097-05-062; 097-05-063; and 097-05-064).
Staff
Reviewed by: Andrew Crabtree, Director, Community Development
Approved by: Deanna J. Santana, City Manager
ATTACHMENTS
1. Affordable Housing Agreement with SHAC Tasman CDM Apartments LLC
2. Agreement Containing Covenants and Restrictions