Chapter 17.88
AFFORDABLE HOUSING COMMERCIAL LINKAGE FEE
Sections:
17.88.010 Purpose.
17.88.020 Definitions.
17.88.030 Affordable housing commercial linkage fee imposed.
17.88.040 Exemptions from payment of affordable housing commercial linkage fee.
17.88.050 Alternatives to payment of affordable housing commercial linkage fee.
17.88.060 Affordable housing fund.
17.88.070 Waiver.
17.88.080 Enforcement.
17.88.010 Purpose.
The purpose of this chapter is to:
A. Enhance the public welfare by imposing an affordable housing commercial linkage fee whereby developers of commercial development projects will mitigate the impacts of their projects on the need for affordable housing by contribution to the supply of housing for households with very low, low, and moderate incomes; and
B. Implement the housing element by creating a mechanism to provide benefits to the community from new commercial development in the form of affordable housing, thereby helping to meet the needs of all socio-economic elements of the community as provided in the housing element. (Ord. 606 § 2 (part), 2016)
17.88.020 Definitions.
The following words and terms as used in this chapter shall have the following meaning:
A. “Affordable housing commercial linkage fee,” also referred to herein as “commercial linkage fee,” means the fee paid by developers of commercial development projects to mitigate the impacts that such developments have on the demand for affordable housing in the city.
B. “Affordable housing fund” means a fund or account designated by the city to maintain and account for all monies received pursuant to this chapter.
C. “Building permit” includes full structural building permits as well as partial permits such as foundation-only permits.
D. “Commercial development project” means an application for a planning permit or building permit that includes the new construction of gross square feet of nonresidential space, including hotel (full-service hotels, limited service hotels, motels and other lodging), retail/restaurants/services (includes a range of buildings, including retail stores, restaurants, and personal service spaces accommodating businesses like nail salons and dry cleaners), and office/R&D/medical office (includes a range of office and research and development uses, including traditional office buildings, medical offices, and specialized spaces for highly advanced manufacturing and research) or the conversion of a residential use to a nonresidential use.
E. “Decision-making body” means the city staff person or body authorized to approve or deny an application for a planning or building permit for a commercial development project.
F. “Developer” means the person(s) or legal entity(ies), who also may be the property owner, who is seeking real property development permits or approvals from the city or developing a particular project in the city.
G. “Planning permit” means any discretionary approval of a commercial development project, including, without limitation, a general or specific development plan adoption or amendment, rezoning, tentative map, parcel map, conditional use permit, variances, or architectural review. (Ord. 606 § 2 (part), 2016)
17.88.030 Affordable housing commercial linkage fee imposed.
A. Applicability. An affordable housing commercial linkage fee is hereby imposed on all new construction of commercial development projects, including mixed use projects, regardless of zoning designation of the project site, unless otherwise exempted under this chapter. Payment of the commercial linkage fee shall be added as a condition of approval for all development projects subject to this chapter. The fee amount shall be established by resolution adopted by the city council, which may be amended from time to time by the council. Fees shall not exceed the cost of mitigating the impact of commercial development projects on the need for affordable housing in the city. For mixed use projects, the commercial linkage fee is imposed on that portion of the project that consists of new commercial development; the city’s affordable housing program for residential projects will apply to the residential portion of a mixed use project.
B. Calculation of Fee. The amount of the fee, as further described in the fee resolution, is imposed on a per square foot basis for net new gross floor area. The formula below shall be used in calculating the amount of the commercial linkage fee:
(Gross square feet nonresidential floor area, excluding structured parking) minus (existing gross square feet floor area) multiplied by (per square foot fee) equals (total commercial linkage impact fee).
C. Pipeline Projects. The following “pipeline” commercial development projects shall be exempt from payment of the commercial linkage fees required in this chapter:
1. Projects for which a planning permit application pursuant to this title has been filed and deemed complete by February 17, 2017.
2. Projects that have received final planning permit approval pursuant to this title by February 17, 2017, and which are subsequently the subject of a pending application for modifications to the approved plans or permit, except that any increase in floor area from the amount already approved shall be subject to the commercial linkage fees required by this chapter.
D. Timing of Payment. Commercial linkage fees shall be paid following the filing of a building permit application and prior to issuance of the first building permit for the project. A developer may pay all or a portion of the fee owed at any time prior to issuance of the building permit, at the rate in effect at the time payment is made. For phased projects, the amount due shall be paid on a pro rata basis across the entire square footage of the approved development, and each portion shall be paid prior to the issuance of any building permit for each phase.
E. Area Standard Wage Agreement. Commercial development projects where the developer voluntarily enters into an area standard wage agreement to pay “area standard wages,” which are defined as the general prevailing wage determinations for San Mateo County as made by the State of California Director of the Department of Industrial Relations, may be entitled to a partial rebate of the applicable commercial linkage fee. The amount of any rebate and terms of any agreement may be established by resolution of the city council. (Ord. 606 § 2 (part), 2016)
17.88.040 Exemptions from payment of affordable housing commercial linkage fee.
A. The commercial linkage fee shall not apply to commercial development projects adding five thousand square feet or less of net new square footage.
B. The affordable housing commercial linkage fee shall not apply to projects that fall within one or more of the following categories:
1. Schools, places of public assembly, recreational facilities, hospitals, cultural institutions, childcare facilities, nursing homes, rest homes, residential care facilities, and skilled nursing facilities.
2. Development projects located on property owned by the state of California, the United States of America, or any of its agencies and used exclusively for governmental or educational purposes.
3. Any structure proposed to repair or replace a building that was damaged or destroyed by fire or other calamity, so long as the square footage and use of the building remains the same, and construction of the replacement building begins within one year of the damage’s occurrence.
4. Development projects on property eligible for the California property tax welfare exemption that is (a) used exclusively for charitable purposes and (b) owned or held in trust by a nonprofit corporation operating for charitable purposes with a current tax-exempt letter from the Internal Revenue Service or the Franchise Tax Board. (Ord. 606 § 2 (part), 2016)
17.88.050 Alternatives to payment of affordable housing commercial linkage fee.
As an alternative to payment of the commercial linkage fee, a developer may request to mitigate the housing impacts through construction of affordable residential units on an appropriate housing site, the dedication of land for affordable housing or the provision of other resources to provide affordable housing. The city council may approve this request if the proposed alternative furthers affordable housing opportunities in the city at least equal to the payment of the commercial linkage fee. A developer requesting an alternative must do so at the time the original application is filed; requests made after the application is filed will not be considered. (Ord. 606 § 2 (part), 2016)
17.88.060 Affordable housing fund.
A. All affordable housing commercial linkage fees or other funds collected under this chapter shall be deposited into the city’s affordable housing fund.
B. The monies in the affordable housing fund and all earnings from investment of the monies in the fund shall be expended exclusively to provide housing affordable to very low income, lower income, and moderate income households in the city, consistent with the goals and policies contained in the city’s housing element and the purposes for which the fees were collected, and for administration and compliance monitoring of the affordable housing program.
C. The city council may, from time to time, adopt guidelines for expenditure of monies in the affordable housing fund. (Ord. 606 § 2 (part), 2016)
17.88.070 Waiver.
A. As part of an application for the first approval of a commercial development project, a developer may request that the requirements of this chapter be waived or modified by the decision-making body, based upon a showing that applying the requirements of this chapter would result in an unconstitutional taking of property or would result in any other unconstitutional result, or because there is no reasonable relationship between the impact of the development and the need for affordable housing.
1. Any request for a waiver or modification shall be submitted concurrently with the project application. The developer shall set forth in detail the factual and legal basis for the claim, including all supporting technical documentation.
2. Any request for a waiver or modification based on this section shall be reviewed and considered at the same time as the project application. The city council may, from time to time, establish by resolution a processing fee for review of any request for modification.
B. The waiver or modification may be approved only to the extent necessary to avoid an unconstitutional result, based upon legal advice provided by or at the behest of the city attorney, after adoption of written findings based on legal analysis and the evidence. If a waiver or modification is granted, any change in the project shall invalidate the waiver or modification, and a new application shall be required for a waiver or modification pursuant to this section. (Ord. 606 § 2 (part), 2016)
17.88.080 Enforcement.
A. Payment of the affordable housing commercial linkage fee is the obligation of the developer for a commercial development project. The city may institute any appropriate legal actions or proceedings necessary to ensure compliance herewith, including, but not limited to, actions to revoke, deny, or suspend any permit or development approval.
B. The city attorney shall be authorized to enforce the provisions of this chapter and all affordable housing agreements, regulatory agreements, and all other covenants or restrictions placed on affordable units, by civil action and any other proceeding or method permitted by law.
C. Failure of any official or agency to fulfill the requirements of this chapter shall not excuse any developer or owner from the requirements of this chapter. No permit, license, map, or other approval or entitlement for a commercial development shall be issued, including, without limitation, a final inspection or certificate of occupancy, until all applicable requirements of this chapter have been satisfied.
D. The remedies provided for in this section shall be cumulative and not exclusive and shall not preclude the city from any other remedy or relief to which it otherwise would be entitled under law or equity. (Ord. 606 § 2 (part), 2016)