March 04, 2026 Environmental Planning Commission Meeting

Video

Transcript

Segment 1

[00:02:08] Vice Chair Alex Nuñez: Good evening everyone. Welcome to the Environmental Planning Commission meeting of March 4th, 2026. I will call the meeting to order at 7:00 PM. For those joining us in Zoom, please note that due to our hybrid environment, audio and video presentations can no longer be shared from the lectern.

[00:02:31] Vice Chair Alex Nuñez: Request to show an audio or video presentation during a meeting should be directed to EPC@mountainview.gov by 4:30 PM on the meeting day. Additionally, due to our hybrid environment, we will no longer have speakers line up to speak on an item. Anyone wishing to address the EPC in person must complete a yellow speaker card.

[00:02:51] Vice Chair Alex Nuñez: Please indicate the name you would like to be called by when it is your turn to speak, and the item number on which you wish to speak. Please complete one yellow speaker card for each item on which you wish to speak and then turn them in to the EPC clerk as soon as possible but no later than the call for public comment on the item you are speaking on.

[00:03:07] Vice Chair Alex Nuñez: Instructions for addressing the commission virtually may be found on the posted agenda. Now I will ask the EPC clerk to proceed with roll call.

[00:03:16] City Clerk Heather Glaser: Commissioner Subramanian?

[00:03:20] Commissioner Shwetha Subramanian: Here.

[00:03:21] City Clerk Heather Glaser: Commissioner Pham?

[00:03:23] Commissioner Tina Pham: Here.

[00:03:24] City Clerk Heather Glaser: Commissioner Gutierrez?

[00:03:29] City Clerk Heather Glaser: Commissioner Dempsey?

[00:03:30] Commissioner Hank Dempsey: Here.

[00:03:31] City Clerk Heather Glaser: Commissioner Cranston?

[00:03:33] Commissioner Bill Cranston: Here.

[00:03:34] City Clerk Heather Glaser: Vice Chair O'Donahue?

[00:03:35] Commissioner Paul Donahue: Here.

[00:03:36] City Clerk Heather Glaser: Chair Nunez?

[00:03:37] Vice Chair Alex Nuñez: Present. Here.

[00:03:40] City Clerk Heather Glaser: All commissioners present with the exception of Commissioner Gutierrez who is absent.

[00:03:47] Vice Chair Alex Nuñez: Thank you Mr. Clerk. Okay, we will move on to item number three, minutes approval of which there is none. So we will then proceed to item number four, oral communications. This portion of the meeting is reserved for persons wishing to address the EPC on any matter not on the agenda.

[00:04:04] Vice Chair Alex Nuñez: Speakers are allowed to speak on any topic for up to three minutes during this section. State law prohibits the commission from acting on non-agenda items. If anyone in attendance would like to provide comments on non-agenda items, please fill out a yellow speaker card and provide it to the EPC clerk.

[00:04:18] Vice Chair Alex Nuñez: If anyone on Zoom would like to provide a comment on non-agenda items, please click the raise hand button in Zoom or press star nine on your phone. Phone users can mute and unmute themselves with star six. Mr. Clerk, do we have any speakers?

[00:04:33] City Clerk Heather Glaser: There are none in person and none on Zoom.

[00:04:38] Vice Chair Alex Nuñez: Okay. Alright, seeing as how there are no speakers, we will proceed to item five, public hearing with 5.1 Below Market Rate Housing Program zoning code updates being the agenda item for the night. We will first have a staff presentation, then questions by the EPC, followed by public comment.

[00:05:00] Vice Chair Alex Nuñez: At the closure of public comment, the commission will then deliberate and take action. So we'll begin with a staff presentation from our housing specialist Anna Reynoso and affordable housing manager Julie Bernard. Thank you.

[00:05:11] Anna Reynoso: Good evening Chair and Commissioners. My name is Anna Reynoso and I'm a housing specialist here at the city. This evening I am accompanied by affordable housing manager Julie Bernard and housing director Wayne Chen. This evening we will be presenting on the ordinance amendments to the Below Market Rate Program, also referred to as BMR.

[00:05:32] Anna Reynoso: This evening's presentation will be divided into three main parts. We will provide some background which includes an overview of the current BMR program along with the BMR review process. The second part of the presentation is focused on the seven proposed amendments to the BMR ordinance. Finally, we will conclude with next steps.

[00:05:56] Anna Reynoso: The city's BMR program was originally adopted in 1999 and underwent its first major update in August of 2019. The BMR program refers to inclusionary units that are integrated within market-rate developments, not projects that are 100% affordable housing.

[00:06:12] Anna Reynoso: Some key components of the BMR program include any residential project that creates seven or more units must include on-site BMR units. Projects less than seven units are subject to a fractional in-lieu fee.

[00:06:28] Anna Reynoso: BMR units are set at different area median income, also known as AMI levels, and are required to be comparable to market-rate units in size, location, and design, and BMR units remain affordable in perpetuity. Under the program, developers may pursue an alternative means of compliance, also referred to as alternative compliance, in place of providing on-site BMR units.

[00:06:53] Anna Reynoso: For existing BMR tenants, the maximum allowable rent increase is capped at 3%. The city's housing element program 1.9 requires two reviews of the BMR program. The first review was completed in December 2023, consistent with the required deadline. The next review will be completed in 2028.

[00:07:15] Anna Reynoso: The December 2023 review included the five evaluation criteria in the housing element as outlined on the screen. The review concluded that the BMR program is effective in increasing the supply and diversity of affordable housing.

[00:07:30] Anna Reynoso: Council approved the recommendation to further study specific amendments based on the housing element criteria and bring back recommended amendments for additional discussion prior to the actual ordinance amendments. The ordinance amendments are implemented in a two-phase process.

[00:07:48] Anna Reynoso: Phase one of the ordinance modification process was completed in February 2025, where EPC and City Council held public hearings and approved the first set of BMR ordinance updates focused on criterion five clean-up items. Phase two took place in November of 2025.

[00:08:07] Anna Reynoso: City Council approved recommended amendments for the remaining housing element evaluation criteria based on the direction given in the December 2023 study session. The remaining seven amendments will be discussed in detail this evening.

[00:08:23] Anna Reynoso: The first amendment focuses on the second housing element evaluation criteria: improve physical accessibility of BMR units. After further study, it was found that approximately 13 to 18% of low-income households in California have a physical disability and that existing state and federal building codes already require extensive accessibility features in designated accessible units.

[00:08:51] Anna Reynoso: It was determined that adding local accessibility requirements beyond those standards is difficult due to need, cost, and limited administrative capacity. Developers indicated additional features would need to be optional and incentivized, though some developers voluntarily include adaptable units that can be modified later.

[00:09:12] Anna Reynoso: In November 2025, council supported staff's recommendation to require 15% of the BMR units or one unit minimum to be accessible. This approach improves access to BMR housing without imposing additional local requirements.

[00:09:30] Anna Reynoso: Amendment number two adds requirements that an applicant must meet if they propose alternative compliance rather than building integrated on-site BMR units. These changes provide greater clarity for applicants and require applicants to provide comprehensive information necessary to more effectively and efficiently review a development application for compliance with the BMR ordinance.

[00:09:59] Anna Reynoso: Based on council direction from the November 2025 meeting, the general requirements being made include keeping land dedication and off-site development of BMR units on the list of allowable alternative compliance options, adding acquisition preservation of existing housing units to the list of alternative compliance options.

[00:10:21] Anna Reynoso: Clarifying that alternative compliance applies to both rental and ownership projects. The value of an applicant's proposal be no less than the value of providing the units on-site. The applicant must contribute financial resources to facilitate the proposal. Providing city oversight if the applicant proposes a partnership with another entity.

[00:10:46] Anna Reynoso: And developers must submit a complete Below Market Rate Compliance Plan as part of their development application. Before reviewing the first compliance option, it's important to note that it incorporates lessons learned from previous city projects which helped to inform the development of these amendments.

[00:11:07] Anna Reynoso: Secondly, when evaluating a proposal, staff will use the in-lieu fee to measure equivalency between the alternative compliance option and providing on-site BMR units. The amendments to the alternative compliance approach addresses direction given by Council relating to housing element criteria three and four.

[00:11:30] Anna Reynoso: With land dedication, there are no proposed changes to the current requirement. The amendments include adding location requirements to integrate AFFH criteria, a feasibility and financing analysis which demonstrates the project's alignment with the in-lieu fee equivalency and identifies any additional developer contribution.

[00:11:50] Anna Reynoso: In addition, there is also a cost recovery fee based on the cost analysis of city resources and staff time the city undertakes in a land dedication which spans several years. The amendments relating to our second alternative compliance option, off-site development, have been informed by city projects such as 777 Middlefield and 685 East Middlefield.

[00:12:16] Anna Reynoso: For off-site development, the location requirements align with the updated standards discussed in land dedication. One of the new standards that has been added includes access to amenities.

[00:12:23] Anna Reynoso: That is, if the off-site development does not include equivalent amenities and it is within 750 feet of the primary project, the off-site residents must be granted access to shared amenities such as a pool or gym at the market-rate site. Currently off-site development includes a 20% requirement.

[00:12:45] Anna Reynoso: The amendment is reducing this to 15% to better align with the on-site BMR requirement. Currently, alternative compliance for off-site development does not include an affordability term. This amendment proposes aligning the term with our current BMR requirement of in perpetuity, except in cases where financing restrictions prevent it.

[00:13:16] Anna Reynoso: Often projects such as these involve multiple funding sources, each with its own requirements, so the amendment builds in flexibility to work with applicants. Most of these projects are undertaken by mission-driven developers who typically seek to maintain affordability well beyond 55 years.

[00:13:37] Anna Reynoso: Another new requirement is for the applicant to provide a feasibility and financing analysis. This analysis will give the city assurance that the alternative compliance aligns with the in-lieu fee equivalency, clarifies developer financial contribution, and confirms that no additional city funding is required.

[00:13:57] Anna Reynoso: In the situation where the applicant opts to partner with another entity for off-site development, the applicant would need to outline what the partnership may entail, any financial contributions they are providing, the terms being offered, and the process for the partner selection.

[00:14:16] Anna Reynoso: The city will have some level of oversight over the developer partnership to ensure the terms align with the program requirements. If the developer opts to secure a partner through an RFP, the city shall review the RFP to confirm compliance.

[00:14:32] Anna Reynoso: The amendments also revise the delivery timeline to include a provision that if the off-site development is not completed, the developer must comply with the 15% BMR objective standard. And now I will pass it on to affordable housing manager Julie Bernard who will present the remaining BMR ordinance amendments. Thank you Anna.

[00:14:52] Julie Bernard: Our third and final alternative compliance measure is acquisition and preservation. So the city does have one existing example that these measures have been modeled off of and that is 660 Mariposa. In order for an acquisition preservation project to be eligible, the acquired sites will need to be on a different site and also not subject to existing deed restrictions.

[00:15:17] Julie Bernard: The locational requirements align with the other two alternative compliance approaches with the addition of CSFRA units being eligible. A developer will need to demonstrate how they meet the rehabilitation and physical needs standards through providing an assessment of the existing conditions, the improvements that are required as well as those rehabilitation costs.

[00:15:45] Julie Bernard: The affordability levels must align with the BMR program. The acquisition preservation project must meet the same number of bedrooms that would have been provided on site, with the caveat that studios have a half unit value.

[00:16:06] Julie Bernard: Staff recognize that this might be challenging for a developer to secure a building that has an exact match of bedroom and unit sizes, and therefore will allow a developer to exceed the number of units that would have been required but at a 1.5 times threshold. So this will provide the program with flexibility while also balancing the unit sizes.

[00:16:33] Julie Bernard: The first four standards here align with those that were discussed in off-site development. So if the acquisition preservation project requires relocation assistance, the developer or the applicant must remain consistent with the city's TRAO provisions.

[00:16:52] Julie Bernard: Finally, both projects are to receive their certificate of occupancies concurrently. Council accepted all of staff's recommendations. For the third amendment, staff were instructed to review the in-lieu fee escalator index, which is currently CPI.

[00:17:11] Julie Bernard: Staff found that the California Construction Cost Index would be the better index and therefore recommend making this change. In doing our due diligence for the alternative compliance, we revisited the in-lieu fees and we have some updates.

[00:17:30] Julie Bernard: Although construction costs have increased, incomes which drive rents and sales prices have increased at a far greater rate over the past five years. So therefore you will notice that two of the fees have actually decreased.

[00:17:44] Julie Bernard: Conversely, non-rowhome and townhome ownership projects such as condos have seen construction costs increase faster than sales prices, which means that the gap between the construction cost and the revenue has increased and this results in a higher fee. So council accepted these recommendations.

[00:18:04] Julie Bernard: The fourth amendment addresses the remaining clean-up items that were not incorporated into the February 2025 update. These include clarifying the weighted average for the AMI limits and updating the administering department from CDD to Housing. Council has accepted these recommendations.

[00:18:27] Julie Bernard: The fifth amendment addresses the HOA reserve fund. Currently our ordinance requires that any developer that is providing units at 80% or below, establish a fund that would cover increases in HOA fees for households that may be experiencing financial hardship due to the fee increase.

[00:18:50] Julie Bernard: Since this was adopted by the city in 2019, the state has passed Assembly Bill 572 which restricts an HOA increase on deed-restricted ownership units to 5% plus CPI, capped at 10%.

[00:19:06] Julie Bernard: Additionally, staff have received feedback from developers that the HOA reserve fund impacts project feasibility for low-income homeownership units. Staff conducted an analysis and have found that AB 572 is generally sufficient to meet the intent of the HOA reserve fund and that the benefits of this fund do not offset project feasibility.

[00:19:33] Julie Bernard: So therefore staff recommend removing the program and council was supportive of this recommendation. Amendment number six, the graduated fee reduction. As mentioned earlier in the presentation, the BMR program allows projects up to six units to pay the in-lieu fee.

[00:19:56] Julie Bernard: Once a project reaches seven units, a full BMR unit must be delivered with the project. During the November 2025 council review, staff recommended incorporating a graduated fee reduction for small projects, meaning that the more units a developer builds, up to a maximum of six, the lower the per-unit fee.

[00:20:16] Julie Bernard: The intent of this initiative is to incentivize developers of small projects to maximize their development potential as well as to further housing element goal 2.2 which is the pilot ADU and SB 9 financial incentive program.

[00:20:31] Julie Bernard: The graduated fee reduction could maximize the use or maximize and incentivize the use of SB 9 and achieve incrementally more new housing supply than without the graduated fee. At the November 2025 City Council meeting, council passed a motion recommending that staff analyze two actions.

[00:20:56] Julie Bernard: The first action was to analyze adjusting the graduated fee reduction to work proportionally with the maximum number of units physically possible for a project. In order to determine how to calculate this, staff recommends using the base densities allowed under the general plan and zoning designations as well as the provisions of SB 684 to establish the maximum legally allowed density.

[00:21:26] Julie Bernard: The graduated fee reduction would then be scaled proportional to the number of units that are legally allowed. This approach retains the original intent of the greater the density, the lesser the fee, but then customizes the approach to site-specific densities. This table compares two scenarios.

[00:21:51] Julie Bernard: The first being a project with a legally allowable maximum density of six units and the second with four. As you see here, the graduated fee reduction scales accordingly with the number of units that could have been built.

[00:22:02] Julie Bernard: To illustrate, if a developer has a site with a maximum density of six units and opts to develop only four, they would be required to pay a fee of $8,855 per unit versus paying no fees if they were to maximize the density.

[00:22:22] Julie Bernard: The second action was to evaluate the feasibility of incorporating the graduated fee reduction with maximizing the development potential of small sites up to 10 units and return to council with options.

[00:22:37] Julie Bernard: Council directed staff to review projects of up to 10 units because there are state laws that allow by-right subdivisions of up to 10 units under SB 684. Staff conducted a preliminary evaluation and have determined that additional analysis is required.

[00:22:56] Julie Bernard: We propose doing this through the low and middle income homeownership strategy since projects of up to 10 units are often oriented towards ownership models and also to return with options during the 2028 BMR review.

[00:23:11] Julie Bernard: Our final amendment amends the ordinance to allow BMR program updates to the BMR program guidelines to occur administratively rather than requiring a council resolution as currently written. This is also consistent with other guidelines throughout the city. Council accepted this recommendation.

[00:23:35] Julie Bernard: As a reminder, these are the seven general topics that the EPC is considering this evening. EPC's recommendation will be presented in the ordinance's first and second readings in May and June respectively, and this results in an effective date of July 9th, 30 days following the second reading.

[00:24:04] Julie Bernard: You may notice that there's been adjustment in the council calendar since the original EPC report was published. So staff recommend that the EPC recommend council adopt an ordinance amending Chapter 36 of the Mountain View City Code as it relates to the BMR program amendments as discussed in this presentation, and also find that these code amendments are not subject to CEQA.

[00:24:30] Julie Bernard: So this concludes staff's presentation. We are available for questions and we can turn it back to the Chair.

[00:24:39] Vice Chair Alex Nuñez: Thank you. Alright, we'll take it to the commission for questions. Let's see if anyone wants to hop in the queue. Commissioner Dempsey.

[00:24:56] Commissioner Hank Dempsey: Thank you Chairman Nuñez. So a few questions, and this is getting back to one of my favorite topics, the density bonus law. I'm interested in how that interacts with some of the changes that we're making here.

[00:25:14] Commissioner Hank Dempsey: So let me just go through and hit a couple of these amendments kind of one by one. So under Amendment 1, if I understand it correctly, one of the changes that we're making is that a specified number of the units or a particular ratio of the units have to be disabled accessible in a way that regular units are not. Is that correct?

[00:25:33] Anna Reynoso: Yes, I believe it would be. But they would have to use one of their incentives or concessions. So they're usually limited depending on the project's provision of the BMR units, so we would require that they use one of their incentives and concessions rather than a waiver.

[00:25:53] Commissioner Hank Dempsey: Okay, and incentives and concessions are limited by number, waivers are unlimited? Remind me how it works.

[00:25:58] Anna Reynoso: Yeah, waivers are unlimited and then incentives and concessions are limited based on the number, like the proportion of their density bonus that they're required. It's like a sliding scale.

[00:26:21] Commissioner Hank Dempsey: How do you determine what is a waiver and what is a concession? Who decides that?

[00:26:30] Anna Reynoso: Great question. So a waiver and maybe I can also help the city attorney to assist, but a development waiver usually waives a development standard, so put simply, think of something that's like physically possible or impossible to build versus an incentive and a concession is more driven by your financing.

[00:26:58] Commissioner Hank Dempsey: Okay, so under Amendment 1 that could be a concession, if I were the developer. Okay. So for number two, similarly the requirement that an amenity has to be shared with an off-site, so if there's a swimming pool at site A and then the BMR gets put over to an off-site, could that, could the developer request as a concession that...?

[00:27:32] Anna Reynoso: No, because a developer couldn't use an alternative compliance and the density bonus. They have to be providing inclusionary units to provide their density bonus.

[00:27:44] Anna Reynoso: The intent of the alternative compliance is that they're not providing the units within the building, it's being removed and being delivered in a separate way to comply with the city ordinance, not a state ordinance, the state legislation.

[00:28:06] Commissioner Hank Dempsey: Okay, so the use of an amenity on-site by off-site BMR units, that's not waivable?

[00:28:14] Anna Reynoso: No, not under density bonus.

[00:28:17] Commissioner Hank Dempsey: Oh, okay good. Alright, that's good news. Similarly the perpetuity of the deed, that is waivable is it not? They could come in and say 'ah it's too expensive to have it be in perpetuity, we'll give you 55 years'.

[00:28:34] City Attorney Celena Chen: Commissioner Dempsey, I can jump in here. So the difference between concessions and incentives and waivers is that a waiver can be used when a development standard physically precludes development at the proposed density.

[00:28:52] City Attorney Celena Chen: So think of open space requirement, not specific to affordable housing, but an open space requirement or a setback requirement, something if they stuck to it they couldn't necessarily achieve the density that they are entitled to.

[00:29:09] City Attorney Celena Chen: Whereas an incentive or concession is a development standard that's reduced or not applied because of financial impacts to the affordable housing that's being provided.

[00:29:27] City Attorney Celena Chen: So if a developer comes in and, you know, they don't have to show a pro forma, but if they tell the city this requirement has direct financial impacts to our ability to provide affordable housing, then they're entitled to use their concession or incentive to change the development standard as it applies to that project.

[00:29:49] Commissioner Hank Dempsey: Okay. And I don't plan to belabor the point. I think it's just important that as we're going through and we're talking about how do we make the BMR ordinance better, I think it's important that we remember that these are increasingly advisory.

[00:30:04] Commissioner Hank Dempsey: And that we shouldn't necessarily expect that it'll happen in every case if we're doing something that we think is good, a developer could easily come through with density bonus law and say 'well that's kind of expensive, I don't want to do it', and then we have to say 'okay'.

[00:30:20] Commissioner Hank Dempsey: And that's just something I think is important to keep in mind as we take on some of these changes. The second question that I have is not on that, it's actually related to the last recommendation, the one that staff does not recommend we take, and it's switching in the code, it's the place that we were talking about putting it, I think in TRAO.

[00:30:39] Julie Bernard: Chapter 46.

[00:30:40] Commissioner Hank Dempsey: Yes, changing the chapters. The thing I was surprised by is there is no discussion really whatsoever as to why we don't think it's a good idea. That we say there are it could expose the city to potential challenges that would not arise if the BMR program remained in Chapter 36.

[00:30:59] Commissioner Hank Dempsey: There was no discussion in the memo that I recall, there was no discussion in the staff proposal. I just kind of want to nerd out a little bit on why we think that's not a good idea.

[00:31:13] Housing Director Wayne Chen: Good evening Commissioners, Wayne Chen, Housing Director. So we did conduct some analysis, we consulted with city attorney's office, and it was more of a risk prevention measure.

[00:31:26] Housing Director Wayne Chen: There's not a lot of examples of this where a city has moved it out or kept their BMR ordinance outside of the zoning code. Most cities have it within the zoning code. And it was more of a, if we moved it outside of the zoning code, would it expose the city to challenges to say we couldn't implement the provisions.

[00:31:52] Housing Director Wayne Chen: And so it was more along those lines. It wasn't too much more detailed than that, but part of the reason of moving it out into Chapter 46 was perhaps making it easier for developers to find all the relevant housing codes, but we can certainly achieve that by just pointing them to Chapter 36 and Chapter 46.

[00:32:14] Housing Director Wayne Chen: So that's primarily the reason to rather not expose us to a potential issue rather than move it for streamlining and consolidation purposes.

[00:32:25] Commissioner Hank Dempsey: Okay, so the intent originally was make it a little bit easier to navigate, but to the extent that it would raise a technical, potential for technical legal challenge because it got moved out of one chapter and into another, the risk wasn't worth the benefit.

[00:32:42] Housing Director Wayne Chen: Correct.

[00:32:43] Commissioner Hank Dempsey: Good enough for me. Thank you Chairman.

[00:32:46] Vice Chair Alex Nuñez: Thank you Commissioner Dempsey. Vice Chair Donahue.

[00:32:51] Commissioner Paul Donahue: Actually multiple of my questions were just asked. So but I do wonder, the accessible units, are they only available to people with physical disabilities or are they generally available to everyone?

[00:33:07] Julie Bernard: Oh, that's a great question. I think usually they would be available... it would depend on the applicant pool, and it's also not an exact science. It is sometimes hard to align a reasonable accommodation... right Anna? Anna's our expert at things like this.

[00:33:27] Julie Bernard: But they would be available to an interest list with a preference for those who have a need for the fully accessible unit.

[00:33:36] Commissioner Paul Donahue: I mean sometimes like if I go to a hotel, the last unit to be rented is the accessible room. But yeah, okay, I think I understand that makes sense.

[00:33:50] Commissioner Paul Donahue: Another question is this affordability being required in perpetuity unless a funding source requires otherwise, right? And it's a requirement, not a 'funding source says it only needs to be accessible for 55 years to get this funding', but if somebody... that's a floor, not a ceiling, and the city would require the ceiling, right?

[00:34:23] Julie Bernard: Right. So tax credits at the federal level I think are about 30 years with the state level being a minimum of 55. We obviously don't want to stand in the way of any... well it's not the tax credits necessarily themselves, it's the investors and the financers on the other side of those tax credits that may have different regulations.

[00:34:53] Julie Bernard: So our preference would be in perpetuity, but we wouldn't want to prohibit any developer from securing their financing. So we would just align with that knowing that 55 years is always going to be the floor.

[00:35:08] Julie Bernard: What happens is usually around 55 years or sooner, a developer will resyndicate their loan and come in, at that time we would extend it. So often fully affordable housing developments end up being affordable in perpetuity anyway because we just continue to extend the regulatory agreement with their financing.

[00:35:40] Commissioner Paul Donahue: Oh, so it's like you get a mortgage and you just refinance your mortgage and that kind of thing. And just keep the term keep going? 100% exactly. I see. Okay, that's all I have. Thanks.

[00:35:57] Vice Chair Alex Nuñez: Thank you. Commissioner Pham.

[00:36:00] Commissioner Tina Pham: I had a few questions. First question had to do with the alternative compliance measures. The ones that were listed to me are very different from each other: land dedication, off-site development, and acquisition and preservation of existing housing units.

[00:36:17] Commissioner Tina Pham: Does staff have a sense of what of the options would be more popular or likely to occur versus others? I know it's hard to know, but I was just trying to understand a little bit about the context of why these three were chosen and how likely they would be.

[00:36:37] Julie Bernard: I can take a shot at this. I can tell you the trends that we've seen in the past year or two is that we have seen two alternative compliance measures with off-site development, at least two projects. But in the past the city has received a few land dedications also.

[00:36:58] Julie Bernard: So introducing the acquisition preservation provides a path for developers to expand the portfolio of options, but so far those two have both been successfully used, with most recently two off-site developments being popular.

[00:37:20] Commissioner Tina Pham: Alright, thanks. I have a follow-up question. Kind of has to do with, I recall in November council had questions about timing of each of these alternative compliance measures because they're so different to me.

[00:37:33] Commissioner Tina Pham: I think the question was really valid, if you're working on your project and you're trying to also do some sort of means of alternative compliance, the timing may not work out completely and council had asked staff to figure out if there could be some variance or some administrative leniency. Was that considered?

[00:37:55] Julie Bernard: Yes, and I think we were also requested to do that through the administrative guidelines. So that will occur through the administrative guidelines and we agree as staff we wouldn't want to prohibit a good player or a developer that's showing good faith progress in their project, we wouldn't want to stand in the way of something like that getting developed.

[00:38:22] Julie Bernard: So yeah, it was a good suggestion.

[00:38:23] Commissioner Tina Pham: Okay great. My last question had to do with the BMR housing fund. It was good to get a description of that. I just want to get a sense of how much of the in-lieu fees that were mentioned go into that fund, how much that fund is, and how that funding is ultimately used by the city.

[00:38:42] Julie Bernard: Our in-lieu fee fund or are you talking about the HOA reserve fund?

[00:38:45] Commissioner Tina Pham: The BMR housing fund. I'm looking at the ordinance, I think it's section 36.40.40.

[00:38:53] Anna Reynoso: Right, okay. My sense is that all the funds go in there.

[00:38:57] Commissioner Tina Pham: Wait, are you asking about our fund balances or just like our general cash flow? Kind of both, just to get an idea of how much has gone into this fund over the years from the in-lieu fees and then how is it used.

[00:39:11] Julie Bernard: I don't... do we have the information on hand? Okay, if you'll give us a minute we'll look that up.

[00:39:25] Housing Director Wayne Chen: I can provide maybe just some high-level context for that, Wayne Chen, Housing Director. Over the past 10 years, I believe we've now added over a thousand affordable housing units, fully affordable to the city.

[00:39:41] Housing Director Wayne Chen: So we have about 1,700 units, and I believe we've provided about $150 million worth of funding which is a combination of BMR in-lieu fees which have been a primary source as well as our housing impact fees.

[00:40:00] Housing Director Wayne Chen: So I think as Ms. Bernard is looking up potential breakdowns, the number is quite high. It's, you know, tens of millions of dollars of BMR in-lieu fees that have been collected, leveraged for these thousand units.

[00:40:22] Commissioner Tina Pham: Thank you. The context is very helpful.

[00:40:26] Julie Bernard: So I actually do have a number for you. Since the BMR ordinance was program was implemented in 1999, the city's received $118 million in fees.

[00:40:45] Commissioner Tina Pham: Thank you. In general how are those fees used and what's the decision-making process behind that?

[00:40:50] Julie Bernard: Well our fees are used in a number of different ways. Most of it I'd say, the lion's share of it, is loans to developers for affordable housing projects. We do have other things that are drawn down from, like staff costs, we have other programs like some of our... what do you call it, I'm sorry I'm struggling with my words right now...

[00:41:16] Julie Bernard: other housing programs such as we're looking at the low and middle income homeownership strategy that we could potentially fund some of the acquisition preservation projects that we are implementing through... wait I think Wayne you may be able to speak to that $4 million that we had allocated towards acquisition preservation.

[00:41:42] Housing Director Wayne Chen: Sure. Ms. Bernard's right, the vast majority of the funding is for 100% fully affordable new construction projects. There has been a small allocation of $4 million for our community ownership action plan acquisition preservation fund and we're looking to potentially leverage the funding for more homeownership opportunities as well.

[00:42:14] Housing Director Wayne Chen: So mostly new construction, some acquisition preservation, some homeownership.

[00:42:24] Commissioner Tina Pham: Thank you. It's great to have the context of, you know, the size and scale of this program.

[00:42:35] Vice Chair Alex Nuñez: Alright, thanks. Commissioner Subramanian.

[00:42:39] Commissioner Shwetha Subramanian: Thank you Chair. Thanks to my colleagues for asking some of the questions, certainly helped to clarify it. I understand that at the directive of the Council, the intent is to remove the in-lieu fees going forward and to replace it with these other alternate compliance methodologies.

[00:42:59] Commissioner Shwetha Subramanian: So it's actually interesting to hear about the context of how much in-lieu fees has been drawn in over the years, and per my understanding, I understand that in combination with the impact fees that are drawn in go to serve the city's sources of providing gap financing for many affordable housing projects.

[00:43:24] Commissioner Shwetha Subramanian: So I'm a little struck by the fact that we are going forward and I wondered if there was a thought about how some of that financing which might have been received through in-lieu will be now offset through other sources. Maybe it's a question for Director Chen.

[00:43:50] Housing Director Wayne Chen: Yes, thank you very much for the question. There is certainly a trade-off. In part the BMR program is seen as an alternative mechanism for delivery of units without the city needing to be involved or the city needing to invest in it.

[00:44:07] Housing Director Wayne Chen: But yes, there is a trade-off and we've been very successful about using BMR fees over the years. We have been, through Ms. Bernard's work and staff's work of applying for external funding grant programs over the past several years and we've been quite successful at that.

[00:44:28] Housing Director Wayne Chen: We have some funding allocation for some recent ballot measures at the box, Measure P and Measure G and the housing department gets some allocation of that. And we continue to talk about external partnerships and funding partnerships as well.

[00:44:45] Housing Director Wayne Chen: So the hope is that we are still able to deliver 100% fully affordable projects that include some city financing and separately through a different mechanism to have affordable units delivered through the BMR program.

Segment 2

[00:45:00] Commissioner Shwetha Subramanian: ...about the in-lieu fees. Is there a comparison of how this compares with other jurisdiction or do you have an understanding of that? So there's a table in Table 5, there is a BMR in-lieu fee which lays it out for rental, ownership, and other ownership units.

Segment 1

[00:45:03] Commissioner Shwetha Subramanian: Thank you. So could you maybe just provide an explanation of what the calculation methodology is for the in-lieu fee? Because I read about the fee amount being a sum of or difference of the cost to develop the BMR and the economic value. What is the economic value of a BMR unit?

Segment 2

[00:45:28] Planning Manager Eric Anderson: Yes. So what Ms. Barnard was describing is what we've been calling the equivalency methodology which is to set the fee at a level that would be economically equivalent for the developer to provide the units as a way to help encourage the delivery of the units. Based on our landscape analysis of surrounding cities, most cities do have per square foot fees that are lower than that. The other cities do not use an equivalency methodology but rather some other methodology and usually they're set at levels that are often quite a bit lower than the actual cost of delivering the units. And the notion of having it be equivalent is that if we were to receive fees, we would be at a deficit to make up for that amount if the fees were not set at equivalency as well. So for that purpose and for the purpose of making the decision of whether to move forward with on-site or propose an alternative mitigation to make it a more neutral decision, that was the methodology that was taken back in 2019 which still applies.

Segment 1

[00:45:30] Julie Bernard: Do you mean the equivalency or the economic value? Could you maybe just elaborate on how the in-lieu fee is calculated?

[00:45:39] Julie Bernard: The in-lieu fee is really the delta between the revenue that a developer may receive after the unit is filled, they're getting rents or they've sold the property, versus the cost to construct.

[00:45:53] Julie Bernard: So let's say hypothetically the cost is $500 per square foot and that would equate to hypothetically $100 in revenue, the fee would be $400. So it's the delta between the revenue they would get and the cost.

[00:46:09] Julie Bernard: So the purpose of that is to assume that a developer is made whole that the fee itself isn't going to incentivize or disincentivize them from providing the units on site.

[00:46:26] Commissioner Shwetha Subramanian: And I think later on in the report you had a table, was it table five that lays out...

Segment 2

[00:46:46] Commissioner Shwetha Subramanian: And I guess by pegging it to the CCIs, it will continue to sort of keep up with market pricing.

[00:46:53] Planning Manager Eric Anderson: Yeah. It would be, we believe, a more reflective index based on what developers are actually facing.

[00:46:55] Planning Manager Eric Anderson: Right.

[00:46:56] Vice Chair Alex Nuñez: Okay. Cool. Um, and then next one. Um, for the AFFH. So I think the staff report or or the documentation mentioned that one of the criteria under which a alternate compliance or mitigation alternate compliance alternate compliance would be acceptable is if for example the site the land is in South of El Camino, right? That that's like a criteria for acceptance. Um, is there a kind of like inverse criteria where for example, I know not a lot of development happens in in South of El Camino, but let's just say for example, um, some large market rate project miraculously was going to happen in Waverly Park, um, where they couldn't say, well, we're going to do the alternate mitigation or we're going to deliver alternate compliance, but we're going to shuttle that over to Castro City. Does that make sense? So it's not that we put the alternate mitigation in in opportunity area, it's that we put, I don't know, maybe more units even but we like shuttled the opportunity out. Am I making sense?

[00:47:02] Commissioner Shwetha Subramanian: Thank you. Sorry. My next questions are on, you include a list of options for siting, both in a land dedication as well as an off-site or preservation strategy. I was wondering why you may not have included like a housing element site in the list apart from the other options. Would that make sense to include just so it also goes to fulfill our housing?

[00:47:33] Planning Manager Eric Anderson: Do you mean for the locational requirements?

[00:47:35] Commissioner Shwetha Subramanian: Yes.

[00:47:36] Planning Manager Eric Anderson: They may already be included in the general high opportunity areas and I can bring that up and you'll see.

[00:47:48] Commissioner Shwetha Subramanian: Yeah, I wasn't sure if the high opportunity areas always coincided with the housing element site inventory that we have.

[00:48:01] Planning Manager Eric Anderson: So I'm not exactly sure where all the housing element opportunity areas are, but I did want to show you the slide that reflects the HCD opportunity areas, high and highest resource areas which is essentially most of the city, almost all of the city apart from maybe one little parcel there. So really our AFFH requirements are very easily met.

[00:48:30] Commissioner Shwetha Subramanian: Yeah, that's helpful to know. So under land dedication, can you explain what happens to a dedicated parcel? Does the city take control of it and maintain it over time? And is the cost of the maintenance then calculated in that sort of financing that the developer provides and for what period of time is that envisioned?

[00:48:51] Planning Manager Eric Anderson: Um,

[00:48:55] Vice Chair Alex Nuñez: In a very clear sense I guess, can a developer build a market rate project in a high-income area and then satisfy the alternate mitigation by putting off-site units, their allotment of off-site units in a lower-income area?

[00:48:57] Planning Manager Eric Anderson: Right. Excellent question. So the land would be conveyed at some point in time that we would establish through the compliance plan. It's conveyed to the city. Depending on the parcel, I'm not entirely sure about what that maintenance might look like, but if an operator developer opts to give a land dedication, they also need to provide the city with the fee which currently is about $950,000 which covers the cost of the RFP process, the developer selection, the entitlement, how long we anticipate it takes them to get financing all the way through construction. So currently as it stands, we would receive a fee, the city takes title to the land while we secure a developer partner.

[00:49:11] Planning Manager Eric Anderson: As long they're meeting the the the AFFH high opportunity areas, as long as it was I think within half a mile of the other project, um, it's located south of El Camino which is also an HCD opportunity area, then yeah, they have the discretion to select a site that would be suitable for off-site development. They still have to be meeting the criteria that we have very thoroughly vetted that are AFFH compliant.

[00:49:39] Vice Chair Alex Nuñez: So if I'm hearing correctly, um, because I thought those were not ands but ors.

[00:49:46] Planning Manager Eric Anderson: Or should no, I think they should be and or. I mean, in in many cases it could be they could be meeting multiple of those AFFH requirements at the same time.

[00:49:51] Commissioner Shwetha Subramanian: I was wondering if there might it might make sense to have an option to do a conveyance to a community land trust which will also sort of help maintain the perpetuity of the affordability and maybe reduce some of like the carrying costs for the land and if that had been considered.

[00:49:55] Vice Chair Alex Nuñez: So they could meet just one criteria and that would be enough.

[00:49:58] Planning Manager Eric Anderson: That would be enough.

[00:50:00] Vice Chair Alex Nuñez: So then I guess that's kind of what I'm trying to get a sense of like um so then exclusion means denial. So for example, if I am saying, hey, I've want to build a project in a rich part of town, 100 units market rate, I have to do, I don't know, a 25 25 of those whatever have to be BMR, instead of putting them in the same building, I'm going to take those in I'm going to tell the city instead of giving me 25 BMR units, I'm going to give you 50, but all those 50 are in the poor area of town. Right? What how does that get handled in this um proposal?

[00:50:14] Planning Manager Eric Anderson: So I think what you are referring to would closely rather mirror an off-site development rather than a land dedication to the city. So that's a possibility through the other alternative compliance measure is to partner with a community land trust or another entity that could then build it and maintain it like you're mentioning.

[00:50:36] Commissioner Shwetha Subramanian: Okay. And next question. Under the preservation option, what exactly is meant by CFO for an existing property that you're trying to preserve?

[00:50:45] Planning Manager Eric Anderson: I don't um I don't know how to better answer your question other than if they're in the opportunity areas which the opportunity areas do take into consideration a number of different things. I think the socioeconomics status of the demographics in the area as well as like the access to amenities, access to transportation, access to Mountain View is very very fortunate in that almost the entire city is covered by the um high and highest resources. So um I don't I don't know if I have a better um description other than to say I don't know that there are any parts of the city that that are just a low income and poorly resourced.

[00:50:48] Planning Manager Eric Anderson: That would be your certificate of occupancy. So what that's really the end of the improvements, so tenants would move out, the improvements on site would occur and once our building department goes in and says, great, everything's good, that's your certificate of occupancy and tenants can move back in.

[00:51:10] Commissioner Shwetha Subramanian: So the reason I asked that question is I've seen opportunities where perhaps buildings are in a state of being able to be occupiable right away with the idea of going after financing sources that might be available in the future and having a phased improvement program to update the occupancy. So I was wondering if there was consideration for a more nuanced strategy such as that to be applicable without it being a day-one rehabilitation and improvement that needs to be done to an acquired property.

[00:51:54] Planning Manager Eric Anderson: I think I understand what you're saying. I think that would be something we would need to work with the applicant on through their proposal, through the compliance plan. We would want to make sure that they've gotten to a stage of completion within their project that we feel like they've satisfied their requirements or they're working in good faith to satisfy those requirements. But similarly with the as I mentioned earlier and as we discussed, we would want to not stand in their way of project completion but also make sure that it's getting completed. But we would work with them through their entitlement process on items like as such.

[00:52:15] Planning Manager Eric Anderson: Um, yes, yeah. Thanks for the question and thanks, Ms. Barnard. Yeah, I think what you're trying to get at is as currently written, there isn't something that says if you're building your underlying project south of El Camino, you actually need to also build your BMR units south of El Camino. As currently written, they could find an alternative site that is north of El Camino, but still in a high-resourced, you know, blue blue-colored census tract. Um, to Ms. Barnard's point, um, the city doesn't have low-resource areas. We have I think maybe just a couple that are sort of medium um overall. Uh we're we're pretty well resourced. So yes, as currently written, it doesn't it doesn't prevent the inverse situation of what you are talking about.

[00:52:33] Commissioner Shwetha Subramanian: So it's something that can be sort of described in the administrative guidelines which Commissioner Pham touched on earlier in terms of the time period.

[00:52:43] Planning Manager Eric Anderson: I think so.

[00:52:46] Commissioner Shwetha Subramanian: In Table 6, what was the fee what was the base fee based on for how that was calculated for like the single

[00:53:04] Planning Manager Eric Anderson: Table 6, the graduated fee reduction? Yeah. So we'd had to make some assumptions for illustrative examples and here we assumed a unit size of 2,000 square feet which was roughly the average size of the units when we receive fees.

[00:53:20] Commissioner Shwetha Subramanian: But is there a set in place fee per square foot?

[00:53:25] Planning Manager Eric Anderson: Yes. The table that I had up earlier with the in-lieu fee per square foot and then you times that by 2,000 square feet.

[00:53:38] Commissioner Shwetha Subramanian: Got it. You had said that staff is continuing to analyze the feasibility of looking at projects with 7 to 10 units. As part of that analysis, have you been able to analyze the number of parcels that fit into that 7 to 10 unit capacity range?

[00:53:42] Vice Chair Alex Nuñez: Okay. Because in our housing element on page 337, um, there's a housing sites by share of low and moderate income households and just to be quite honest and I don't know if my colleagues would agree but when I saw that um HCD opportunity map, I was like that seems complete and if I had a role in completely missing that when we were watching or going through the housing element process, then bad on me. But um, for example, like figure 99, figure 98, like I mean, that HCD map seemed extremely generous um and I think anyone who lives in our city would probably also find that to be very generous. And so um, I don't know to the extent that maybe there's a different mechanism that we can use or I don't know if the commission has the discretion to suggest, hey, um, instead of just going off of that map, also use, which I believe these are official maps, right? Like um with findings like figure 99 in the housing element or uh figure 98 or what have you, right? Like to really make sure that um at the end of the day we're not just allowing developers to you know meet in alternate compliance by just like exacerbating segregation is really the goal, right? Because we also have the AFFH um as a requirement and so yeah, I that yeah that does answer the question which is right now no and it but or yes but it would rely on that HCD map of opportunity areas. So okay. Cool.

[00:54:03] Planning Manager Eric Anderson: Yes, we did make a start. The data is incredibly difficult to get your hands around without like substantial review and data cleaning, for example, like let's say you pull a GIS data set, it includes a number of things that aren't parcels and that sort of thing. So that's why we needed additional time to review to at least evaluate the number of parcels that may be eligible for at the 7 to 10 parcel size or sorry project scale. I think we did take a look at the number of projects that the city has seen in that range and there's only about four since 2015.

[00:54:52] Commissioner Shwetha Subramanian: Okay. Well, I think it'd be helpful to have that data just so we could sort of also put in place the guidelines to address those sites quickly. Those were all my questions. Thank you.

[00:55:09] Vice Chair Alex Nuñez: Thank you. Commissioner Cranston.

[00:55:14] Commissioner Bill Cranston: Okay. First one wasn't a question before. Did you say that under the land dedication and off-site, the base project would not be eligible for density bonus?

[00:55:29] Planning Manager Eric Anderson: Yes. The purpose of the alternative compliance is if a developer does not want to provide the BMR units integrated into their market rate project, they can utilize the alternative compliance. So you wouldn't be doing both. You wouldn't have a density bonus and a alternative compliance measure at the same time.

[00:55:55] Commissioner Bill Cranston: So the hypotheticals that my colleague mentioned about these things going away wouldn't apply in those kind of situations because they wouldn't be density bonus eligible anyway.

[00:56:06] Planning Manager Eric Anderson: Correct.

[00:56:08] Commissioner Bill Cranston: Okay. That's interesting. Can you put the high resource thing back up there? I felt that was a you should include that in the in the documentation to provide to council because I felt like it was a big gap as I was looking at this. So I I kind of got the south of El Camino as the AFFH but is there any place that's not AFFH that's not high resource area? The reason I asked this, it felt like it was adding something into the criteria that was basically a double count and I kind of questioned something that specific including in there. So was the inclusion of South of El Camino specifically said, okay, because of the AFFH we have to do that and we said that in housing element? Because it looks like everything south of El Camino is in the highest or high except whatever that park is under the little blue spot.

[00:57:12] Planning Manager Eric Anderson: I can provide just a little bit of context too that South of El Camino is part of a another housing element program, I believe housing element program 2.6 which is related to affirmatively furthering fair housing. And one of the goals or objectives under that separate housing element program is to facilitate affordable housing development south of El Camino. So we thought this was a good opportunity to specifically connect that separate program opportunity to the alternative mitigations locational options there. And so yeah, I think the HCD opportunity area is broader. It does cover a lot of the areas and then pulling in South of El Camino was specific to another housing element program.

[00:58:13] Commissioner Bill Cranston: And the inclusion of the El Camino Precise Plan? Why was that?

[00:58:17] Planning Manager Eric Anderson: Yeah. That was as we were evaluating that separate program and in coordination with our planning colleagues that South of El Camino and El Camino, El Camino Real Precise Plan is a really key transit corridor and we thought it would be opportune to include South of El Camino and El Camino as part of opportunity areas for folks, especially as we're looking to do more sustainable transit-oriented development.

[00:58:46] Julie Bernard: And if I may add, the housing element program says South of El Camino, so a portion of El Camino Real Precise Plan does include the southern portion of the city below El Camino Real itself.

[00:59:05] Planning Manager Eric Anderson: Um, yes, it touches on part of actual South of El Camino, but then on the north side of El Camino is also part of the Precise Plan and that one was probably more along the lines of this is a really resource area because of the amenities and the transit infrastructure.

[00:59:31] Commissioner Bill Cranston: Okay. To be fair, I like the high resource area, just I it felt my I didn't go back into the into the whole housing element, but it felt like, damn, this covers pretty much everything, why is this other stuff here was kind of my reaction. And without a map to look at, it was kind of hard to do that. So I really recommend you include this in the council report because it's they may have the same question on it. The next question. So you've when you include when you do something that has a partner, does the city have a veto over the partner that's chosen?

[01:00:16] Planning Manager Eric Anderson: No. Um, we have the ability if they issue an RFP, to review the RFP, but we have no authority to prevent a partnership at the end of the day.

[01:00:32] Commissioner Bill Cranston: Is that a legal issue, City Attorney? Part of my question is there, I am familiar with projects up in San Francisco as well and there are below market rate housing developers who are basically crooks, okay, and have basically been banned from things by the city of San Francisco, and it would be I wouldn't want to have somebody come in and bring in a partner that we look at and says, well, these people are crooks, so we don't want them. It seems odd to me that we wouldn't have some ability to say, well, you know what, we're not approving them as a partner.

[01:01:21] City Attorney Jennifer Logue: Good evening. Can everybody hear me? This is Jennifer Logue, City Attorney.

[01:01:23] Planning Manager Eric Anderson: Yes, we can hear you, Jennifer.

[01:01:28] City Attorney Jennifer Logue: Excellent. So, the question you're asking is a complex question. I think it would depend on the city's role in the project. If you are talking about a strictly private development project and they wanted to work with a partner, I don't think the city would have any authority to prevent a particular partnership. If the city was providing some sort of funding for it, if it was affordable 100% affordable housing or something like that, the city obviously has more of a role in that kind of development project, but if we're talking about a strictly private development project, I'm not aware of any authority the city would have to prevent a particular partnership.

[01:02:13] Commissioner Bill Cranston: Clarifying question. So if this is moved, so the move to make this administrative is not changing regulations. This is I thought we this is something that we would still ultimately have to approve. So it's there is a discretionary component of this the city is taking on by allowing the off-site compliance option that we would be able to review. And so it's we could choose not to approve that option if they bring in somebody that doesn't look like they're going to be a good partner. Wouldn't we? Because we're granting this as an alternative and then we could just say, no, we're not going to accept this alternative. Couldn't we?

[01:03:30] City Attorney Jennifer Logue: Yes, I believe the city has the discretion to reject the alternative compliance proposal. But that's not, I mean, I guess the question was can we reject their proposed partnership. I think the yes, the city could reject the alternative compliance proposal if we didn't like the partnership, I suppose. But that's sort of an end-run around the question. We're not we can't just say you can't partner with that person. But we could reject the alternative compliance proposal.

[01:04:21] Commissioner Bill Cranston: So that's okay, so yes we could do that. If we included that as a component of the plan. Right now it's not a component of the plan.

[01:04:29] City Attorney Jennifer Logue: To the extent that we have reserved full discretionary authority to accept or reject an alternative compliance proposal, but to the extent that it is objective criteria and we've laid it out and said if you meet, you know, 1, 2, and 3, then the alternative proposal shall be, you know, accepted or approved, then we would, you know, we are depriving ourselves of discretion. But if we have reserved full discretion, then yes, we could reject the proposal because we didn't like the partnership.

[01:05:21] Commissioner Bill Cranston: Do we have that right now or do we have to change it to do that? As proposed, do we have that full discretion?

[01:05:29] City Attorney Jennifer Logue: I will I have to defer to staff. I have not, I don't recall.

[01:05:36] Planning Manager Eric Anderson: Um, so under the current program, it is set up to be discretionary. The intent of these modifications and clarifying the requirements is to make it more by-right, but there's more information that needs to be filled out. What I wonder as a way to kind of respond to this inquiry, perhaps maybe a recommendation by the EPC would be to maybe add a provision under the partnership that they would need to demonstrate that the partnership or the partner is a qualified developer or some such and, you know, we have some framework around that. But perhaps adding that type of provision would give us more ability to have oversight and determine whether the partnership is qualified.

[01:06:54] Commissioner Bill Cranston: Okay. I have to think about how to word that because I I understand what you're saying. I'm just if somebody's been charges have been filed and there's a court case in another jurisdiction for somebody, I would be reluctant to adopt that partner in Mountain View when they're under a something of litigation. So I'll try to word my recommendation later. I'll think about how to do that. The something that was in the part of the response to my other colleagues was on the timing of things. So I understood the timing for off-site development, but on the land dedication, is there any requirement that something's built and put in place at the same time as the other project or is it just here's the land and you can and then there's no timing associated with it?

[01:07:31] Planning Manager Eric Anderson: There's no timing component for the completion of construction. There would be a timing component for the conveyance of the land and I would imagine that that would be at a maximum once they start construction on or once they pull their building permit for their underlying site.

[01:08:34] Commissioner Bill Cranston: Okay. So maybe the Director knows this, but what's the typical time from when we have land until we actually find a partner, go out there, put a put something in place and we actually have something built? I mean, I've seen we have stuff that I know we've approved it's still sitting there as vacant lots multiple years later and it seems like on land dedication it could be a really long time before something is actually turned into units.

[01:08:45] Planning Manager Eric Anderson: Um, yes, thank you. That's right. We have two examples right now. We have Lot 12 across the street which took several years to have the developer get all of its financing. Construction's about to start any moment now, so we're really excited about that. We have another project that is 87 East Evelyn and that is occurring at a much faster rate. It is taken about three three and a half years, but that's pretty quick. But typically when we have a land dedication, it takes us a process to go to council to determine priorities for the site, that's one process. Then we would issue a request for qualifications, request for proposals process. That can take it can take 9 to 12 months and we've tried to identify ways of streamlining it. And then once the developer is selected, then they have to go through their process of entitlement and pulling their funding together. And so that is one of the main reasons why BMR on-site is so desirable. But in this option, it would take usually three to five years to have a project get off the ground.

[01:10:36] Commissioner Bill Cranston: Okay. And in that calculation of the carrying cost, are you looking are you assuming that five years that we're sitting here on that land until something happens?

[01:10:46] Planning Manager Eric Anderson: We believe we've estimated a five to seven year amount of time where staff has to actively either drive the project or manage the project or fully initiate the RFQ/RFP process all the way through the construction financing and construction completion.

[01:11:51] Commissioner Bill Cranston: Okay. Next one. Walk through how what would work with a CSFRA unit. I read through this multiple times and I came away thinking, okay, so we've got a brand new building on an empty lot and they're going to basically buy something that's a CSFRA unit and we're not actually getting any more units. We're going from new units and BMR units versus something and CSFRA units and I my colleague here may know more than me as to the equivalent value of a CSFRA unit versus a BMR unit, but it did I came away thinking, well, do we actually get anything more if we do that? So how does how do we actually get more units if they choose a CSFRA location that they're going to acquire?

[01:13:31] Planning Manager Eric Anderson: Um, yes. So I think Council was interested in adding this third option because of the success of 660 Mariposa. That was delivered by Prometheus in satisfaction of their BMR requirements at the Tillery which was on Villa Street. I think the other interest that the Council had was separately we have a tenant displacement response strategy which has an acquisition-preservation component. So um there was a overlap of of goals as well to first there was a 660 Mariposa project and second there's an overall acquisition-preservation desire to preserve and not have existing naturally affordable housing get lost. And so part of the modification of the alternative compliance is that we couldn't necessarily require a greater benefit, but the benefit needs to be no less than the than the on-site units. So if a developer acquired a building that maybe provided more units just because that was maybe a building that was available at the time, that might be one way and it made sense for the developer to pencil that project. But but otherwise we wouldn't require say more acquisition-preservation units than what would have been required on-site for the BMR units. But it couldn't be less. There is a requirement to have the developer do a physical needs assessment, make appropriate upgrades as needed, so that will help at least bring various amenities and features of the units to modernize it but and making them as as desirable as possible and kind of close the gap between a new unit versus a renovated unit.

[01:15:25] Commissioner Bill Cranston: Okay. I'm familiar with I was involved in the original proposal on that one, the Prometheus. I thought the thought was basically almost ready to be condemned, that it had substantial violations and it was they either needed to tear it down and rebuild it or something. So it was I quite frankly it may have been classified as a CSFRA unit, but I my recollection was that it was basically not valuable at all as it was.

[01:15:59] Planning Manager Eric Anderson: Um, yeah. At the 660 Mariposa project. Yeah, we had toured the site, you know, it was an older building, that that part is true, but there were tenants already living in it. It remained a an ongoing concern and ongoing operating project. Um, there was some temporary tenant relocation to make some extensive modifications and bring everything up up up to speed. Um, but we're yeah, I don't recall anything about the project that CSFRA building having sort of habitability issues. There were tenants there. Um, now all the units have been modernized. Um, and in fact in this particular situation, um, it was originally 48 units. They did convert I think like the sauna room and another room and added two units to make it 50 units on site. Um, yeah, so they did actually add and create two additional units.

[01:17:51] Commissioner Bill Cranston: So I guess what it the shorter answer short version of the answer to my question is if they take that approach, we may actually get no more units if you view CSFRA units and BMR units as equivalent and I'll defer to my colleague on that. But we could end up with nothing more than what we have right now if we treat those as the same.

[01:18:21] Planning Manager Eric Anderson: Yeah. It doesn't add to the overall city's housing stock probably. It it converts a portion of unrestricted housing to restricted housing. Um, and and then it's it's preserving those units so they don't get lost. Um, those are probably some of the main policy goals for adding this to the list of many options.

[01:19:21] Commissioner Bill Cranston: Okay. That's my questions.

[01:19:25] Vice Chair Alex Nuñez: Commissioner Subramanian, yeah, would you like to

[01:19:29] Commissioner Shwetha Subramanian: Thank you, Chair. I had one more clarifying question. So in sort of listening to this discussion and thinking about the alternate compliance strategies, I just want to repeat so I understand this clearly. Is it correct to say that you are using the in-lieu fee calibration to come up with what the costs would be in these alternate compliance strategies?

[01:19:56] Planning Manager Eric Anderson: Yes, that's correct.

[01:19:58] Commissioner Shwetha Subramanian: So I understand that there are state laws that prevent you from charging more for off-site units and basically it has to be equivalent to on-site units. But it does strike me that in each of these scenarios, there's a slightly different cost factor depending on time and, you know, maybe the state of prevailing conditions. So is there a way to maybe create a prioritization of the between the three strategies to say this one first, if not this, or if not this? Because it does seem like if the goal is to create BMR units faster without having the option to do them on-site, would it be fair to say that maybe doing preservation of existing housing that's at the affordable realm or creating off-site units but building them faster is the way to deliver it? Because it does strike me that using the same equivalency for a land contribution does not necessarily guarantee the production of BMR units anytime soon and if we're applying the same in-lieu fee factor, may not even be bridging the costs to create those units in a timely manner.

[01:22:10] Planning Manager Eric Anderson: I think I understand your question, but to sort of repeat it back to you, what I'm hearing is you're asking about whether or not we could create a priority order in terms across the three alternative compliance. Um, I may lean on the city attorney just to verify, but these alternative compliance measures are in response to I think it's AB 1505 where we have to provide some alternative means of compliance to a BMR program. Um, it's a minimum of two. We're providing options for three to maximize flexibility. I don't know whether or not we have the ability within that to provide a prioritized list or what Council's appetite for that is. That's not something we had actually contemplated. So um I'll pause there in case the city attorney has any conflicting opinions on on that.

[01:23:50] City Attorney Jennifer Logue: I we would have to look that up. I don't know off the top of my head. I was trying to quickly um get an answer to that, but if if that's something you are interested in us exploring, we could certainly do so, but I'm sorry this evening I don't have a direct answer to that question.

[01:24:09] Commissioner Shwetha Subramanian: Okay. Thank you. I think it would be something worth exploring just to make sure that we are aligned with the ultimate goal of creating BMR units faster and in a timely manner.

[01:24:25] Vice Chair Alex Nuñez: All right. Um, I have a few questions. I'll try to ask the simpler ones or the more direct ones first. Um, without needing to hear too much unless um, staff feels like there's a need for it. I guess I'm just curious to what extent if it's either just yes or no, great, um, but um, to what extent when these changes were being looked at, were we just kind of checking with the TRAYO making sure it was like compatible and um, no kind of inconsistencies? I'm sure that's part of the process, I just want to make sure if that's the case just to get assurance. Right. Like there's elements of like TRAYO and BMR are both policies meant to address and support low, moderate income residencies in our city. So um, given that, like um, there's a relationship there, I guess I'm just curious to what extent staff explored that relationship as part of this. Maybe it's a more abstract question than I expected, but I'd definitely like to get assurance.

[01:26:24] Planning Manager Eric Anderson: Well, I think the the biggest overlap when it comes to the TRAYO and the BMR program um relates to the acquisition-preservation alternative compliance. If there are existing tenants that need to be relocated, they would need to comply with our TRAYO.

[01:26:39] Vice Chair Alex Nuñez: So for example, um, in a scenario where a developer says, yeah, we're going to do a total preservation of residencies and rehabilitation for some other derelict building or what have you, um, is there a mechanism like for example, right? So you can imagine other similar scenarios but related. Is there some mechanism where for example, the city is checking to make sure that as part of that process, um, those active residents are in fact being for example given temporary housing, um, that they are um, you know, it's being done so within a reasonable distance, right? Like is there some kind of like effectuating relationship between the two that was assessed just to make sure that both kind of hold up?

[01:27:29] Planning Manager Eric Anderson: Um, yes. We did do some analysis and then in table 4, there's a reference to relocation assistance and first right to return and it references needing to be consistent with the TRAYO.

[01:27:43] Vice Chair Alex Nuñez: Thank you very much. I appreciate that. Um, other one. Um, so if I'm reading it correctly, um, the on-site integrated BMR contributions have to build have to be built concurrently with the rest of the units being delivered. Um, is my reading of it? Um, I guess like I just want to make sure because I think some of my colleagues kind of touched on this through the questioning, but excuse me if it just wasn't as clear in my brain. But I guess like yes or no, is there a mechanism to enforce, for example, an off-site scenario where I don't know, or recoup even, for example, if like developer builds their shiny all market rate project over here and then said, hey, yeah, you know, during the approval process, they were like, hey, yeah, we totally commit, we're going to build this BMR building somewhere else and it's going to have more units and it's going to be the best BMR in the city, and then 5, 10 years later nothing's there, is there some mechanism for controlling can I just hear that just really clearly one more time just to get a sense?

[01:29:38] Planning Manager Eric Anderson: Yes. So we do have a little bit of discretion to move the timeline, but as it's written, um, if they are not able to deliver the off-site units, they would have to integrate those into the building that they've just built.

[01:29:56] Vice Chair Alex Nuñez: Okay. Sorry. Thank you. That was helpful. And is there, just to be clear, there's a time frame on that? Or it's not as prescribed or

Segment 3

[01:30:00] Vice Chair Alex Nuñez: integration required, yep, that one got covered. Off-site tenure, phasing, and amenity. Okay. Last one, I think this one should be pretty simple. Just amenities, is there some kind of like indication of in terms of the equivalency, kind of like the amenities available to residents within the like off-site scenario?

Segment 2

[01:30:04] Planning Manager Eric Anderson: So um so there is. Um, in an ideal world, they would be receiving their certificate of occupancies at the same time. So both buildings are ready to go, they're built, ready for occupancy at the same time. Um, there was a motion made at Council, um, that through the administrative guidelines, staff would have the discretion to adjust that somewhat if we see that the developers are both working in good faith. Like we don't want to get in the way of of a good thing, um, but we do have the discretion um if there's been no progress on the off-site development to say, no, sorry, you need to comply with our on-site requirement.

Segment 3

[01:30:28] Housing Director Wayne Chen: I think that would just entirely depend on the amenities that the market-rate developer is opting to provide.

[01:30:38] Vice Chair Alex Nuñez: Okay. All right. Perfect. So they're tied to the market rate and then equivalency, which is perfect. Thank you so much. Those were my questions. I guess we will be then unless there's questions hanging for the Commission, any colleagues have any other questions? No. All right. This is the best part of each item, the public comment. If anyone in attendance would like to provide comments on the item, please fill out a yellow speaker card and provide it to the EPC clerk. If anyone on Zoom would like to provide comment on this item, please click the raise hand button in Zoom or press star nine on your phone. Phone users can mute and unmute themselves with star six. So I'll look to our Commission clerk. Are there any speakers having submitted yellow cards or on Zoom?

Segment 2

[01:30:39] Vice Chair Alex Nuñez: Sounds good. Um, next question. When it comes to the off-site as well, um, if a and again, if these are, you know, clear questions, apologies in advance, but um, if a developer constructs a market-rate condo building or ownership project, the off-site that has to be also a similar like it would have to be ownership BMR ownership, it can't they couldn't just say, okay, well we're going to do rental, right?

Segment 3

[01:31:38] Public Speaker Ben Tingleberg: Hi there. My name is Ben Tingleberg. I was a long-term resident of Mountain View. My mother taught at Bubb Elementary for many years, and we could not afford to live here eventually and had to move out, which means I fully understand the housing crisis that Mountain View finds themselves in. But I'm actually here as a homebuilder, which is my profession now. And I've done projects in 15 different jurisdictions across the state, none with the fee burden as high as the City of Mountain View, which in reality for the project sizes that I do under 10 units, just gets passed on to the housing cost. So in the case that we want to build middle-class units, the fee burden in Mountain View tends to be around $350,000 per unit, not just the affordable units, but including parks fees and those are the two largest ones. And the way I see it is that that makes middle-class units impossible to build in Mountain View because you must find a project that can support a luxury development which can subsidize the BMR requirements, but there's no world for a middle-income unit because you're adding $350,000 to every single unit that's built in the City of Mountain View. So I would say when you're considering these fees, particularly it was mentioned that the $118 fee reduction, which is great, it's great that it's being reduced, I think it'll increase housing production. But on a modest-sized unit 1,200 square feet, that's going to be $150,000 in fees to the BMR requirement. And what that does is it limits the developer's opportunity to deliver middle-income units. And you know, that's putting a lot of faith into developers necessarily to do that. But the laws that I'm interested in using in Mountain View in particular are the Starter Home Revitalization Act, which was SB 684, it was mentioned, which incentivizes developers to build smaller units that are more naturally affordable. And when you add on the fee burden in Mountain View, those projects still become something where you have to build a luxury unit and then a smaller BMR unit to somehow make that work. And I've looked at lots of sites, I really do want to build here, but I've not found a way to make it work because the fees here are much higher than everywhere else. And I understand that there's an equivalency to delivering the unit, but I would say I would urge you to understand that these fees cause units not to be produced. And so there is like a hidden number of units that were never produced in Mountain View exacerbating housing by lowering supply because they never happened because the fees were so, so, so high in this city. And so when evaluating fees in general, I would urge you to look at positive ways to increase BMR production. My background, I believe- no one in my family owns housing. I'm not a very rich developer. So we would love the affordable units, but we would want them to become financially viable so that we can create a lot more of them through positive, not negative mechanisms. Thank you.

[01:35:13] Public Speaker Andre Lindy: So just to go off what the previous person said, you can't build here. You look at San Jose, Mayor Matt Mahan asked how many people or how many builders units were produced when they had that requirement there, and zero were built. And why? Because they're not affordable. Builders go in and they look at it and they say, "Can I make money here? No, I can't." So I'm not going to build here. So then what happens? People like me that want to come and move to Mountain View, they look for townhouses, they look for houses. I went and looked at a house the other day. It was a teardown, you could not live in it. There were water stains in the roofs, there were holes in the foundation. How much did that cost? $1.8 million. Who's going to pay $1.8 million to live in a house you can't live in? And then let's look at townhouses. There are three townhouses that are about a million dollars and those are two-bedroom, two-bath. How's a family going to live in that if you have maybe two kids, right? Are you going to live in a two-bedroom, two-bath townhouse? No, you're not. If you want to go to a three-bedroom townhouse, how much is that going to be? At least $1.3, $1.4 million. So cities run off revenue, right? Cities run off people going in and going into stores, going into businesses, kids going into these schools. What happens when you make it so people cannot live in your city? People don't pay revenue, people don't pay taxes. The city dies because you have made your city unaffordable. So by what the previous person has said right here, if you are making it difficult for builders to come in and actually support the middle class, who's going to move into your city? Is it going to be a software engineer that's probably making $500, $600,000? Yes. Is someone who's probably working at a school, working at a restaurant, are they moving into your city? No. They just can't afford to live here. So then they have to go to Mountain House, they have to go to Tracy, and they have to commute probably an hour and a half each way. So what I am saying, not as a builder because I'm not a builder, I'm just someone who wants to live in your city, you need to make it more affordable for us to live here. If you don't make it more affordable for us to live here, nobody's going to live here and you're not going to get tax money. That's what I have to say, thanks.

[01:37:58] Public Speaker Jonathan: Good evening, everyone. Thank you for the opportunity to speak. My name is Jonathan. I'm here speaking on the perspective of a small-scale developer who builds in Silicon Valley and also looking at opportunities to build here in Mountain View. We do believe there are a lot of great opportunities to build small-scale infill housing here, but also do have concerns over some of the policy and the language in the BMR housing ordinance. As far as the amendments being proposed, I think one of the comments I had would be really wanted to see if you guys would strongly consider adjusting the graduated fee reduction to apply from one to six to actually one to 10 units. One of the reasons being, one of the bills we're looking at, Senate Bill 684 and its sister bill Senate Bill 1123, ministerial lot subdivisions, they apply for sites half an acre or less and allow you to build up to 10 units. So I'm not sure where the six-unit cutoff, you know, came from, but I think it could be reasonable to consider that adjustment. So that would be one of the policy things that I identified. And furthermore, not being proposed as this amendment, but just in the code that something I found a little bit different than some of the neighboring jurisdictions and a little bit unusual is how specifically row and townhomes are being targeted and treated a little bit differently as far as the requirement. So they're being- we're being asked to provide 10% more than the standard project. So curious to understand like what went into that. And for example, if we were to propose an eight-unit for-sale townhouse project, we would have to designate two of those units as below market rate. So given how challenging these smaller projects are from a financial perspective, I think it would be worth considering maybe lowering that back down to 15% across the board. As like I've said, we really haven't seen that too often in some of the other jurisdictions here in Silicon Valley. But overall, another point I wanted to cover is the concurrent development of on-site BMR with smaller projects. Construction staging and logistics is always challenging, so sometimes the BMR unit is in the later perhaps phase of the project. So some flexibility around that would be appreciated. I do understand that it's always best to deliver all the units all at once to have an equal opportunity for it to go to market or things to be worked on. But I think these are the three things that I really wanted to bring to your attention today and I just appreciate the opportunity to speak and all the work that you guys are doing to make these ordinances and the city overall a better place. So, yeah, thank you so much.

[01:40:39] Vice Chair Alex Nuñez: Thank you very much. Mr. Clerk, do we have any other speakers queued up or on Zoom? No other speakers. Okay. And our other person didn't return. Okay. We're going to take it to the Commission for deliberation and action. If I could ask Commissioner Cranston, I just want to check, I presume we're going to be hearing about the proposed addition that you were considering at some point. So I don't know if you had just clear language worked out so we can all just kind of have that in mind as we begin deliberation.

[01:41:05] Commissioner Bill Cranston: Am I on here? I guess I would- my recommended change would be that the city ultimately has final approval on the alternatives being proposed for the land dedication and off-site development. And it's through a review that the city makes the final decision. I'm not necessarily suggesting that it's specific to the partner that's chosen, but it should be clear that ultimately the acceptance of the alternative is the city's decision. It's not something that's purely a recommendation, and I would recommend that change to the language.

[01:42:12] Vice Chair Alex Nuñez: All right, thank you. Can we let's see, anyone wants to line up in the queue? It could be you again, Commissioner Cranston, if you want, but anyone else, feel free, let's we can jump in for discussion. I just want to make sure we all had that like top of mind before rounding, if it was going to come up eventually. Commissioner Dempsey.

[01:42:14] Commissioner Hank Dempsey: Thank you, Mr. Chair. Just since we're doing deliberation on Commissioner Cranston's point, I wanted to ask City Attorney, are there any objective criteria that would need to go along with the Commissioner's proposal to effectuate it? Or do you have everything you need to write that? And there's no potential red flags you see in how it was laid out?

[01:42:42] City Attorney Jennifer Logue: Thank you, Jennifer Logue, City Attorney. I actually raised my hand because I wanted to get a little bit more clarification. I did have an opportunity to pull up the statute, just in looking at the question related to whether or not we could prioritize. And the state law is pretty crystal clear that the ordinance shall provide alternative means of compliance. And so I'm not quite sure when you- when you say that we have ultimate authority, I'm not sure that we have the authority to reject a proposal, an alternative means of compliance. The ordinance has to contain these alternative means and they become valueless if the city could just say, "We don't want it." Right? So if we have to provide them, if we have to provide alternative means of compliance, which state law is crystal clear, there has to be some objectivity to this. Because, you know, providing alternative means that we could for whatever reason we decide reject is not providing alternative means at all, really. So I think I need more clarification. We have an obligation under state law to provide alternative means of compliance.

[01:44:19] Commissioner Bill Cranston: So I guess my thinking is we do have two. Okay? The on-site but separate is still there. That doesn't go away. The land dedication is there and that doesn't go away. This applies to the third option. So if that- if what they propose for that third option is not acceptable, they still have two valid options that meet the state's criteria. It's this third option that's new and it goes beyond state law that in my mind is an extra potential benefit for the developer and beyond what we're required to supply. So that's what I'm talking about here is we do- I'm not saying we take away the on-site but separate or we take off the land dedication. It's when you get into some of this much more complicated option of the third one that it needs to be viable. And even the other two, you're required to provide evaluation, financial proformas, how it's going to work. If those aren't completed to your satisfaction, are you saying you don't have any right to say this hasn't been completed to our satisfaction? I think you do. And so those things don't go away. So that's what I'm referring to here. I'm not saying that we take away the two options that exist today and are there and available today, those don't change. It's this third option that I'm saying it needs to include a provision that says that ultimately we need to- we can evaluate it and determine whether it's actually equivalent and provide approval on whether that meets the criteria. If not, you have these other two options that you can be- available to use and have been available for since 2019 or whatever we put the program in place. Does that help?

[01:46:17] City Attorney Jennifer Logue: Okay, it helps a little. Do you have any more- can you provide any more clarity on "evaluate"? I'm just a little bit concerned that we're getting into a realm of subjectivity that is not allowed these days. Right? We have to provide a mechanism by which developers can understand how they- how they can comply. So I think the Housing Director made a good suggestion related to, you know, qualified developers, right? So if we're talking about a partnership and a proposed partner, maybe we can seek documentation demonstrating that they are a qualified developer or something along those lines. I think then at least there's some- some level of objectivity to the compliance standard. Right? So if your concern is that, you know, you don't want developers partnering with crooks or people who have been found to be unscrupulous, right, in this development world, then maybe we need to seek documentation demonstrating qualifications for private development. Would that help?

[01:47:44] Commissioner Bill Cranston: It helps. I mean, I guess I'm- that's- I'm not expecting to write all the things that you have to review in order to get there. One of the things that you listed in here is the applicant must provide a feasibility analysis, the financial analysis, demonstrate the value with off-site in-lieu fee equivalency, identify a developer contribution, the proforma of the secured financing, no city financial contributions, the partner is in legal good standing in all jurisdictions in the state. Whatever you need to do there, I absolutely agree they need to be objective. I'm trusting that my wonderful City Attorney and her assistant here can go off and look at these and say, based on what you're asking, how would you evaluate? You're going to look at it somehow. You're asking for the developer to provide this. So what- how were you going to evaluate it before? If they're providing it and you're providing no way of evaluating it, why is it even in here for the proposal from staff?

[01:48:48] City Attorney Jennifer Logue: No, we can write it, and I'm certainly not asking you to write it. I just want to make sure that I am understanding that whatever we go look at and whatever we research, we are seeking to accomplish the goal that you are trying to accomplish here. So if- if your focus is on, you know, ensuring that any partner is qualified and should not be otherwise disqualified, right, we can definitely do that. We can do that and include criteria. I just wanted to be sure that's what you're looking for.

[01:49:22] Commissioner Bill Cranston: That- that's a component, but you're asking for the developer contribution, the proformas. If you review the proforma and it makes- it doesn't- it's not consistent with current construction costs and things like that, you should be able to evaluate that. And that's- so it's not only those. It's all those criteria that are included in here that you're looking for that there should be some basis for evaluating those things. Otherwise, don't ask. So you're saying that you're going to do these things, cool, put in those criteria how you're going to assess it, so that's clear to the developer that these are the things they need to do and these are the things they need to meet, okay? You've said that you're going to ask for more money to go off and do evaluation of this because it does- it's more complicated. So maybe it's, you know, you're going to look for the recommendation of the outside consultant you're hiring to do this work, that they come back with a specific recommendation on approval or changes. It doesn't mean that they- as through that evaluation process you can't go back to them and say, 'Okay, here's where you're missing, do something about it,' and they come back with something that meets the criteria. So I would expect it to not just be a goes over the wall and they just get a yes or a no, that there's a dialogue process through that and hopefully they come back and they address any deficiencies in the proposal so that we do get there. That's- I just want to make sure that you have the teeth in the ordinance to say, 'I've looked at it, here's the gaps,' and if they fail to close those gaps, then we don't approve the project- approve that third alternative.

[01:51:00] Housing Director Wayne Chen: If I may make a suggestion is probably the one item for example, off-site partner, we might add a dash that says 'qualified developer partnership' and that might make the evaluation more comprehensive to your point. It's very typical for us to work with a developer multiple times through the entitlement process to get the alternative compliance proposal in a place where they can bring it to Council. Given the streamlined requirements that the state has now, that's why we're really needing to have a compliance plan that's completed, but it would still typically require an iterative process or talking to the developer to say, 'In our evaluation, it doesn't meet. We have our 30-day comment letters, we list the deficiencies and allows them an opportunity to modify.' So I think that's already built into our process and if we just add 'qualified partnership or developer' to this, I think that can really make it more comprehensive in terms of evaluation.

[01:52:12] Commissioner Bill Cranston: Looking to actually do- so that's one point. But you listed- you're listing viable financing, so do you- and I didn't go through and read every detail of the thing, okay? Somehow you're going to evaluate whether it's viable financing. All right? So those kind of things all need to be there somehow. Success.

[01:52:34] Vice Chair Alex Nuñez: Other Commissioners. Anyone else wants to make commentary? Commissioner Subramanian.

[01:52:47] Commissioner Shwetha Subramanian: Thank you, Chair. Thank you, staff, for continuing to make progress on this very important ordinance and the changes that you have recommended here and I think we need to really get to this soon. I appreciate the speakers who showed up in person today and shared some invaluable insights into what's really getting in the way of bringing more housing and more affordable housing and certainly more like moderate-income housing to Mountain View. And I think working on this and, you know, improving it sooner is what's really going to get us closer to that goal. And particularly with that in mind, I urge staff to really work on the graduated fee structure for the seven to 10 units because I do think under SB 684 and 1123, there are going to be opportunities for smaller sites to create 10-unit residences and housing. And so I think putting that graduated fee in place sooner will really help speed up some of that production. And outside of that, I think I still think that there might be an opportunity to figure out some way of creating better equivalency in the land dedication model because I think using the same fee structure for the in-lieu perhaps doesn't envision the longer time it might take to develop just open sites, as we've seen even with the case with two examples. So other than that, I am in favor of the amendments being proposed today. Thank you, Chair.

[01:54:55] Commissioner Paul Donahue: So the public speaker brought up an interesting point on the seven units versus 10 and my assumption on the choice of seven was that 15% of seven is 1.05. But for something that's seven, eight, or nine, that would require between one and 1.5, and my reading of the ordinance is that that would actually then round down to one. Is that correct?

[01:55:51] Planning Staff: They would still- a 10-unit project would still need to provide one unit, even an eight-unit project would have to provide one BMR unit on-site. Any graduated fee reduction, if you want to extend it up to 10, you're now asking us to waive a 15% on-site requirement. So at seven units, we need an on-site unit. If it's eight, it'll be one unit plus the fractional fee. So at nine units, one unit fractional fee. 10 unit, yeah. That's sort of how the math is working right now. So at nine units, one unit fractional fee.

[01:56:27] Commissioner Paul Donahue: Oh, so today if there's nine units, it's one unit plus a fractional fee.

[01:56:31] Planning Staff: Correct. Yes.

[01:56:32] Commissioner Paul Donahue: Okay. I see. Okay. As usual, my fellow Commissioners asked some interesting questions that got me thinking about various things. Lot 12 was mentioned as a- I mean it's not really a land dedication thing because I guess the city owned it anyway, but I was on the Downtown Committee in 2014 when we were deciding where to move the Farmers' Market when there were games at the then-new stadium. And somebody said, 'Oh, we can't put it at Lot 12 because that's going to be- that's not going to be a lot anymore.' And you know, then there were subsequently 11 football seasons and so these things kind of can take a long time, which is unfortunate. But I don't know the history of that and I guess maybe we don't need to get into into that specific thing. But another thing that I heard was essentially redlining, which concerns me a lot. I know that your scenario seemed highly speculative, so hopefully that doesn't come to pass, but I'm- that's not okay with me. So I'm not sure- I'm not sure exactly what can be- how we can address that through this process right now. But I'm- but I'm welcome to comments from other people about that. That's- I throw these things out there as part of the deliberative process that other people please please make comments that will help me deliberate. As far as other things like physical accessibility, you know, having an alternative means of compliance, you know, state law requires that. The construction cost index, I think is actually a really good thing especially if construction costs are outpacing normal inflation. We definitely need to be in line with that. And yeah, these other other things I generally support. So I'm generally in support, but I welcome other comments. Thanks.

[01:59:22] Vice Chair Alex Nuñez: Sounds good. Commissioner Pham.

[01:59:28] Commissioner Tina Pham: Thank you, Chair. I am generally in support of the staff recommendation. I know it's not perfect and I know that this has been done over multiple rounds of amendments, which I can imagine has been a lot of work and I know that there are items in here that allude to future amendments in the future, maybe in 2028 or with some other efforts that were cited. I do like how you guys laid out, you know, the clarity in the staff report showing the alternative compliance measures. I do agree with some of my Commissioners that they seem very uneven. I'm not sure how to address that. It seems like we have these options and it may be that one or more of them will be much more preferred than others. And so I'd be curious to see when additional amendments are going to be proposed in a couple years how the- what the popularity of these alternative compliance measures are at that point. I do agree that changing from CPI to CCCI is a good approach. In my work, we are considering some of that for some of the projects I work on because construction costs are changing more quickly than others. I think that's all.

[02:01:07] Vice Chair Alex Nuñez: Thank you, Commissioner. Commissioner Cranston, you have your hand up on the queue.

[02:01:09] Commissioner Bill Cranston: Two things, one's in scope and the other one actually may not be. So I think the Chair maybe articulated more clearly than I did, but the way the location choice option right now and the reason I was so frustrated not seeing the map is the reality is what the way they're worded as one of these must be true is the only one that has any teeth is the HCD designated high-resource area. I think you'd be hard pressed to find even something that's in one of the- not the highest but the high or the medium that's not within a half a mile of a high-resource area. So if the expectation of Council is that we are trying to make sure that we're addressing AFFH and we're trying to get people on transit, the- by doing it as one and only one item and including it as the HCD designated high-resource area, something that we don't control, those are illusions in my mind. The only one that matters is the HCD designated high-resource area and we don't control that. So I guess if that was one of the things that Council looked at, then I guess it's okay, but I guess I would like to state in the record that in my view there is no value in including south of El Camino as a- as a item if the intention is to address AFFH and there's no value including the El Camino Precise Plan if the intention is to address transit because everything is within that HCD designated high-resource area. And I don't know how often they change it, but when they do, then all this is going to change. But right now, that's the only criteria that's there that matters. So I'll probably still support it, but I guess I- because I'm assuming this is here because Council said this is cool and we should include it. But that's my concern. The thing that I'm- the other thing that I'm worried about is and my the Chair didn't address this, but in my mind, I have- I don't have a method of evaluating the equivalence of a CSFRA unit and a BMR unit and I'm troubled by the fact that if something was inclusionary, we would have the CSFRA unit and a new unit. And by including and by allowing the inclusion of CSFRA units in the third option, we go to a situation where there's no additional units, which I thought from our capability that's what we're trying to do. If that was- I don't know whether that was discussed with Council initially, but I thought part of the goal of the BMR ordinance was to- was to get more units. And the option to include CSFRA in option- the third option means that it's likely that we will not. So and maybe staff can tell me whether Council understood that, but I just- I'm that's not what I- my expectation was. So that's a comment. The third point is something that's not on the list here, but I was on the Commission when this came up. The 25% BMR requirement for rowhomes came about before SB 330 and we were seeing BMR units getting turned into into townhomes left and right. Okay? The law changed and guess what? All those townhomes stopped being built. The economic evaluation that was done at the time that said that the the financial equivalent was 20- at 25% versus 15% was probably value- valid at the time when they could just do whatever the heck they wanted. Okay? That's not true anymore. So I think, and I mean it's not in line with what we've discussed here, but I think it should be brought back to Council and said, 'Should this be changed to be the same thing?' because I don't believe- I would- I'd find it hard to believe and the developer in the room probably would agree with me that that financial equivalence for 25% for a townhouse or rowhome is still true today with the state- the change in state law. So it- I think we should be looking at making that the same for everything. Again, I- I think it's outside of- it's something new I guess in the scope of this. So correct me if I'm wrong folks, but I don't think I can propose that as a- an amendment at this point. But I think it should be raised back to Council because I think that's- it was like, 'Oh yeah, we that's why we did that and that's- that's changed.' So those are my three comments in addition to the one that I had at the beginning.

[02:06:18] Vice Chair Alex Nuñez: Thank you, Commissioner Cranston. Commissioner Dempsey.

[02:06:21] Commissioner Hank Dempsey: Thank you, Mr. Chair. I'll simply say I'm going to be supporting this tonight. I appreciate that we've got fee reduction in this, I think that's always going to be a valuable direction to go in. I also appreciate that we're going to be enabling sort of administrative changes to BMR going forward so you don't always have to bring it here and listen to us for two hours. So that's probably a smart thing to do. My- and just my last nitpick is in the staff report when you send it up to Council, like please provide a little more explanation of the one piece that that you're not recommending and why and you can do that in two sentences. But otherwise, planning to support.

[02:06:58] Vice Chair Alex Nuñez: Thank you, Commissioner Dempsey. Vice Chair Donahue.

[02:07:01] Commissioner Paul Donahue: I just had one minor comment on what Commissioner Cranston said. I think that it's still useful- there is a portion that is not a high resource area that is in the El Camino Precise Plan on the north side of El Camino between Ringstorff and Ortega or something like that. So keeping the El Camino Precise Plan in there- I'm not discounting like your general sentiment, but there's technically there's a small reason to keep that in. I throw these things out there as part of the deliberative process that other people please please make comments that will help me deliberate. As far as other things like physical accessibility, you know, having an alternative means of compliance, you know, state law- state law requires that. The construction cost index, I think is actually a really good thing especially if construction costs are outpacing normal inflation. We definitely need to be in line with that. And yeah, these other other things I generally support. So I'm generally in support, but I welcome other comments. Thanks.

[02:07:34] Vice Chair Alex Nuñez: Other comments. Other comments. No. Okay, I guess I'll go. So I want to support this. I have a big kind of issue with the HCD map. My understanding is that the housing element, the final housing element is like legally considered findings. I guess I don't want to just say that, but like it's based on findings. Is it a finding? I don't know, look to our city like- is it itself a evidentiary document that can be relied on as like a finding or something? I don't know, like can someone help me out on the legal side?

[02:08:25] City Attorney Jennifer Logue: I'm not exactly sure that I understand the question. Would you mind repeating that?

[02:08:30] Vice Chair Alex Nuñez: Yeah, I'll elaborate. So for example, in our published housing element, there are three figures: figure 98 on page 334, it's called 'Housing Sites by Share of Non-White Population,' it's a map. Another map on page 337, it's figure 99, called 'Housing Sites by Share of Low and Moderate Income Households.' And then figure 100, 'Housing Sites by,' I have no idea what a TCAC opportunity score is, but it's there and it's on page 340. And you know, they're not perfect, but I think those maps, which presumably were based on data submitted to HCD, seem more in line with kind of how I would suggest that a- a majority of our residents would also kind of experience the economic distribution and situation. And so I guess why I'm asking is since those maps are in our housing element and I'm struggling between this clash with the AFFH and the current criteria for what we accept as an off-site alternate compliance, which is that there is no language in there right now, as far as I understood from Mr. Chen earlier today, there's no criteria that would whether it would preclude or at the very least invite significant scrutiny where there's a scenario where something that for example in figure 99 on the housing element where some project in the 30 to 39.9% population tract of low to moderate income could comply with their alternate mitigation or compliance I'm sorry by placing that off-site, you know, building in one of the tracts with, you know, the 50 to 59.9% moderate to low income. Basically, like there's no language that I'm hearing that would say if you try to do your alternate compliance by putting an off-site building in a population tract that is lower income than the one where your market rate development will be, that that there's I guess no more scrutiny or not more something there to either discourage that because of our AFFH, which is its own self part of the housing element, part of our city's, you know, goals and commitments, the values that, you know, our Council has put forward. And so what I would like to see or hear, I guess, you know, maybe whether it's staff, Ms. Logue, whoever it is, if we were to say, 'Hey, it's not we're not just going to use that HCD map, but we're going to look at, you know, figure 99 in the housing element and we're not going to let you without more scrutiny or without a higher extraction of value, we're not going to let you just put what would have otherwise been in the lower shade green into the darker shade green, we're not just going to let you do that.' Right?

[02:12:27] City Attorney Jennifer Logue: So let me see if I can- I honestly am not quite sure I understand. But I would have to evaluate what those figures are that you're pointing to in the housing element. You know, I'd have to go back and look at them.

[02:12:43] Vice Chair Alex Nuñez: Would you mind pulling it up? I see a lot of our Commissioners looking at it right now.

[02:12:49] City Attorney Jennifer Logue: I- I can tell you that even if I pull it up, it's- I would still have to go back and do some research on what is the import of each one of those figures, where did they come from, and what data was used to create them to determine whether or not they could be used as a basis for determining where the off-site housing could be built. I'm not saying no. I think if I'm understanding what you'd like us to look into, I think we can look into that and explore that. I would just like some time to sort of go back- I've looked at the housing element many times, but it's very long, and so I'd like to just go back and look at those maps and compare them to the figures that housing staff used tonight and see if we can't accomplish what you are asking us to accomplish. And I don't know if Director Chen- I can't see, I can only see you on the screen and I apologize so I don't know if he's standing up or if he has any thoughts. There we go, I can see him now.

[02:14:08] Housing Director Wayne Chen: Thank you very much. Yeah, I can try to take a peek at the maps too. And perhaps if I were to also try to summarize, I think it's some version of notwithstanding the maps or some such, an off-site delivery cannot cause further concentration within a- say a low-income census tract or some such. Does that capture the concept that you're trying to get at?

[02:14:36] Vice Chair Alex Nuñez: Yes, and in a way that's ideally at minimum more granular than that HCD map that we saw.

[02:14:44] Housing Director Wayne Chen: Okay. I think we understand the concept and subsequent after this meeting, we- I think we can do some additional evaluation of it.

[02:14:54] Vice Chair Alex Nuñez: Okay. If that's the case, then and and also-

Segment 4

[02:15:00] Vice Chair Alex Nuñez: I do support the additional kind of language clarification direction what have you around the proposal that Commissioner Cranston made earlier around qualification and scrutiny that side to the extent that I would definitely be supporting this with the addition of that additional review of as Mr. Wayne Chen put it, you know, off-site alternate compliances wouldn't exacerbate, you know, the concentration of, you know, like low-income areas in our city to the extent that the rest of my commissioners as colleagues would also support that then I'll put that forward. I think we have Commissioner Subramanian on the queue.

[02:15:54] Commissioner Shwetha Subramanian: Chair, if I may offer my thoughts on the three figures that you pointed out. I believe what they're trying to do in my understanding of it and certainly staff please correct me is that they are putting or demonstrating the housing element sites within the context of these three different sort of demographic study maps. And as I understand it, these are demographic study maps at a given point in time meaning that they might evolve. And I think the one that perhaps changes the fastest is the third one of the three you pointed out. So the TCAC map is essentially pointing out what TCAC puts out as high opportunity or high resource rich areas and I believe those are updated annually. And so the reason that the third figure looks very different from the map that staff put up on the screen is because this map is from a few years ago and I guess in the latest evaluation, the state has updated those to represent what they believe are resource rich areas which is sounding like it's all of the city. So that in my opinion is just to show us the context of the housing element sites vis-a-vis these different demographic status across the city. It doesn't in any way diminish the point you made about ensuring that there is not a concentration of BMR housing in a certain part of town. So that's just the point I wanted to make.

[02:17:41] Vice Chair Alex Nuñez: Thank you because, you know, just to take a moment to respond to that. Always I would rather give, you know, like broader direction to staff than more specific, which me as a not expert the more specific I get probably the worse things would get. And so to that extent just to be clear I was referencing those maps as examples of just the ability for more granularity in how we view concentrations of income in our city. And so the current proposal that I'm adding on top of Commissioner Cranston's is I believe as Mr. Wayne Chen put it that staff go explore additional opportunities to ensure that alternate mitigations as off-site would not lead to the furtherance of low-income concentrations in our city or take other wise appropriate measures. Okay. Commissioner Cranston.

[02:19:03] Commissioner Bill Cranston: I agree with the chair but I just want to make it clear that I view that as an 'and'. Okay? The rest of the things in here are one or the other or the other. That's not an 'or'. What he's suggesting, I think it's an 'and'. So it needs to be part of whatever criteria whether any of these here and I think he's saying thumbs up. So I just want to make sure it's not seen as a separate independent, it's an addition across the board for all these options. Do you agree?

[02:19:21] Vice Chair Alex Nuñez: Any other commentary questions points of deliberation otherwise would we need to modify to make a motion to extent that we do or don't need to modify the language to reflect the current thinking around qualification and further analysis on concentration of low-income tracts or is that just like added direction on top of the actual text that is in the script?

[02:19:58] Planning Staff Julie Bernard: If it's a majority decision then somebody will have to make a motion state the recommendation and then we can take a vote on that.

[02:20:10] Vice Chair Alex Nuñez: So then it would be something just in terms of the logistical element of how that would go, it would be reading the whole text and then also saying 'and we recommend that' etc. okay cool. then in that case unless there's other deliberation like Commissioner Cranston would you like to...

[02:20:27] Commissioner Bill Cranston: If the city attorney can suggest the language that I use I'm happy to read it okay. We talked for a while but I'm how do you want me to word this? Jennifer.

[02:20:44] City Attorney Jennifer Logue: I don't... I don't have a suggestion at the moment for your motion I mean I think that I have a general understanding of what you want.

[02:20:59] Vice Chair Alex Nuñez: Okay. I'll make a motion and I'll give it a crack at it and then Ms. Logue if things go haywire then you can gently guide me and then I think there's do we have a second or am I on an island?

[02:21:15] Commissioner Bill Cranston: I'll second.

[02:21:23] Vice Chair Alex Nuñez: Then I will make a motion that the Environmental Planning Commission recommend the City Council one adopt an ordinance of the City Council of the city of Mountain View amending chapter 36 zoning Article 14 division 2 residential development below market rate housing program of the Mountain View city code to modify the below market rate program and add section 36.40.32 governing graduated fee reduction for small projects and finding that these code amendments are not subject to the California Environmental Quality Act as recommended by the Environmental Planning Commission to be read in title further reading waived attachment 1 to the staff report with the added recommendation that language be included to assure the provision of qualified partners as part of alternate compliance proposals submitted by developers and that additional analysis evaluation for the potential implementation or suggestion to council of assuring that off-site alternate compliance tracks do not exacerbate low-income concentrations in the city of Mountain View. Is that okay?

[02:22:38] City Attorney Jennifer Logue: That was clear.

[02:22:42] Vice Chair Alex Nuñez: Okay thank you. That is the motion on the floor. Mr. Clerk can we put that to a vote?

[02:22:59] Vice Chair Alex Nuñez: The motion carries six yay and one absent. Thank you Mr. Clerk. Okay we will proceed to item 7 commission staff announcements update requests and committee reports. No action will be taken on questions raised by the commission at this time. Staff or Ms. Bernard do you have any or anyone else announcements including potentially the next meeting date?

[02:23:21] Planning Staff Julie Bernard: If nobody else has it, the March 18th EPC meeting is going to be cancelled because we don't have any items on the agenda. So most probably EPC will reconvene in April.

[02:23:32] Commissioner Bill Cranston: Quick question for staff. It was my recollection that there are attendance requirements for commissioners. Do you recall what those are?

[02:23:54] Planning Staff Julie Bernard: I don't recall but we can bring it back but yes you're right there are attendance requirements for commissioners.

[02:24:04] Vice Chair Alex Nuñez: Okay. No more questions announcements. This meeting is adjourned at 9:22 PM. Thank you.

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