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EXTENSION OF THE GREATER DOWNTOWN STOCKTON RESIDENTIAL AND CITY-WIDE AFFORDABLE HOUSING DEVELOPMENT PUBLIC FACILITIES FEE EXEMPTIONS
recommended action
RECOMMENDATION
It is recommended the City Council adopt a resolution:
1. Authorizing the extension of the Greater Downtown Stockton Residential and City-wide Affordable Housing Development Public Facilities Fee Exemptions until December 31, 2020.
2. Authorizing the City Manager, or his designee, to take all necessary and appropriate actions to carry out the purpose and intent of this resolution.
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Summary
The City Council originally approved Public Facilities Fee (PFF) exemptions for residential projects within the “Greater Downtown Area” on September 14, 2010, and extended those exemptions on January 12, 2016. On February 6, 2018, Council authorized PFF exemptions for a new affordable housing development located city-wide. Both programs will sunset on December 31, 2018.
To offer a greater competitive advantage and to stimulate additional affordable housing development City-wide, as well as new infill development in the “Greater Downtown Area,” it is recommended that the PFF exemptions be extended through December 31, 2020.
Background
On November 17, 2015, Council adopted the Stockton Economic Stimulus Plan (SESP) under which applicants receive a reduction of certain fees for single family and multi-family permits. The program will remain in effect for three years from the adoption date and is capped at 1,000 single family permits and 500 multi-family units city-wide. On July 17, 2018, Council extended the SESP expiration date to December 31, 2020, and increased the number of permits per subdivision from 20 to 30 and the permit limitation per builder on a city-wide basis from 40 to 80 (Attachment A - Council Resolution 2018-07-17-1302)
At the November 17, 2015 meeting, the Council also extended the current Commercial and Industrial fee reduction program, which will remain in effect until a new nexus study is completed and new Public Facilities Fees are adopted in conjunction with the General Plan update.
To encourage new residential infill development within the downtown area, the City Council adopted Resolution 2016-01-12-1206 on January 12, 2016, extending the “Greater Downtown Area” residential fee exemption program, which provides exemptions for certain PFFs until December 31, 2018 (Attachment B - Council Resolution 2016-01-12-1206). The “Greater Downtown Stockton” area is defined as land generally bound by Harding Way, Martin Luther King, Jr. Blvd., Pershing Avenue, and Wilson Way.
On February 6, 2018, the Council adopted Resolution 2018-02-06-0504 authorizing the same PFF exemptions available under the Greater Downtown Stockton Area residential program to affordable housing development within the Stockton city limits (Attachment C - Council Resolution 2018-02-06-0504).
Present Situation
The Urban Land Institute (ULI) Report dated August 2012, the Council adopted Economic Development Strategic Plan dated February 2015, and the Settlement Agreement with the State Attorney General from October 2008, encourage the creation of incentives and tools to stimulate infill development and support downtown revitalization. As a result, the Council authorized PFF exemptions for residential projects located within the “Greater Downtown Area.”
Further, PFF exemptions also help ease up-front development costs associated with new single-family and multi-family affordable housing projects and help stimulate city-wide affordable housing development. The fee exemptions may also result in the City’s limited affordable housing funds being spread over more projects.
To continue to support these efforts, staff is proposing that the fee exemptions currently available to both “Greater Downtown Area” residential projects and new affordable housing units located city-wide be extended through December 31, 2020. Fees exempted under these programs include:
• City Office Space
• Community Recreation Centers
• Libraries
• Police Stations
• Street Improvements
• Fire Stations
• Parkland
Should Council approve the recommendation, the fee exemptions will remain in effect until December 31, 2020.
FINANCIAL SUMMARY
To date, the Greater Downtown Area PFF exemptions have totaled $674,239 since the adoption of the program in September 2010. Approximately $125,021 in PFFs were exempted for City-wide affordable housing projects since the program was approved in February 2018, resulting in four new affordable housing units.
Taking action to reduce development impact fees is imperative to provide a competitive advantage over other communities thereby encouraging affordable housing development throughout Stockton and also provides a crucial tool to stimulate the development of infill housing in the “Greater Downtown Area.” These temporary PFF exemptions should be looked at as a method of balancing public policy objectives for the eventual adjustment of development fees to the in-market range and the stimulation of development activity within the City’s core.
Attachment A - Council Resolution 2018-07-17-1302
Attachment B - Council Resolution 2016-01-12-1206
Attachment C - Council Resolution 2018-02-06-0504