Mill Valley’s affordable housing impact fee reduced with 1-year grace period
Updated: Jun 2, 2018
POSTED: 08/08/17, 3:41 PM PDT | UPDATED: ON 08/10/2017
Author: Adrian Rodriguez
Publication: Marin Independent Journal
Dennis Klein, chairman of a citizens’ affordable housing advocacy group, says the Mill Valley City Council needs to spend more time on its affordable housing ordinance. (Adrian Rodriguez/Marin Independent Journal)
The Mill Valley City Council this week softened the blow of an affordable housing fee after residents planning home remodels said they were blindsided by the tax and called it unfair.
The council on Monday voted unanimously to reaffirm its affordable housing ordinance, but reduced the tax that would be applied to residential projects. That fee would be effective next year, rather than this November as originally planned.
The hope is that the 12-month grace period would exempt those already in the planning process and allow new applicants of residential projects to budget for the additional expense, council members said.
“I wrestled a lot with this, as part of me would like to go ahead and start collecting these fees,” said Mayor Jessica Sloan. “But there were enough people who came forward and said ... ‘I’m in the planning process. This doesn’t feel fair. Please don’t get in the way of me building this house I’ve been working on.’”
The affordable housing fee will apply to all new housing projects and remodels costing $100,000 or more. The fee will equal 1 percent of the project’s construction cost, and will take effect Nov. 1, 2018. The cost of a second-unit project, designed to provide affordable housing, would be exempt from the fee.
The council in July had unanimously agreed to a 1.5 percent affordable housing fee to take effect this year. City planners had estimated that the fee would generate more than $500,000 annually, which would be fed into an affordable housing trust fund.
The trust fund would be used for fostering affordable housing within the community, including the acquisition, construction, development, rehabilitation and maintenance or administration of property.
The ordinance and fee were scheduled for a second reading Monday, appearing on the agenda’s consent calendar; consent items generally do not require any discussion.
The matter was opened for a public hearing by Sloan, who explained that several residents planning remodels told the city that the tax would be burdensome and they hadn’t planned to pay the fee.
Sloan said she saw complaints and concerns on the social media site Nextdoor that the city did not give residents proper notification. Danielle Staude, senior planner, said the ordinance was discussed at nine meetings over the past year and a half, and that she has been working on the ordinance for more than 10 years.
Residents were supportive of an affordable housing ordinance and many applauded the council for taking up the issue. But the city hadn’t yet outlined a plan for the trust fund, causing consternation among many who opposed the fee.
Sloan said the city is planning a housing summit to solicit community input on what types of projects or programs the fund could be used to support. The ordinance would also require the formation of a housing committee tasked with assisting staff with selecting housing programs and managing the fund.
Overall, residents said that more needed to be done, with several calling the ordinance a Band-aid for a much larger housing problem.
Renee Stephens was one resident whose remodel application has gone through four years of planning and design, including several meetings with the Planning Commission, and she believed her project should be exempt from the fee.
“It’s been a long process for us,” she said, asking that the council exempt projects for one year.
Several residents said the Redwoods retirement home in Mill Valley is an example of affordable housing that works, suggesting that the city needs similar projects.
Dennis Klein, chairman of a citizens’ affordable housing advocacy group, said the city needs to be looking at 100 percent affordable housing options and that “as far as the fees, I see this causing things to be divisive.”
He said the fee would apply to too few, “and the benefit is going to be so small.”
Resident John Palmer suggested that the fee be a home-sale tax, rather than a home-improvement tax, a comment that received support by way of applause.
He called the improvement process a hardship, saying “it’s less of a hardship when money is changing hands at a sale.”
Councilwoman Stephanie Moulton-Peters called the ordinance and the fee “another tool in our toolkit.”
“We would like to do something big, but that’s not very easy to do these days,” she said. “The fee is something that we would collect over time and it would allow us to do matching funds, or leverage other funds and then do some bigger things.”
Councilman Jim Wickham said he is eager for the council to develop a plan for the fund.
“We need to basically stop talking and make some action happen,” he said. “We better have some plan in place or the community is going to wonder what are we doing.”
Councilman John McCauley said that the 1.5 percent fee was too high and suggested it be lowered to 1 percent. He also explained that the city recently adopted a new set of design guidelines to promote “inclusionary housing,” meaning that 25 percent of multifamily projects, such as apartments, have to be affordable units.
Sloan suggested that there should be a grace period. The council agreed on 12 months.
To read original article posting, click here: http://www.marinij.com/article/NO/20170808/NEWS/170809821