HomeMy WebLinkAboutStaff Report 284-06City of Palo Alto
City Manager’s Report
TO:
FROM:
DATE:
SUBJECT:
HONORABLE CITY COUNCIL
CITY MANAGER
11
DEPARTMENT: PLAN~qNG AND
COMMUNITY ENVIRONMENT
JULY 10, 2006 CMR: 284:06
ORDINANCE REMOVING AN EXEMPTION FOR HOSPITALS
FROM TI-[E HOUSING IN-LIEU FEE (CHAPTER 16.47 OF THE
PALO ALTO MUNICIPAL CODE)
RECOMMENDATION
Staff recommends that the City Council adopt the attached ordinance removing an
exemption for hospitals from Chapter 16.47 of the Palo Alto Municipal Code (Approval
of Projects with Impacts on Housing).
BACKGROUND
The goa! and purpose of Chapter 16.47, adopted in 1984, is to "lessen the shortage of
low-income and moderate-income housing in Palo Alto by requiring developers of large
commercial and industrial projects, as a condition of using land for the privilege of
development, to contribute to progams that increase the City’s low-income and
moderate-income housing stock." The ordinance requires that developers adding to the
City’s employment base provide affordable housing units to reduce the impact the
additional employees have on the City’s affordable housing stock, or pay a fee in-lieu of
providing units. As stated in the adopting ordinance, the City has an interest in ensuring
that people who work in the City can live in the City, because "the lack of affordable
housing in Palo Alto forces many new employees to commute considerable distances,
adding to the air pollution and traffic congestion in palo Alto and adjacent communities."
DISCUSSION
Since 1984, when the in-lieu housing fee was adopted, there have been several hospital
expansions in the City, adding significantly to the employment generated. Over 8,000
people are employed in hospitals throughout the City. At least 3,000 of these employees
are attributable to hospital expansions performed since 1984.
CMR:284:06 Page 1 of 2
Any additional or expanded hospital uses in the City will have further impacts on
housing. According to the 2001 updated nexus study performed for the in-lieu housing
fee, each additional 100,000 square feet of employment-generating uses in the City
creates a need for seven very-low income housing units, fifteen low-income units, and
sixteen moderate-income units. Without workforce housing alternatives in the city,
employees in those income categories will live outside of the city and commute in,
increasing traffic on city streets. Removing the fee exemption for hospitals will ensure
that they share in the cost of providing housing for the employees they generate.
POLICY IMPLICATIONS
This ordinance is consistent with Policy H-15 and Progam H-50 of the Comprehensive
Plan, which support pursuing funding for construction or rehabilitation of affordable
housing, and requiring developers of employment-generating commercial and industrial
developments to contribute to the supply of low- and moderate-income housing.
RESOURCE IMPACT
Currently, the in-lieu fee for commercial housing projects that do not provide affordable
housing units is $16.01 per square foot. A 1,000,000 square foot hospital expansion
would generate $16 million in housing fees, which could only be used to provide
affordable housing. The in-lieu fee only applies to net new square footage; replacement
or renovation of existing facilities is exempt.
ENVIRONMENTAL REVIEW
The imposition of an in-lieu fee on development is not a project under the California
Environmental Quality Act, and does not require environmental review.
ATTACHMENTS
A. Ordinance amending Chapter 16.47 of the Palo Alto Municipal Code
PREPARED BY: _~~/~~
DEPARTMENT HEAD REVIEW:
S~I’EVE ISLIE
Director of Planning and Co.unity Environment
CITY MANAGER APPROVAL:~~~.~, ~ ~.~@
EMILY ~a~RRiS ON - _
Assistant City Manager
CMR:284:06 Page 2 of 2
NOT YET APPROVED
ORDINANCE NO.
ORDINANCE OF THE COUNCIL OF THE CITY OF PALO
ALTO AMENDING SECTION 16.47 . 030 (EXEMPTIONS) OF
TITLE 16 (BUILDING REGULATIONS) OF THE PALO ALTO
MUNICIPAL CODE TO REMOVE AN EXEMPTION FOR
HOSPITALS FROM THE HOUSING IN-LIEU FEE
The Council of the City of Palo Alto does ORDAIN as
follows:
SECTION i. The Council hereby finds as follows:
(a) New non-residential development in the city
generates additional employees, some of whom will earn low and
moderate incomes. Those employees are most impacted by the lack
of affordable housing. A Housing Linkage Analysis completed in
September 2001 for the City revealed that new non-residential
construction generates an affordable housing demand of 38 units
for each i00,000 square feet of building area.
(b) The lack of affordable housing in Palo Alto
forces many new employees to commute considerable distances,
adding to the air pollution and traffic congestion in Palo Alto
and adjacent communities.
(c) Large commercial and industrial developments that
contribute to the jobs/housing imbalance and the concomitant
increasing shortage of !ow- and moderate-income housing should
be required as a condition of development to assist the
community in alleviating the housing shortage.
(d) Hospitals in Palo Alto employ over 8,000 people,
and over 3,000 of these employees are a result of hospital
expansions performed since the initial adoption of the City’s
housing impact ordinance in 1984.
(e) Removing the fee exemption for hospitals will
ensure that hospitals share in the cost of providing housing for
the employees they generate.
SECTION 2. Section 16.47.030 (Exemptions) of Chapter
16.47 (Approval of Projects with Impacts on Housing) of Title 16
(Building Regulations) of the Palo Alto Municipal Code is hereby
amended to read as follows:
060705 syn 0120132
NOT YET APPROVED
16.47.030 Exemptions.
The following uses, as defined in Title 18 of the
Palo Alto Municipal code, are exempt from this chapter:
a)Residential uses;
b)Churches;
c)Colleges and universities;
d)Commercial recreations;
(e)Hospitals and ccnvalcsccn: facilitics;
~(e) Private clubs, lodges, and fraterna!
organizations;
~(f)Private education facilities;
~(g)Public facilities;
~(h)Retai! service, eating and drinking service,
personal service, or automotive services when the
tota! additional square footage is 1,500 square
feet or less. This exemption shall apply only when
the additional square footage of new deve!opment
does not exceed 1,500 square feet. New development
that is larger than 1,500 square feet shal! pay a
fee for all square footage, including the first
1,500 square feet.
SECTION 3. This ordinance does not constitute a project
having potential effects upon the environment and therefore does
not require environmental review under the California
Environmental Quality Act.
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060705 syn 0120132
NOT YET APPROVED
SECTION 4. This ordinance shall be effective on the
thirty-first day after the date of its adoption.
INTRODUCED:
PASSED:
AYES:
NOES:
ABSTENTIONS:
ABSENT:
ATTEST:
City Clerk
APPROVED AS TO FORM:
Senior Deputy City Attorney
Mayor
APPROVED:
City Manager
Director of Planning and
Community Environment
060705 syn 0120132