HomeMy WebLinkAboutStaff Report 13722
City of Palo Alto (ID # 13722)
City Council Staff Report
Meeting Date: 11/8/2021
City of Palo Alto Page 1
Title: SECOND READING: Adoption of an Ordinance Amending the City's Fiscal
Year (FY) 2022 Municipal Fee Schedule to Adjust the Affordable Housing
Commercial Impact Fee (FIRST READING: October 18, 2021 PASSED: 5-2,
Cormack, Tanaka no)
From: City Manager
Lead Department: City Clerk
This was heard by the City Council on October 18, 2021 for a first reading and was approved 5-
2, Cormack, Tanaka no. No changes were made to the Ordinance; it is now before you for a
second reading.
Attachments:
• Attachment9.a: Attachment A: Ordinance Amending FY 2022 Municipal Fee
Schedule, Housing Impact Fee for Non-Residential Projects
9
Packet Pg. 93
*NOT YET ADOPTED*
1
0160055_20211007_ay16
Ordinance No. ____
Ordinance of the Council of the City of Palo Alto Amending the Fiscal Year 2022
Municipal Fee Schedule to Update the Housing Impact Fee for Non-Residential
Projects.
The Council of the City of Palo Alto ORDAINS as follows:
SECTION 1. Findings and declarations. The City Council finds and declares as follows:
A. To ensure that future development projects mitigate their impact on the need for
affordable housing in Palo Alto, and to ensure that any adopted housing impact fees for non-
residential development do not exceed the actual affordable housing impacts attributable to the
development projects to which the fees relate, the City Council received and considered a report
from Strategic Economics and Vernazza Wolfe Associates dated November 2015 and entitled
"Commercial Linkage Fee Nexus Study," (the “Nexus Study”) and the findings of the Nexus Study
are incorporated into this Ordinance by this reference.
B. The Nexus Study used generally accepted and appropriate methodology to
determine the maximum amount needed to fully mitigate the burdens created by nonresidential
and mixed-use development on the need for affordable housing and establish that there is a
reasonable relationship between the need for affordable housing and impacts of development
for which a fee is charged, and that there is also a reasonable relationship between the impact
fee’s use and the type of development for which the fee is charged.
C. In October 2021, the City Council received and considered a study prepared by
Strategic Economics dated September 2021 and entitled “Commercial Linkage Fee Update,
Financial Feasibility Analysis.” This study analyzed economic returns and the likelihood of non-
residential development at various fee levels not exceeding the actual affordable housing
impacts identified in the Nexus Study.
D. The City Council now desires to update its housing impact fees for certain
nonresidential and mixed-use development projects as authorized by Palo Alto Municipal Code
Chapter 16.65, which fees do not exceed the justified fees needed to mitigate the actual
affordable housing impacts attributable to the development projects to which the fees relate, as
determined by the Nexus Study.
E. At least ten days prior to the date this ordinance is being heard, data was made
available to the public indicating the amount of cost, or estimated cost, required to provide the
service for which the fee or service charge is levied and the revenue sources anticipated to
provide the service, including general fund revenues, in accordance with Government Code
Section 66019.
9.a
Packet Pg. 94
*NOT YET ADOPTED*
2
0160055_20211007_ay16
F. At least fourteen days prior to the date this ordinance is being heard, notice was
provided to any persons or organizations who had requested notice, in accordance with
Government Code Sections 66004 and 66019.
G. Notice of the hearing on the proposed fees was published twice in the manner set
forth in Government Code Section 6062a as required by Government Code Sections 66004 and
66018.
SECTION 2. The Council of the City of Palo Alto amends the Fiscal Year 2022 Municipal Fee
Schedule by adopting the Housing Impact Fees for Non-Residential development, as set forth in
Exhibit “A” and incorporated here by reference.
SECTION 3. If any section, subsection, sentence, clause, or phrase of this Ordinance is for any
reason held to be invalid or unconstitutional by a decision of any court of competent jurisdiction,
such decision shall not affect the validity of the remaining portions of this Ordinance. The City
Council hereby declares that it would have passed this Ordinance and each and every section,
subsection, sentence, clause, or phrase not declared invalid or unconstitutional without regard
to whether any portion of the ordinance would be subsequently declared invalid or
unconstitutional.
SECTION 4. The Council finds that the adoption of this ordinance is exempt from the provisions
of the California Environmental Quality Act pursuant to CEQA Guideline section 15305 because
the adjustment of a fee represents only a minor change in land use regulations and section
15061(b)(3) because it can be seen with certainty that the minor adjustments herein will not have
a significant effect on the environment.
//
//
//
//
//
//
//
//
//
9.a
Packet Pg. 95
*NOT YET ADOPTED*
3
0160055_20211007_ay16
SECTION 5. As an amendment to the City’s budget, this ordinance shall be effective upon
adoption pursuant to Palo Alto Municipal Code Section 2.04.330, subdivision (a)(3); however, the
updated fees be effective no sooner than 60 days from the date of adoption, pursuant to
California Government Code Section 66017.
INTRODUCED and PASSED:
AYES:
NOES:
ABSENT:
ABSTENTIONS:
NOT PARTICIPATING:
ATTEST:
____________________________ ____________________________
City Clerk Mayor
APPROVED AS TO FORM: APPROVED:
____________________________ ____________________________
Assistant City Attorney City Manager
____________________________
Director of Planning & Development
Services
9.a
Packet Pg. 96
*NOT YET ADOPTED*
4
0160055_20211007_ay16
EXHIBIT A
Fiscal Year 2022 Municipal Fee Schedule
Planning and Development Services Fees
Impact & In-Lieu Fees
Office/R&D Hotel/Retail/Other
Housing Impact Fee Non-
Residential
$65.80 per sq. ft. Office/R&D $23.11 per sq. ft. Hotel,
Retail, Other Non-residential
9.a
Packet Pg. 97