REPORT TO COUNCIL
SUBJECT
Title
Approve Budget Modification No.10 in the Amount of $28,435 for Non-Residential Housing Mitigation Fee Study for BAE Urban Economics Consultant Costs
Report
BACKGROUND
A Housing Mitigation Fee (HMF) was first approved by City Council in 1983 to address the impacts of development and prevent the jobs/housing imbalance from becoming more severe. The fee was set at $7.19 per square foot for projects over a certain size and remained at that amount until 2002; it only applied to developments in industrial zoning districts with high floor area ratios (FARs) that required City Council approval. In 2002, the HMF was increased slightly and was indexed annually based on the CPI and remained limited to high FAR developments in industrial zoning districts. In 2015, the HMF was expanded to include office/industrial, retail, and lodging development projects in any zoning district; and the initial fee was set at $15 per net new square foot for all office/R&D and industrial projects and $7.50 per square foot for all retail and lodging projects, both adjusted annually for inflation as part of the annual fee schedule adoption. The fee was also renamed the "Housing Impact Fee for Nonresidential Development." The Housing Mitigation fee program was last studied in 2014 and updated in 2015.
In February 2021, the City Council approved Study Issue 21-02 to review and potentially update the Housing Mitigation Fees and allocated $60,000 from the General Fund to cover the cost of the Study. The California Mitigation Fee Act (Government Code Section 66000 et seq.) requires that local governments determine a reasonable relationship between the impacts of new development, the facilities needed to address those impacts, and the fees that the jurisdiction intends to charge. To meet this requirement, staff conducted a Request for Proposals (RFP) and selected BAE Urban Economics (BAE) to prepare the Non-Residential Housing Mitigation Fee Nexus Study. A contract ...
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