REPORT TO PLANNING COMMISSION
SUBJECT
Title
Forward Recommendation to City Council to Approve the Non-Residential Housing Mitigation Fee Nexus Study and Adopt a Resolution Amending the Housing Impact Fee for Non-Residential Development (Study Issue) and Find the Actions are Exempt from the California Environmental Quality Act pursuant to CEQA Guidelines Section 15378 (b)(4)
Report
BACKGROUND
The City's housing impact fee for non-residential development, also known as the non-residential Housing Mitigation Fee (HMF), requires new commercial and industrial developments to pay a fee that contributes toward addressing housing needs and improving the jobs-housing ratio in Sunnyvale. The HMF was originally adopted by resolution in 1983 and applied only to projects in industrial-zoned districts that exceeded floor area ratio ("FAR") thresholds (typically 35% FAR) and required City Council approval. In 2002, the HMF was codified and indexed annually to inflation. The HMF was updated again in 2008 and most recently in 2015 when it was expanded to apply to new office, industrial, research and development (R&D), retail, and lodging projects in any zoning district. The current HMF rates for Fiscal Year 2022 are shown below:
HMF revenues are collected in the City's Housing Mitigation Fund, which is used to support the development of affordable housing in Sunnyvale. Since the last update to the HMF in 2015, the City has collected over $47 million dollars in housing impact fees.
In February 2021, the City Council approved a study issue (Attachment 2) to review and potentially update the HMF. In order to update a mitigation fee, 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 selected BAE Urban Economics (BAE)...
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