Resilient City Development Measures
The Housing Task Force, comprised of the Sonoma County Alliance, NORBAR and the Santa Rosa Metro Chamber of Commerce has reviewed the staff report to both the Design Review Board and Planning Commission. Reading the background section in the staff report leading up to these proposed zoning code amendments is enough on its own to support these changes.
We believe that some areas could be improved to create more certainty and increase the likelihood of implementation of important short term resources, which will be necessary for the rebuild effort, coupled with the need to continue with new development. The ability for approval under the ordinance at three years appears acceptable and adequate as a starting point with Council considering extensions in the future. The Planning Commission took the measure a step further in the right direction within their resolution by decoupling the Ordinance sunset and the expiration of approved temporary housing and temporary structures. We still ascertain that expiration 3 years after approval does not provide for enough time to implement larger scale efforts and recoup the upfront costs of such efforts.
We believe that these recommended Zoning Code Amendments were created from the pretense of assisting those displaced by the October fires, which is valiant and commendable in and of itself. Taking a broader look at the need is critical. There will be a need for longer term temporary housing and structures to accommodate housing for out of the area construction workers, potential for temporary training centers and gathering places to name a few. These larger facilities will require much more upfront costs and planning to implement and therefore require a longer sunset to recoup those costs and hopefully provide some return on investment to increase property owner’s interest in providing said temporary facilities.
From the perspective of a property owner; I wish to place 96 RV’s on my 8 acre commercial lot. There are two different costs to consider in pursuit of providing temporary housing; 1). The Opportunity Cost of not doing something else with my property and my time spent on this pursuit; 2). The actual cost of obtaining approval and building the infrastructure to support temporary housing. I first have to work through the business plan; next I need to hire engineering consultants to map it out on paper for submittal to the city. Let’s say that takes 4-months. Assuming zoning approval (entitlement) takes 2-months, I can then start building permit drawings for the necessary infrastructure. Let’s say building permit drawings take an additional 2 months with permit review and approval taking an additional 2 months. Now we are 10-months into the project and I have not yet put a shovel in the ground. All told, I am likely invested at a hard dollar amount of $125,000 and at an opportunity cost of 10-months having not pursued anything else. Let’s say infrastructure improvements take 3 months for a total cost of $2,706,586 (See Addendum 1) and it takes an additional 6 months to get to full occupancy, we are 19 months into the project and 9 months into the 3 year expiration. That leaves 2 years and 3 months left for occupancy to recoup my investment and hopes to have a normal rate of return as well. At stabilized occupancy with a 2 year – 3 month loan repayment on the investment total and considering a 10% pre-tax rate of return, the minimum monthly charge for each RV space would be $2,022. Nearing the end of 2 years and 3 months remaining, we realize that we still need these workers for an additional 7 years! That means we will need to be granted an extension, which will require the entire ordinance to be extended and/or every single project built under the ordinance, either of which will require City Council approval as written.
With a 9 year and 3 month loan repayment on the investment total and considering the same 10% pre-tax rate of return, the minimum monthly charge for each RV space would be $1,162. This is a much more affordable rate, which will increase the likelihood of workers coming to the area for the rebuild effort A significant assumption made with these scenarios is that I own the property debt free upon beginning this endeavor and have provided no rate of return on that value. In addition, the costs do not reflect a site that requires environmental mitigation fees, which could be upwards of $1,600,000 on an 8 acre site.
Looking at the situation from the temporary housing occupants’ perspective; would I travel to an area for work, all knowing that the work will take longer than three-years, but also knowing that I will have to find new temporary housing after the initial three years with no guarantee of any being available?
Keep in mind that the 96 RV space scenario only provides for 192 working persons assuming 2 adults per RV. We will need several of these projects viable to make a dent in the temporary housing need for the rebuild. All the more reason to look at creating more certainty in your action on this ordinance.
Section 20-16.030 Temporary Housing Item 6 G. Duration of Use and Section 20-16.040 Temporary Structures Item F. Duration of Use:
That the duration be ten (10) years from the building permit issuance date.
That the property owner is responsible for creating and implementing a two (2) year plan for vacating the property prior to expiration of the temporary use permit.
Provides certainty and increases the potential for return on investment for private temporary housing developments. Will reduce City staff time in processing extensions, which will be inevitable with a shorter duration. The two year vacating plan will help transition the parcel back to its original use (likely a vacant lot) and will not flood the market with the occupants looking to find other means of housing during transition.
Potential Variations to Consider:
Tier the expiration for temporary housing and temporary structures.
1-10 units: 5-years from approval of building permit.
10+ units: 10-years from approval of building permit.
Earlier sunset for less costly temporary structures/infrastructure, sites which would likely have all existing or more temporary sewer/water/electricity needs. This shorter expiration would also cover all of those lot owners who choose to live on the lot in an RV while their home is being rebuilt.
Provide longer term sunset for more costly temporary structures/infrastructure. Again, creating more of an incentive for larger projects to house more workers, while allowing for the property owner to recoup upfront costs and make a return on the investment.
This is an excellent first step and very much appreciated! The Housing Task Force supports the Santa Rosa City Council’s approval of the zoning code amendments with consideration for the above mentioned recommendations.
Can we, as a City, be bolder in our efforts to streamline the process from application to putting a shovel in the ground?
We thank City staff for their diligence in forwarding this proposed ordinance, and thank the City Council for approval of this ordinance and consideration of our recommendations.
Brian Ling (for Housing Task Force)
Sonoma County Alliance