New City rules for Residential Development finalized. Sherwin Development EIR posted
After nearly seven months of community, Council and Planning Commission discussions and study sessions, City staff presented their proposed regulations and development bonuses recommendations to Council last October. Regulations that included an amendment to allowed building Height/Density/Floor-Area-Ratio, an increase to the Affordable Housing Impact Fee and an update to the Density Bonus System. Regulations intended to spur affordable, family-friendly housing and reverse course on decades of studios & lofts and trend toward market-rate apartments after the loss of redevelopment.
These regulations were clearly written with the massive Sherwin-Williams project in mind that will be the biggest development in the city for the foreseeable future. A development that has been paused while awaiting these new rules to be finalized as well as the Environmental Impact Report that is now online and available for review (link to PDF below). The posting of the Beefy 528-page technical document prepared by LSA Associates will kick off a 60-day public comment review period that concludes March 8th. A tentative community study session is set for the February 25th Planning Commission meeting. If all goes “as planned”, the Sherwin Project could gain approval by the end of the year.
This visualization of one of the proposed Sherwin Development options shows open space across from Blue Star Corner and adjacent to the Railroad tracks.
Reduction of Base Building Levels
The first item was a resolution that reduces the base FAR (floor-area-ratio), height, and density allowed for residential projects. The idea is to encourage developers to pay into more for their entitlements through density bonuses. For example, what was once a three-story condo that required 10 points to get to four stories, will become a two story-condo that requires 20 points to get to four stories. The change anticipates developers to want to build more within a parcel of land to maximize their profits and make their projects economically viable.
Affordable Housing Impact Fee
The second resolution increases the affordable housing impact fee from $20,000 per unit to $28,000 per unit (an increase of 40%). After a Residential Nexus Study through Keyser-Marston Associates done back in June 2014, the City was presented with a maximum affordable impact fee of $35,600, or an increase of 78%. Staff lowered the amount to reduce the barriers to entry for developers and to match neighboring cities like Berkeley. The in-lieu option would be to provide 12% affordable housing units to a new project with 8% of the units for low-income residents and 4% for very low-income residents.
Planning Regulations for Density Bonuses
Lastly, the Planning Regulations for density bonuses have been amended. The density bonus categories have been revamped and reduced. What was once nineteen categories is now seven. Developers who seek bonuses must choose between the City’s or the State’s density bonus program (“double-dipping” being prohibited). The also introduced a “two tier” system to boost affordable housing. At least 50 percent of the bonus points have to be earned from affordable housing, and no more than half of the bonus points could be earned through community benefits.
For example, if a developer wanted to increase density by ten points, he cannot gain those points by doing eight points for providing open space. He must gain five points through providing affordable housing. Developers must also provide a Transportation Demand Management (TDM) plan for their project, which will be reviewed during the entitlement process. They previously wanted to require GreenTrip certification, a product from the non-profit Transform, but not all projects are applicable to GreenTrip.
The retooled seven bonus categories include:
- Public Open Space – Points for provision of publicly accessible open space on the project site, or a contribution to the Citywide Parks Fund equal to 1% of the project construction valuation for every 10 points
- Zero Net Energy – 100% of project energy load from solar panels, wind turbines, and/or other renewable resources. Note that this category, worth 50 points, is “all or nothing.”
- Public Improvements – 10 points for every 1% of project construction valuation towards public improvements that are not otherwise required by the City
- Utility Undergrounding – Contribution to Citywide Underground Utility Fund equal to 1% of the project construction valuation for every 10 points
- Additional Family Friendly Units – 5 points for each additional 5% of total units that have two or more bedrooms, of which at least 1% of total units must have three or more bedrooms. All such units must comply with Family-Friendly Design Guidelines, and are in addition to the 50% two-or-more bedroom units (including 10% three-or-more bedroom units) already required
- Small Businesses – Contribution to Citywide Fund to Support Small LocalServing Businesses equal to 1% of the project construction valuation for every 10 points
- Flexible Community Benefit – Currently undefined community benefit proposed by the applicant that is significant and substantially beyond normal requirements
The Council initially voted to prohibit the development of new studios, but under the recommendation of the Planning Commission they arrived at a ten percent cap. The unit mix overall would be at least 50% two-bedroom, 30% one-bedroom, 10% three-bedroom, and no more than 10% studios. The new unit mix is a response to the trend of one-bedroom and studio development in Emeryville for the last twenty years. Councilmember Martinez cited an alarming statistic from a recent American Community Survey, Emeryville’s housing stock is composed of 61% studios, while compared to Oakland with 31.8 %, Piedmont with 4.3%, and Alameda County with 21.5%.
The 10/20 public hearing where all three items of the proposed regulations were approved can be viewed below [28:05]. A second reading for the ordinance update was finalized on November 3rd.
Impact on in-progress development projects remains to be seen
The impact of these new rules will certainly increase the cost of entry for developers, but many see the need for this shift. Several representatives from the development community responded unfavorably, saying that these new barriers would cause their projects to no longer be viable, something the council seemed skeptical of.
“We’ve continued to work with the city to adapt to increased burdens imposed on the project” noted Anton Development representative Andrew Baker (developer of the Nady Site project) in this recent East Bay Express article. “now it finds itself on the brink of non-viability.”
At a recent development forum, panel participants EBALDC executive director Joshua Simon and Michael Ghielmetti of the signature Development group disagreed on the ramification of impact fees. “I believe land will stop trading [if too high]. It tends to have chilling effect” noted Simon. Ghielmetti noted he’s still seeing deals move forward.
— Darwin BondGraham (@DarwinBondGraha) November 17, 2015
Sherwin developer partner Lennar Corporation have been mostly quite the past few months. “We’re recalibrating our project but we’re hopeful our project will still go forward” noted Lennar Multi-family representative Kevin Ma. “It will definitely change what we envisioned for the project and we’ll need to work with staff to understand how these will alter this vision.”
The Sherwin project that has been in the works since 2006 but has stalled while the soil was first remediated and most recently because of Community resistance against the density, traffic impacts and all-rental nature of the original proposed project. Lennar is also spearheading the new SF Shipyard Hunters Point development as well as the Treasure Island “megaproject”. Partners SRM Ernst & Thompson Dorfman (Along with Bay Street’s Madison Marquette), just received approval on their plan to develop on the former Alameda Point Naval Station last June. A quarter of the 800 units will be designated affordable and built by non-profit Eden Housing.
The Public Market development agreement has since been approved after a stalled negotiation netted an additional 3% affordable rental units.
A neighborhood committee known as The Park Avenue Residents Committee (PARC) has been formed composed of neighbors of Blue Star Corner, The Emeryville Warehouse Lofts (1500 Park) and the Artist Coop. PARC is a group whose constituents represent approximately 200 residential units have met with each member of the City Council during the public discussion of the new family friendly and bonus point guidelines. PARC’s concerns are traffic, parking, building height and, the public benefits that the project may bring to the city.
PARC’s co-chairs, Paul Germain and Donna Briskin, stated that the newly adopted bonus point system mandates that exactly 50% of the maximum possible density of the new Sherwin Williams project is now “negotiable” with the City, placing an enormous burden for the developer to provide public benefits in order to gain the density required to build a project.