My first Paso Robles Planning Commission meeting started with a very important topic. We heard from an ad hoc committee of three members of the commission. Here is a summary of my questions for the committee, staff and comments on the proposal. I submitted these notes to city staff in advance of the meeting and brought up a few of these during the questions and comments section of the meeting. Ultimately, the full commission voted 6-0 to send a letter to the city council. The comments below are in reference to the letter in this planning commission agenda.

Review of report on “Constraints on Housing Inventory”

Comments and questions on the ad hoc committee’s report “Constraints on Housing Inventory”

First, thank you to the ad hoc committee for tackling this very important issue in the city. The committee’s analysis is straightforward and identifies a real need: reducing constraints on housing inventory, especially in encouraging more workforce housing. I agree with the report in general and would like to work toward finding solutions. The report offers specific recommendations that are worth bringing to the city council’s attention.

In considering the cause and effect of raising fees over the last 20 years, I would like to see a chart that shows the costs of fees to builders and the number of housing permits issued. Can staff or the committee provide a chart of this historic data? I think it is important that we consider the market forces of raising fees and building homes.

Regarding the chart on “Total Costs of Constructing a Home”, can we provide more details and sources of the information?

Recommendation 1

It’s a good recommendation. I think workforce housing should be a priority. It appears we are way behind our stated goals of development. Are we limiting our development potential by only focusing on three or four specific areas?

Recommendation 2

It’s a good recommendation. The city should continually review its needs list and consider omitting unrealistic projects. This would be a way to reduce impact fees. How much is already set aside for each project? How are these funds/accounts organized? If we are about halfway through this 20-year plan, do we have about half of these funds already collected and saved? Have we completed some of these projects? If we are off track then we should adjust our plans to meet current conditions and future expectations.

Recommendation 3

It’s a good recommendation. There are many creative solutions here. I think the final report should define “workforce housing.” Any fees that can be paid at the certificate of occupancy, or better yet, at escrow, would make home building more affordable and attractive. Since we are competing with other cities for housing growth, can we show the fees that other cities charge for comparison?

Recommendation 4

The points raised in this recommendation are valid. I think we should create a competitive environment for building and not choose favorites. We should be open to more opportunities from other landowners and builders. Since the property owners subject to specific plans have a great deal invested, I think we should closely consult with them on how they wish to move forward on their specific plans.

development impact fees

One of the slides presented at the meeting shows a comparison of fees by cities in our region. It shows that fees to build in Paso Robles are much higher than other nearby cities.

 

Comments and questions on the staff report on the ad hoc committee’s report

First, thank you to our dedicated city staff for preparing this analysis. It is very informative. It shows me that we are in this current condition of constraints on housing inventory because of the many, sometimes conflicting, guidelines and resolutions set forth by the city council over the last 20 years. It shows me that staff has given its full attention and best efforts toward achieving the direction set by council.

One advantage of our system of government is that our current leaders are not bound by the decisions of the past. Our new council has the opportunity, and responsibility, to set a new and better path for the city. I look forward to helping them where I can.

Item 1

My read of the ad hoc committee’s report is that we all recognize there are constraints to building that are out of the city’s control, such as CEQA and EIRs. So, let’s focus our efforts on the things we can do to improve in our city.

Item 2

I understand the benefits of specific plans for large-scale projects. They create well-planned neighborhoods and needed infrastructure. At the same time, I would be concerned if large-scale home building is exclusive to these three projects mentioned. We cannot force landowners and developers to build at our pace, so we will benefit from creating a competitive environment of many projects and builders. The city’s plans and policies need to co-exist with and capitalize on market forces.

The city’s general plan is to provide homes for 44,000 people by 2025. That gives us 10 years to build about 5,000 homes. That is a pace of about 500 homes per year. Either we need to create the market conditions to encourage that rate, or we need to change our general plan.

The conditions a city imposes on a developer, including fees and other requirements, should improve the project and the city, but not be so burdensome as to kill development, according to the training planning commissioners recently received at the California League of Cities conference. Based on the age of the city’s three specific plans for development, even taking in to consideration the Great Recession, it appears home building has largely stalled.

Item 3

Question about existing specific plans: How much has it cost to develop the current three specific plans? Who has paid those costs?

I agree with the city council’s 2003 resolution 03-232 that development should be fiscally neutral. What ideas can staff bring to the table to work within that principle and help reduce the current constraints on housing inventory?

I have only read a summary of the Taussig report. I am curious to see the full details and the assumption built into it. May I get a copy or link to it? Is average cost to the city per new housing unit in this report an average housing unit? It appears to include low-income housing, multifamily housing, etc. Therefore the effects of building workforce housing may be fiscally neutral. Workforce housing is just a step below high-end housing in most tables. According to a presentation by the California League of Cities, single-family housing is, on average, revenue neutral to cities.

While I believe the Taussig report includes the benefits of sales tax and property tax paid by new residents, does it include the benefits of new commercial and industrial developments that will come with new workforce housing? Industrial and commercial developments yield the city two to five times more in revenue than they cost the city, according to information from the California League of Cities.

At a recent economic analysis of Paso Robles, Chris Thornberg of Beacon Economics said one of the biggest impediments to attracting new commercial and industrial companies is a lack of workforce housing. If the city can build more workforce housing and attract new businesses at the same time, we could benefit from a multiplier effect.

What are the details of the city’s latest communications with the developers of the three specific plans mentioned? Why are they all paused? May we have contact information (names and phone numbers) to discuss the current state of the projects with them?

Item 4

Staff makes a good point about limiting the number of CEQA requirements by using a large-scale specific plan.

Item 6

It’s great to read that council and staff are working on improving permit reviews.

Item 8

Are residential plan check and inspection fees in line with the number of hours spent? What do we charge per hour? How many hours does a plan check and inspection(s) take? Do we have performance standards and measurements we can use to improve this? Can we streamline the process to save staff time and applicant expense?

Regarding water connection fees, can we review the details of this expense so we understand the rationale?

Regarding wastewater fees, can we review the details of this expense so we understand the rationale?

If the city’s financing of these new capital projects is dependent on new development paying fees, then we should quickly adjust plans as it currently seems unlikely that we will build 5,000 homes in the next 10 years. What are our plans for paying for a new water treatment plant and wastewater treatment plant in the absence of these development impact fees being paid? It appears to be a catch 22. With our fees too high to encourage development, we won’t collect the funds we need to pay for the capital projects. That means current residents will bear the burden of the city’s failure to develop new housing. On the flip side, if development impact fees are too low, then again, current residents will bear the burden of the new capital projects. What could a middle ground be?

I appreciate seeing the break down of the average fees to builders. How do these fees compare to neighboring cities?

Item 11

A careful review of the needs list appears to be an excellent option for reducing our constraints on housing inventory. If we can pare down our long-range needs, we can reduce development fees. I agree that it is important to consider grant possibilities. Can we review the items on the list in more detail and see where the grant possibilities exist?

Item 13

Collecting the sewer connection and capacity charge at the end of the development process would be one step in the right direction. Lowering the carrying costs for developers will help lower the constraints to home building.

Item 15

I see the benefit of having an exception for granny quarters. But, overall, I think a fixed fee structure encourages higher-end homes, such as workforce housing, which in turn has a better chance of being fiscally neutral because more they will yield higher property tax, higher sales tax and lower service requirements.

Item 16

While there may not be a justification for offering a quantity discount for some of the fees discussed in this section, it would seem logical that fees directly tied to staff hours could be reduced for larger projects. Processing 10 near-identical homes in a tract surely uses less staff time than processing 10 different plans.

Item 20

Could we please get more details on the CFDs, such as a budget, number of homes in the CFDs, etc? If CFDs are being used, then the negative impact detailed in the Taussig report are being mitigated.

 

Sincerely,

Scott Brennan
Planning Commission, City of Paso Robles

Discussion - One Comment
  1. Tish

    Apr 26, 2017  at 9:06 pm

    IMHO you’ve got the right anwsre!

    Reply

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