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Issue date: January 26, 2001

Environmental Planning Commission looks at housing impact fee Environmental Planning Commission looks at housing impact fee (January 26, 2001)

Sharp criticism from Weaver, new ideas suggested by Moholt

By Justin Scheck

At a Jan. 17 meeting, the Environmental Planning Commission discussed the intricacies of a housing impact fee, a measure that would require developers to pay a fee for each square foot of business space they build. The fee would be applied toward building affordable housing.

The commission spent the meeting reviewing the Jobs Housing Nexus Analysis. This study is required by law to determine the proportion between jobs and housing in the city, including the amount of money per square foot of development that would be needed to alleviate any inequity between the two.

The study, prepared by consulting firm Keyser Marston Associates, determined that the maximum allowable housing impact fee would be between $7.74 and $17.44 per square foot. However, Mike Percy, the city's principal planner, said that most cities enacting the fee charge significantly less than the maximum.

According to the study, 1,602 housing units were built in Mountain View between 1990 and 1999. However, with a median income of $87,000 for a four-person household in Santa Clara County, only 38.5 percent of the housing is affordable to families making less than 120 percent of the median. This means that 62.5 percent of the housing built in the last decade is affordable only to those families with an annual income of $104,400 or more. In other words, only 6.7 percent of the housing built in the 1990s is affordable to those families with an annual income of less than $69,600, or 80 percent of the median.

Cupertino, Menlo Park, Palo Alto, and Sunnyvale have enacted housing impact fees. Each city has a different pay scale, with different rates for different industrial uses. In Palo Alto, these range from 76 cents for warehousing/printing/assembly units to $7.14 for any industrial or office project exceeding a 35 percent floor-to-area ratio.

Commissioner Pat Showalter said that while the commission will continue discussing the study, she does not foresee a recommended fee in Mountain View that would come close to the maximum determined by Keyser Marton Associates.

"I would assume that (the commission's recommendation to the council), if there is one, would be on the same order as the (below-market-rate housing) fee, which is $2 to $3 per square foot," Showalter said. "I think it's important that we move forward quickly, because there's a lot of construction coming up," she said, adding that the EPC wants as much construction as possible to be subject to a housing impact fee.

"It's not going to fix (the housing/jobs imbalance), but it's one of the tools in the toolbox," Showalter said.

Commissioner Bob Weaver disagreed. "Personally, I think that (the fee) is not the best tool we could use, and, frankly, I don't think we should pick it up and use it," he said.

Weaver said he has numerous problems with the fee, ranging from questions about how the money will be spent and who will live in the housing, to whether the nexus analysis gave an accurate portrayal of the relationship of jobs and housing in the area.

"We should limit the spending (of funds collected for affordable housing) to indigenous Mountain View people, people who have been here for 10 years or more," he said.

Weaver explained he does not want the low-income housing to attract people to the community, but wants to ensure such housing be made available to long-time residents.

"You can blow in off the turnip truck, spend six months here, and get on the list for affordable housing. But the people who have been here for years are not connected," Weaver said, adding that, in his opinion, immigrants who have been in Mountain View for a short time have better access to the affordable housing infrastructure than many long-time residents.

Weaver also said that he feels the study is misleading because Mountain View is "a business community. If you draw a bigger circle, and take in all of the bedroom communities that surround Mountain View, it doesn't look so bad."

Commissioner Carol Moholt, who did not attend the meeting, had a different perspective on the study. "I believe that the people who've done the study, as indicated by their credentials, are the best people to have done it ... I think the information is credible," she said.

"We are in such an unprecedented housing crisis that none of us could have dreamed of even two years ago that we have to look at every possibility with an open mind," Moholt said. "Things that in other situations might not seem like a good idea might have to be considered."

Moholt said also that, rather than using money from a housing impact fee to build new housing, the city could use it to subsidize existing housing. "We have been successful so far in leveraging money to make existing housing affordable," she said.

City council members had mixed reactions to the possibility of a housing impact fee.

Council member Matt Pear, who was a planning commissioner when the question of the housing impact fee arose, said he is staunchly against such a fee being enacted by the council.

"I would want the citizens to approve it through voter initiative ... I don't think this is something the council should be passing on by itself," he said.

Pear feels the fee would have the greatest impact on landowners because their land would be devalued in the eyes of the developers who would be buying it. "That's what makes it entirely unfair," he said.

Council member Rosemary Stasek said she needs more time to study the issue. "I supported the nexus study because I really wanted to see the information, to see what kind of effect it would have," she said, adding, "I think it is a concept worth the effort that we've put into studying it." 


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