The city's vision calls for 5,000 units of new housing that would be built near 2.3 million square feet of office space. To ensure both housing and offices get built, city leaders are insisting that office construction must be linked to housing production. Specifically, developers will be required to dedicate land or provide subsidies for up to three housing units for every 1,000 square feet of office space. At least 20% of those homes must be affordable units.
But developers were quick to warn that might prove infeasible. Pointing to the city's various fees, John Hickey of SummerHill Housing warned that the costs simply wouldn't pencil out to build housing.
"The combination of fees, land costs and building costs is turning into a one-two-three punch," he said. "It is counterproductive. This combination of fees is becoming more than projects can support."
Google, SummerHill and other developers warned that the city's effort to tie housing to jobs would backfire because it unrealistically forces projects to move forward simultaneously.
To a degree, city staff agreed the financial calculations are daunting. New housing built in East Whisman could be feasible, but only if future apartments were rented at an "ambitious" rate, equivalent to downtown Mountain View, according to a city consultant. City officials acknowledged that office projects are the "currency" that make large housing projects possible.
"This is consistent with what we've found in North Bayshore: Construction costs, fees and land are really combining to make residential development a challenge," said City Planner Eric Anderson. "We're trying to find those points when a project meets a return on investment."
In North Bayshore, the sprawling office park that's between the Bay and Highway 101, a city analysis found that each new apartment would cost $650,000 to build. Approximately one-fifth of that cost would stem from city fees that are largely tied to property values. On at least one project, the City Council later showed a willingness to lower the fees.
One project in East Whisman that will test this financial formula is a Google proposal for a new campus surrounding the VTA Middlefield station. This project, which was recently submitted as a draft to the city, calls for 660,000 square feet of offices, which would be linked with as many as 1,400 new homes. This project includes various amenities, including community event space and affordable housing.
The city also has a stack of so-called Transfer of Development Rights (TDR) projects that essentially shifted office development away from the San Antonio area and into East Whisman in order to help the Los Altos School District build a 10th school site. In that compromise, the city agreed to allow six so-called gatekeeper projects, totaling 389,000 additional square feet of offices, in the East Whisman neighborhood to move forward. As further incentive, the City Council on Tuesday agreed to grant a bonus floor-area ratio for TDR projects, allowing them to build denser offices and housing on their sites.
It remains to be seen exactly how new development in East Whisman would impact the Mountain View Whisman and Mountain View-Los Altos school districts. Officials from both districts have raised concerns that the city's push for rapid housing growth must be balanced with funding for school expansion. Mountain View officials are currently working on a "citywide school strategy" that will likely stipulate how much developers have to pay in school fees, according to the staff report. That school strategy will be discussed sometime in the fall.
For these future projects, the City Council said that some projects should be delegated to the city's Environmental Planning Commission or its zoning administrator for review. In their comments, council members proposed stronger incentives for bike and pedestrian infrastructure and public art.
The final version of the East Whisman precise plan is expected to come back before the City Council in the fall.
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