TOOLS FOR EQUITABLE URBAN INVESTMENTS: THE CALIFORNIA EXPERIENCE

Vivian Kahn, FAICPDyett & Bhatia, San FranciscoCrafting the New NormalSan Diego, CADecember 7, 2012

OVERVIEW

Authority Key issues to keep in mind Policies and purposes Approaches Identifying benefits and incentives Examples Recommendations

AUTHORITY FOR COMMUNITY BENEFITS

Rooted in police power to regulate development to: Protect health, safety, and welfare Mitigate potential development impacts, and Achieve community objectives

A legitimate exercise of police power imposing land use restrictions that enhance community welfare

Distinguished from mitigation fees but subject to demonstration of “reasonable relationship”

KEY ISSUES Distinguishing benefits from basic

requirements Eligibility thresholds (e.g. minimum size,

benefit threshold, etc.) Defining “extraordinary” public benefits Identifying the right bonuses to be offered

(e.g. height, FAR, expedited processing, etc.) Valuation of benefits to show reasonable

relationship Public participation Ease of administration Post-approval monitoring for compliance and

confirmation of benefit

ESTABLISHING OBJECTIVES AND PURPOSES

Santa Monica LUCE Meet the community’s values and expectations by

defining how new projects will contribute to the city Require community benefits subject to CUP or

development agreement to exceed base heights and FAR

Berkeley DAP All new development under DAP must deliver

significant public benefits with many “proportionate to building height”

Mammoth Lakes Resolution 09-55 Provide amenities beyond those ordinarily achievable

“commensurate with financial incentive conferred to an applicant in the form of additional land value or development profit”

IMPLEMENTATION APPROACHES

Development agreement—discretionary legislative

Conditional Use Permit—discretionary adjudicative Negotiated benefits Menu of benefits

Ministerial entitlement based on compliance determination

IDENTIFYING BENEFITS AND INCENTIVES

To achieve benefits the community desires: Amenities must reflect community priorities Incentives must be grounded in local real estate

economics Distinguishing benefits from basic standards Different priorities in different districts and/or

neighborhoods Recognize that priorities change over time Who decides and how?

CALCULATING VALUE OF BENEFITS AND INCENTIVES

How will relative value of benefits be calculated? Point system Development value/pro forma basis Pass/fail thresholds

Assign values based on monetary value, physical size, or percent of site area

Economic studies: Establish value; Assess feasibility; Demonstrate reasonable relationship; and Show how basis for calculating points is reasonably

related to benefits obtained and project impacts

EXAMPLE OF BONUS VALUE TABLEType of Benefit Maximum Points Basis for Calculation

Publicly Accessible Open Space exceeding park-dedication standards

50 50 pts: 15 percent+ of site area (min. 2,000 sf) as privately owned open space35 pts: 10 percent+ of site area (min. 1,600 sf) as privately owned open space. 20 pts: 5 percent+ of site area (min. 1,000 sf) as privately owned open space. 10 pts: Contribution to citywide parks fund

Sustainable Design 30 20 pts: If 75 percent of total building roof as accessible eco roof, provided eco roof and “eco landscape” together exceed 50 percent of total site area. 25 pts: LEEDTM Platinum or equivalent (third-party certification req’d)20 pts: LEEDTM Gold or equivalent (third-party certification req’d)

Alternative Energy 20 20 pts: If 10 percent of total building energy load provided by solar panels or other on-site renewable sources, including co-generation.

Public Right-of-Way Improvements

30 Pts based on dollar value of off-site improvements X 10 divided by average development cost per square foot or other case-by-case determination.

PROCEDURES

Review and approval Ministerial—checklist, menu, etc. Adjudicative--Conditional Use Permit Legislative--Development Agreement

Flexibility vs. certainty Threshold requirements Monitoring compliance and results

EVALUATION AND ADJUSTMENT

Periodic review to assess: Whether benefits provided

meet expectations Value of specific benefits in

light of community needs, changes in regulatory environment, other factors

Effectiveness of administrative procedures and requirements

BERKELEY DOWNTOWN PLAN (DAP)Downtown Area Plan requires all new development to

deliver significant public benefits “many of which should be in proportion to building height”LEED Gold or equivalentStreet, Open Space and Transportation impact feesAlternative transportation (e.g. car sharing, transit passes, unbundled parking, etc.)Affordable housing or in-lieu mitigation feeVoluntary “Green Pathway” review process for projects providing “extraordinary public benefits that could not otherwise be obtained”Waiver available to allow adaptive reuse or preservationBuildings over 75 feet must provide additional benefits

BERKELEY GREEN PATHWAY

Two tiers based on building height (above and below 75 feet), size, and project type

At or below 75 feet excluding hotels and buildings with over 100 units

Over 75 feet providing additional benefits

Prescriptive benefits—affordable housing, local hiring, and prevailing wages

Incentive—Expedited review with voluntary “Green Pathway” process

SANTA MONICA Core principle of LUCE--

New development under the LUCE should provide benefits to the community

Procedural tracks tied to development parameters Tier 1: Ministerial (based on

provision of affordable housing)

Tier 2: Conditional use permit

Tier 3: Development agreement

COMMUNITY BENEFITS IN THE LUCE Approach:

Base height of 32 feet and base FAR varying by district

To exceed base height and FAR, projects must incorporate features that will contribute to social and environmental goals

Five categories of benefits: Trip Reduction and Traffic Management (e.g. bike

facilities, free transit passes, shared parking) Affordable and Workforce Housing Community Physical Improvements (e.g. ped/bike

connections, open space, neighborhood retail) Social and Cultural Facilities (e.g. cultural, youth,

and senior facilities, public art) Historic Preservation

SAN DIEGO CENTRE CITY DISTRICT FAR bonuses for:

Affordable/senior housing exceeding State density bonus

Publicly accessible open space Dwelling units with three or more bedrooms Eco-Roofs to reduce energy consumption Public ROW improvements Employment uses excluding hotels and motels Public parkng

Additional FAR bonuses may be purchased TDR for public park sites and historic

structures

MAMMOTH LAKES 2007 General Plan includes policies and

actions to achieve community benefits from new development

Community benefits incentive zoning intended as a “bridge” framework to ensure policies and standards are tied to impacts and desired community outcomes

Incentives should be granted incrementally in direct proportion to scale of amenity received ensuring that reasonable nexus between benefit and incentive

RECOMMENDATIONS Distinguish baseline standards from community benefits Establish public process separate from development

review to identify benefit projects Economic analysis to provide transparency and

demonstrate reasonable relationship and feasibility Assign value reflecting citywide and district needs and

preferences Specify minimum requirements for qualifying benefits Allow flexibility for additional categories of benefits Ministerial and/or adjudicative procedures with specific

standards and requirements to maximize certainty Establish procedures to monitor compliance and

effectiveness over time Sparing use of Development Agreements