President Citros, it is Monday, November 10th, and we're um gonna go ahead and get uh started with that training board meeting.

Um board member Sahiva, do you mind reading us uh leading us in the pledge?

Yep.

A pledge of agents to apply of the United States of America and to republic for which it stands one nation, under guide, individual delivery, just for all.

Oh, God.

All right, meetings call to order.

Let's go ahead and do roll call.

Yes, good evening.

Um, let's see.

Board member Wang.

Here.

Board Member Sue.

Here.

Board Member Sahaba.

Present.

Board Member Hom.

Here.

And President Cisneros.

Here.

Okay, we have a quorum, and board member Ruiz is absent this evening due to illness.

Okay, great.

Um we have agenda item two.

Any agenda changes from uh staff or nothing from me now.

All right.

Um any non-agenda public comments.

Anyone in the audience here live or online could speak for three minutes or anything not on the agenda.

Do we have any speakers?

No hands raised, no speaker slips.

We have one for non-agenda, Mitch Ball.

Okay.

With construction on the Webster and Posey tube about to begin, Alameda will likely be facing high traffic congestion in the next few years before the Oakland Alameda Access Project finishes.

I work in between these two tunnels and often pass by the congestion uh that already exists when I bike to and from work.

The city's made meaningful progress in enabling people to use other modes of transportation in recent years, from bike lanes to the water taxi, and vehicle miles traveled are reducing.

However, there are still ways that people are being artificially incentivized to use cars, and the city can end these incentives by simply enabling enforcement of a 30-year-old California state law.

For those of you who don't know, parking cash out law has been on the books since 1992, but often goes unenforced like it is here in Alameda.

The intent of this law is to prevent employers from subsidizing car use more than uh they subsidize any other modes of transportation.

This law requires qualifying companies to offer employees who don't drive to work the ability to cash out their parking space and receive cash or alternative transit subsidies instead, equivalent to the cost of each parking space.

This could be huge for individuals who can't afford to own cars or families who can't afford to own multiple cars.

Additionally, for those who currently drive to work but could use other modes, this could be a great incentive to stop contributing to rush hour traffic and road maintenance costs.

These people deserve to be properly compensated for the true economic consequences of their decision.

Alameda just needs to do two things to enforce this law.

Firstly, adopt a financial penalty for businesses that do not comply with this state law.

The state law explicitly grants cities the power to do this.

Secondly, change zoning to require new commercial leases.

Have their parking unbundled unlisted as a separate adjustable line item in the lease.

This makes calculation of the cost of parking easy and allows businesses to save money by reducing their parking footprint.

Additionally, it also benefits commercial lessers as it allows them to identify land unclaimed by lessees that is prime for infill development in the form of new jobs, homes, and property tax revenue.

As you're all well aware, we have huge swaths of asphalt all over Alameda.

Much of this goes unparked and is for all intents and purposes vacant land, but just hasn't been formally recognized as such.

Unbundling parking is not a radical policy and is in fact already required of all new residential development in most of California.

Alameda can go farther by requiring that all commercial and residential leases in Alameda on development, both new and old, offer only unbundled parking.

It's not fair that tenants and employees who don't or can't drive are made to pay for parking that they don't use and don't want.

It's a distortion of the market that encourages speculation of effectively vacant land.

Unbundling parking, an enforcement of parking cash out law, reduces car congestion, protects the environment, encourages new development during a housing crisis, doesn't have any high construction costs, and instead actually increases tax revenue and provides financial relief to the city's road maintenance budget, as well as Alamedans who need it the most, and so should be implemented here in Alameda.

Thank you.

Thank you so much.

Any other speakers?

No more speakers.

All right.

And with that, we'll go ahead and close the non-agenda public comment.

Moving on to the consent calendar.

I think we'll go one by one since we have it sounds like various attendance for each of the meetings.

So for agenda item 4A, the meeting minutes for May 27th.

Do we have a motion?

Motion to approve the May 27, 2025 meeting minutes.

Okay.

And do we have any abstentions?

Any absences on that day?

Well, yeah, second.

I'll, yeah, you need a second.

Uh I'll second the motion.

Okay.

Okay.

All right.

All those in favor?

I oppose.

And no abstentions.

Great.

Um 4B, draft meeting minutes for June 23rd.

We have a motion.

I move approval.

Okay.

And do we have a second?

I'll say.

Okay.

Any abstentions or absences?

Okay.

See none.

All those in favor?

I oppose.

Okay.

That passes.

Agenda item 4C, July 28th.

Do we have a motion?

I move, I guess.

Alright.

And do we have a second?

I'll second.

Okay.

All those in favor say aye.

Aye.

Oppose.

Any abstentions?

I need to abstain.

I was a present.

Yeah, I think I don't think I was there either.

Okay.

Do we still have a quorum?

We do?

Okay.

I can't do math.

All right.

And that passes.

Um great.

And then we have this um planning board 2026 meeting schedule.

Um, I guess um, do we just if if we have like any issues, we could raise that.

But I think um it's fairly straightforward.

It's uh primarily your regular schedule.

Um, there are a couple of um, well, there's one meeting that's on a Tuesday instead of a Monday due to a holiday, and then we have our August recess, so there's no meetings listed there, and then we have uh the November and December holidays, so there's only one meeting in those months.

So that's fairly routine kind of calendar.

This is just an opportunity for you to to adopt that, and then it will be um used throughout the year.

Okay, great.

You can always uh cancel a meeting or schedule a special meeting as needed.

Okay, great.

Thanks for the voiceover.

Um, do we have a motion?

I'll move to approve the planning board meeting schedule for 2026.

Thank you.

Do we have a second?

A second.

All right, all those in favor say aye.

Opposed, and no abstention.

That uh motion passes.

Great.

Um, and do we have any public comments for the consent calendar?

Seeing none.

Okay, moving on to regular agenda item, which is a workshop to discuss the inclusionary housing ordinance.

And see, we have staff presentation.

Good evening again.

Um, I'm Steve Buckley.

I'm the Planning Services Manager, and I'll be making the presentation tonight.

Um, this is uh an update to the board on the inclusionary housing ordinance update, which uh you've uh discussed twice in the past in January and in May.

Um this was just uh sort of a check-in before we go to the city council to give them an update as well.

Uh there's uh a little more uh feedback from uh the development community, and we want to uh acknowledge that um feedback and the work of the subcommittee, including uh city staff and board members, and the consultant team.

And so this is just sort of a refresher and update on some of the concepts that were moving forward with the council, and then we'll come back to you with more specifics.

So, as background, in January we met and we talked about the scope of work and the concepts that were going to be analyzed, looking at the issues, and this was some of your feedback that you you agreed that there was a broad need for housing in Alameda, obviously, and that there might be a difference between rental and for sale, that we were going to introduce a more broad-based fee program, and that those should be adequate, make sure that we're they're adequate to actually fund units that would no longer be provided by developers in those options.

You could either opt to provide the units or the fees, but the fees should actually cover some, you know, an adequate amount of cost, that we might want to incentivize, in some cases, on-site units, and in other cases uh note that uh units could be provided off-site in clustered projects, or that the fees might be preferable to kind of balance our approaches with public-provided housing, nonprofit provided housing, and developer provided housing.

Um, and so there was sort of this all of the above approach that was that was noted.

Um, and uh also a little bit of concern that buyers needed to be well aware of what they were getting into in terms of the equity that they might accumulate versus the limitations that they might also face in terms of the um resale value and equity sharing with the developer and and the city.

Um in May, that sort of same issue came up in terms of what are the programs for for home buyers, making sure that all of the information was clear and up front that those needed to be real homeownership opportunities that would that would benefit those buyers.

Um we talked about kind of the the ways that we would distribute the units through different income levels, um, making sure that those units were also fairly distributed around the project and around town, and um that we could cluster projects again with nonprofit developers as partners.

Um there was also more discussion about fees and how they would be calculated per square foot rather than per unit as a more sort of evenly distributed kind of cost distribution and that we could consider perhaps some more local preference points, which I'll note we we actually do have already for local residents, local workers, and school district employees.

So some of these things that you discussed were sort of already in the program, and some of them helped us refine our further work.

Um of the context that we've been working under includes the the Palmer Fix, which was a law passed uh several years ago, AB 1505, that talked about uh re-establishing uh inclusionary rental.

There had been a period of time about a decade where inclusionary was considered a violation of the Costa Hawkins uh law, and so we were excluded from requiring on-site inclusionary rental.

Um, but this was reauthorized with an assumption really that 15% could be provided at low income or 80% AMI, is kind of a typical approach to inclusionary housing, and HCD has sort of endorsed this through the housing element process.

So that's one of our baseline assumptions.

Is that's kind of a good ballpark figure to aim for.

That was actually affirmed recently in the OBAG 4 funding program, which is a ABAG MTC program region-wide housing and transportation and environmental program.

And they also kind of set this baseline assumption maybe 15% at low income is a good ballpark.

If you go above or below that, you're going to need to kind of justify that to us as feasible or infeasible.

And that's that's become another standard rather than a strict nexus study of what's the impact and what's the mitigation.

There's also this other idea of what's what's a development project, a typical development project actually capable of providing, and without stymieing all development.

So we're working under these two ideas of nexus and feasibility, and also a default sort of assumption of a hundred thousand dollars per affordable unit that maybe instead of providing one of those affordable units, they provide a fee, and there's a one-for-one kind of trade of at least a hundred thousand dollars per unit as an assumption, and then you can work off of that higher or lower based on your study results.

All of this is acknowledging the current development cycle that we're in, with very high construction costs through labor, materials, financing, and land values, and so we're trying not to upset the apple cart too much, and so what another one of our assumptions is just that we're trying to work from what we currently require, which is 15% distributed throughout a range of income levels, and what is kind of an equivalence that we could do that doesn't cost the developer anymore, also doesn't leave us with more of a housing burden, but but try to kind of find some middle ground that's that's roughly equivalent.

So that's the kind of work that we've been doing in the past few months, working with our consultant and the OBAG program, they have put out their own financial analysis tools, and so we've sort of been playing around with that to see well, how do these numbers really work for Alameda?

So we have our various uh income levels that are part of the program, right?

The very low, low, median, and moderate, and they come with different income levels based on our area median, which is a countywide median, and so you can see for $160,000 household income, you would qualify as median income.

Your anticipated maximum rent would be about $3,600 a month for a three-bedroom.

So a four-person household fits in a three-bedroom household uh unit, similarly.

Uh you know, a three-person household would fit in a two-bedroom unit, is kind of how the the calculations work.

And then you have a sale price if you were to buy a condominium, typically in Alameda.

Um, and so you can see there's a fair amount of subsidy on those sale prices.

Um, and that's one of the distinctions that we see is the rents track kind of close to market in some cases.

The sale prices really don't, and so we we're gonna see a heavier subsidy on the condominium townhouse kind of developments, and the rentals there is a fair amount of subsidy at the very low and low, but the moderate really not so much or at all, and so we're trying to adjust for those variables.

So, what you see is really different outcomes for the fees in particular.

Um, but what we've been playing with is kind of the rental inclusionary, starting with rentals, um, looking at the existing is 15%, but it's distributed over three different income levels, and as I said, the the new baseline from uh OBAG and from AB 1505 is 15% low income.

So we thought, well, that actually does a lot for us because the very low income is often provided by the nonprofit developers.

They do very low-income housing.

The moderate income isn't really doing much for us because of those income and rent levels, and so what if we just focused on low income?

And so that is one option, and that's our recommendation at this point is that that's a good starting point.

Everyone agrees that's a good starting point.

But you know, why not have some options?

We could have a sliding scale, or we could just have a couple of other options that are available.

And so this is where we have some new numbers.

I know we've talked about this before, but these are some slightly different numbers based on some new math from OBAG.

And so we have a five and five split between very low and low, or we could go all the way to all very low income, and that would be eight percent.

And those over on the far side, you can see the cost per square foot.

Those are sort of the inferred costs to the developer.

And so they're they're all kind of in the ballpark, plus or minus 10%.

Um, and so that's kind of our goal is to keep those equivalences.

Um right now, if it costs them eighteen dollars to meet our current uh inclusionary requirement, we could we could go plus or minus around that number.

Um, and these are calculated as a uh a monthly subsidy per square foot of the project.

So it's it's kind of like if you had a hundred unit project and they reach a thousand square feet, then you have those sort of round numbers to work with, and you end up with um cost per square foot based on that subsidy.

So then if we go to ownership, similar math, but instead of focusing on low income, we could focus on the moderate income.

And here we're talking about cost per cost per unit rather than per square foot.

It's just another way of calculating it in those spreadsheets that we've been provided, and these are the cost at the time of sale, so rather than a monthly subsidy that's ongoing because a rental, you know, they're they're they're looking at their long-term return on investment versus condominiums.

There's a one-time sale, and that's when the developer makes their money, and so that they've they've framed the conversation around that one time cost per unit.

And so here we've got some other options, and all of these options are less expensive than the current program, um, recognizing that right now it's very expensive uh to meet our program with for sale housing, so a little a little less, a little discount with this math here, and so we've got several options in our suggestion as well.

We might prefer one over the other, but any of these would actually be roughly equivalent.

So maybe all of them could be offered as options, and then we have um the fee, so those those were inclusionary requirements with a sort of rough cost estimate, but these would be actual fees that we would collect at the time of uh occupancy of the new buildings, and so um our current fee is only available for very small projects.

I know you know this, but just to rehash a little bit of the baseline assumption, um, it sort of works out to about 2750 a square foot, um, which is again a fairly high fee, but it in relative terms, um it's it's kind of in the ballpark of most cities in the East Bay, and so um we're suggesting that you could um go a little higher or a little lower and still be in the ballpark of of what might be feasible.

We still haven't actually done the feasibility study because our consultant told us nothing is feasible.

I mean, if you do the feasibility study, very few projects pencil these days, so it doesn't tell you very much to get a a negative answer for most rental projects.

Four sale projects tend to be a little more feasible these days, and we see that around town, we see more townhouses being built.

Um, so we don't think now is a great time to do a feasibility study.

Um, but relatively speaking, um, we think that we could at least advance the idea of having a an in-lue fee, and we might need to do more study to actually set that fee, but for now, um, we want to frame the ordinance and then have the fee set by resolution by the city council at a later time.

Uh we've also talked about clustering before, and so um, you know, we've come up with some of the criteria that would be required for um a developer to propose a clustered um project, um, which I think you've seen before and is in the staff report, just that there would be a sort of a review process um that would have some some criteria, uh, particularly that we want to make sure that if we're just paying part of the the cost of the clustered projects as a subsidy, that ultimately that project is going to be competitive for other funding so that we actually see those units sooner than later.

And then we talked about the term of affordability being extended to the life of the project.

Um with that, I just wanted to give you that update.

This is what we're gonna be presenting to the city council.

Wanted to see if you had any feedback of you know, are we on the right track?

Um, did we miss something that you really want to have presented to the council?

So that's our next steps.

Great.

Um thank you so much for the presentation.

Um let's see.

Um I think we'll uh open up for clarifying questions um before we open up for public comment.

Um does anyone want to start?

I have a question.

Vice President Edison.

Um thank you for the presentation and for all the work.

Um I am wondering in the term for affordability, is there a reason why you cannot make it um in perpetuity?

I I don't think so.

I mean, I think 99 years is kind of meant to be.

I we also say for the life of the project, which is kind of in perpetuity.

Yeah.

For the life of the project, meaning as long as the building is standing kind of.

Right.

Got it.

Um that's it for now.

Um, board member Hamas, I think.

I'll try and on that as well.

Um, there is a rule of law called the rule against perpetuities, and so you you typically can't um impose something um in perpetuity.

So it's but a ninety-nine-year um term is acceptable, and other cities have done that.

Right, but it's different to say a 99 year than uh for the life of the project, right?

Yes, definitely.

And and for the life of the project, I mean a project could be 20 years, and then maybe they choose to redevelop.

So that certainly is a policy discussion for you all uh to decide whether you which of those you recommend.

So in other words, it it's kind of about how you word that part of the policy so that you make sure that is at least what you want it to be kind of.

Yes, absolutely.

And and you could say um worded as um, you know, 99 years, um, or word the life of the project, whichever is more or less, depending on the policy.

Well, whichever is more is what we're trying to look for, right?

Okay, thank you for the clarification.

Uh one overhaul?

Yeah, yeah.

Thank you, Steve, for the presentation.

I know there's been a lot of work and discussion on this whole ordinance and is a very complex issue.

Uh bear with me because I do have one question just because this is an area that I've consumed some of my time doing.

First of all, in the policy background section, there's a sense sentence that says concentrating the requirement at the low income category, better targets households with the greatest need in alameda and provides the most public benefit for each unit produce.

I have a question about that, just puzzling about when you really about the need.

Housing element certainly identifies a much larger number of very low income units that are needed in Alameda, if you believe the arena numbers versus low income units.

So that suggests to me that very low income units, there's a greater need in Alameda for those units, unless we have projects in the pipeline that will substantially satisfy that very low income need.

So can you clarify that sentence or maybe explain a little bit more?

Yes, thank you.

I I believe there is a a good pipeline of projects, and I think that was the idea is that there is um I believe about 1200 units that are managed by the housing authority, and there's um about uh talking about future needs.

Yes, yes, and there's about 200 units that are in the pipeline right now in North Housing, and um there's um other projects that have been uh developed um as part of the um site A and West Midway projects, where there are still 500 units in the pipeline um for um various populations, including uh seniors and uh veterans and and uh formerly homeless.

So I think there's there's a diversity of needs, and I think there's a diversity of of units already in the pipeline at those levels.

That kind of helps explain because the arena certainly identifies much stronger need for the very low income.

So it's great that there's many of those projects in the pipeline.

Uh one of the things the staff report talks about is that ABA the re 15% requirement for inclusionary units, you know.

So I guess one of the questions is there's an option, for instance, for I think it's the uh for sale ownership units of allowing an option, oh no, excuse me, for the rental units, um, instead of 15% very low, an option option two of five percent very low and and five percent low income.

If that option were offered, would that can be considered compliant with a bank policy as long as you also allow for option one?

Just wanted to make sure whether how definitive that 15% is.

Yes, thank you for that question.

Um that's exactly our intent.

Um, and that's why ABAG produced those uh spreadsheets is they wanted agencies to be able to demonstrate compliance through options, and so if you start with the baseline assumption, um any other program that you might um develop should be at least equivalent.

Equivalent, okay, okay.

I just want to make sure.

And um, the other question, and you kind of covered this in the staff report, but I have a question, is you we're proposing for rental units to be based on per square footage, but for sale units on a per unit basis.

I'm kind of wondering why uh only reason why you know is I know the mitigation fee act, for instance, doesn't apply to affordable housing requirements, but that state law requires um residential units to be based on proportional size of the unit uh and per square footage is what most cities are adopting.

And the rationale for that is that you know, a large unit, say three or four bedroom unit, would not be charged the same fee as say a studio unit or one bedroom unit.

So it so to remove the disincentive for smaller units, state law, at least for impact fees requires a per square footage.

So was there thought, maybe of having the for sale units also be based on square footage?

Ryan, could you go down two slides?

Maybe another one.

Um, right.

Sorry.

Let's see.

There we go.

Okay, so I may have misspoken or didn't explain it well, but um the the numbers that I had per unit were the developers' cost of current compliance is about $10,000 a unit.

That's that's what a developer is currently subsidizing across the project.

So if there it's a hundred unit project, it's a $10 million subsidy.

It's a hundred million dollar project, it's $10 million subsidy.

So that's a per unit calculation.

Our fee proposal though is per square foot.

Oh, so we're trying to sort of back into a per square foot based on average unit sizes.

And so that's where the 25 and the 50 show up.

Okay, yeah, thanks for clarifying that.

I think I missed that point.

Um and then I do have another question.

Um I know that one of one of the things we're trying to do is as a baseline having any proposed you know, ordinance amendments generally uh be similar to the financial impact of the current ordinance.

I don't know if that was kind of one of those baseline working assumptions.

So when I look at table three, does all of those options options one, two, three, and four, does all those options basically um are about the same or less than what the existing ordinance requires as far as financial impact.

The reason why I asked that is that option one, the all mod option is 15% units, but then you see um I think option four, which is called a high mix option is five percent low income and ten percent mod.

So I guess my question is is option four still generally equivalent to the existing ordinance physical financial impact.

Yes, um, the table three that you're referring to is in the staff report.

Yeah, I've I've supplemented that table here for the presentation.

I realized that it didn't exactly explain how that worked out, and so I've added the farthest column.

Right.

So the existing compliance cost a developer about 10,000 a unit.

Okay, we're trying to stay under that in every case for ownership.

Okay, so all four options are still under what the current requirements are, according to the model.

So recommendation is based on this model is uh slightly reducing the inclusion requirements for the for you for four sale units, okay.

Yes, um, and just to be clear, um I know there's discussion of um loop fees for non-residential projects.

We're not touching those as part of the ordinance amendments, right?

That's right, okay, okay.

Just want to make sure.

And um, let's see.

My last question is um in reviewing the letters that we received, which I appreciate the feedback that we're getting from the development community, uh I think some of the letters mentioned that some cities have actually reduced their inclusion housing ordinance fees.

And I guess my question is to what extent the staff is staff finding that to be true?

Uh or given the economic times, more that cities are just temporarily reducing them to respect to allow projects to move forward during the these and more difficult economic times, but the ordinance requirements remain the same.

I'm just kind of wondering what you found when you've checked in with other cities.

Yeah, I think anecdotally um throughout my career I've seen cities reduce fees during downtimes.

Um the challenge is to know when to reduce them and when to bring them back up to standard levels because you're always sort of chasing the market, and um sit you know, governments are notoriously slow at doing that.

Um, and so it has its place, and I think the other consideration is just is that really the deciding factor that will spur development?

Um it's certainly one.

Yeah, and so it it may not result in a complete turnaround, but it it might help uh some of the recovery no I agree and I have some thoughts about that that I I can share later.

Thanks.

Thank you.

And so sorry no I'm uh I suppose it takes uh step back and makes these for others but I did have like a burning like follow up question it seems like a really weird one but I mean I'm wondering if like you've seen like other cities maybe um I think of like adjusting to inflation you know so that the fee is set and then when the market is great it's at one rate and when it's doing bad like a most like reverse CPI right so I'm just throwing it out there as like you don't have to respond right now um I do want to get to others questions but I'm just gonna plant that seed um uh board member Sahiba.

Yeah thanks for the uh presentation on this I did have a question you described that you know currently there won't be a feasibility stunt study done on the um current state because of the results of that feasibility study but how did we how how is it determined the $25 square foot and $50 square foot um fee structure what was what was le in in the inlu fee options how how how did those numbers come about um just curious.

Yeah so we've talked about sort of the policy options of do you encourage fee payment or encourage unit provision um and assuming that that's a more of a policy discussion than a technical one once you're sort of dealing in in the realm of reasonable ranges um what we see um is that currently a developer is paying about 1750 a square foot for a rental project to comply with our current requirements um if we raise that equivalence in the in our policy we raise that equivalence to 25 they're less likely to pay the fee there may be cases where they'd pay the fee just because it's easier um but they're more likely to provide the units and that was a policy direction that we heard that we wanted on-site units in these projects um I think for the for sale units we we adjusted the other direction if currently it costs about sixty two dollars a square foot for a condo developer to comply with the current inclusionary um we thought well maybe we can encourage a little more fee payment and fewer units um or just recognizing that that's a really big number at sixty two dollars maybe that's just too much and we could ratchet it down a little bit um so these are round numbers they're not precise in any way they're just sort of round numbers of that policy balancing of higher or lower.

Just a follow up question but uh the recommendation is these precise numbers though right or are you saying they're just an indicator of the direction um that the numbers want that is being recommended that the numbers move in but the order of magnitude of that movement is um is reflected in this or is uh it is still to be determined I I'd say it's the latter I think it's it's an indication of a policy direction um we're not recommending that anyone set a fee today um or in the very near future because we still need to work out what is the ordinance how is it established and and then the council would ultimately probably adopt a separate resolution and um base that on other findings.

Okay.

Understood thank you.

Um board member Wayne.

Yeah, thanks um and thanks for the presentation um I've got a question about the um TOC in LU fee um that you presented in one of your earlier slides.

I think that was the first time I had seen that.

So our proposed in LU fee structure currently is that it it would be applied against all residential square footage in a building, right?

So it it would essentially be all leasable or saleable or habitable square footage in the entire building.

But I think what I'm seeing here on the TOC is that the default inLU fee structure is that it's a hundred thousand dollars per affordable unit not provided.

So it's a different basis from how our inLU fee is structured, right?

So it's an interesting, yeah, baseline.

Uh they said you should set a per square foot fee because it it adjusts with unit sizes more equitably so it's spread across the whole project.

So you might have some studios and three bedrooms, and those fees are just per square foot.

What they're saying though is we want you to at least collect as a result of that, based on your average square foot of if your average project at least 100,000.

So they have a spreadsheet where you figure that out.

And so you could plug in a particular project or a model project, and we just did a model project.

Okay, and I'm just noting that our fee is against the entire building, whereas this is this one is against affordable units not provided.

So it would be essentially the 15% that you aren't providing as BMR.

It's um not quite that simple.

So because they take the 15%, they they have depending on what price point you're trying to hit and how many percentages they back into what the net fee should be to get a hundred thousand dollars per unit.

So it's it depends on what your program is.

If you're only requiring 10% inclusionary, you're gonna have a different per square foot fee.

And if you're requiring 20% inclusionary, you're gonna have a different per square foot fee.

It's um because you're trying to hit a different result.

Okay, but high level, it's the result is meant to be equivalent to what's on the screen here.

Okay.

Yeah, at least.

Okay, at least.

Yeah.

And the theory behind that 100,000 is that you would then leverage that with a nonprofit developer or or a local or a you know, city um agency to accumulate other grant funds, tax credits, and you know, rent credits, and essentially come up with 700,000 or you know, a million dollars to build a new unit that would be that equivalent conclusionary unit.

Yeah, yeah.

Um that makes sense.

I I mean what I what I was keying into here is something we can get into, I guess, during the commentary section is uh I sort of did a bit of napkin math and applied this to our to a very very simple like 100 unit project, and this seems to come out lower than our proposed $25 uh per net square foot.

So I'm just I'm just noting the difference between their sort of minimum threshold and the number that we're recommending right now.

Um another question I had was um having having watched the discussion from the May workshop, I I did like board member Sue's idea of addressing some of the moderate income housing that hasn't been leasing up that's currently on the market.

So I'm just wondering if you've been able to uh explore that concept any further um and just think about thinking about how you might mature that at a at an implementation level.

Yeah, we've actually been in conversation with one of those property owner developers, and um unfortunately right now the ordinance that we have in place doesn't empower anyone to actually do that trade-off.

Um and so we wanted to actually bring forward a an amendment to the ordinance maybe sooner than later to uh allow that sort of trade-off, and then perhaps use one of these spreadsheets or some other tool to um figure out what that equivalence would be so that they could fill those units sooner.

Okay, so in other words, rather than include that amendment in the current update to the inclusionary housing ordinance, you're considering a kind of strategic amendment to the current ordinance to try to move these units faster.

That would be another way to do it, yeah.

And that would free up again, say they have 10 vacant units.

We might get some number of VLI, some number of LI, and then they would still retain some market rate out of those 10.

Yeah, to make up the difference.

Yeah, okay.

Um this next question is responding to some comments that we got in our correspondence.

I was curious whether you might um I think we don't have street level tonight, right?

No.

Okay.

I'm I'm curious whether you might, um, based on your experience be able to comment on the concept of applying in loop fee to projects smaller than five units, merits or demerits.

Yeah.

Um sometimes there's a sliding scale for smaller projects, um, and sometimes there's a waiver, and sometimes they pay the fee.

Yeah, so there's all different approaches.

You don't have a you don't have a view here.

Sorry?

You don't have a view here where the current ordinance starts at five units.

Personally, I think everyone should pay the fee.

That's a policy decision.

Okay.

Um we also got a comment from the owner of South Shore.

They were very um circumspect in their feedback.

I think I'd be curious whether you might be able to share with us.

I'm assuming they've been giving you feedback offline, and I don't know if you are ready to share that or they're not they're ready to share that, or they're not ready to share, obviously, but I'm curious if you might be able to enlighten us.

Um I don't know that there's any particular direction.

Okay.

It's it's very conceptual.

I think they're just curious what's happening here.

Okay.

Um last question is: do you know this is a little bit on the margins, but uh do you know what happened to the Hawthorne Suites conversion project that was contemplated a couple years ago?

Nothing more than was in the paper.

I I think they just couldn't pull the financing together.

Okay, that was my understanding as well.

All right.

Um I think the only the only other question I had um has to do with maybe trying to partly a question, partly a comment has to do I think with understanding, I guess the overall efficacy of some of these um income tiers that we're contemplating, and so in in particular with regard to ownership units, because with ownership, unlike with rental, I think there are a lot of numbers that occur outside of the table that we look at, right?

So there's in addition to the purchase price, there's the monthly HOA, and then in some of the develop developments in Alameda, we've got layered on top of that a CFD tax.

And so it becomes very interesting, I think, to then think about whether you're looking at very low income or low income or moderate, how those things for any sample project, right, stack up for people of a particular income, which uh to me kind of raises the question of is the low income tier or very low income tier, but particularly the low income tier, is that even uh a worthwhile product uh for the people who are buying it, they they may enter at a particular purchase price, but then their monthly burden of the HOA, which is the same as the market rate condos or townhomes, and then the CFD on tax on top of that, does it does it even make sense, right?

Um so I think that was a little bit of the discussion that I had uh a little bit of trouble keying into because we don't really have visibility into how that the finances might stack up for somebody in those income tiers.

Um so I think seeing maybe some sample alameda projects might be helpful for that um I will just say yeah uh that's that's partly reflected in these prices um the the guidelines for um ownership um inclusionary for the city of Alameda uh there's a whole handbook that's 25 pages and it includes reference to these kinds of costs that need to be factored in before you set the price but I take your point that there's still a burden that's an every month kind of burden.

Yeah.

Okay.

Um thank you.

Thank you.

Any other questions?

Yes uh board members um thanks for the presentation and update I just had one question on this um so you know with the moderate income you know it sounds like with the rentals a lot of the units are sitting empty because they are more expensive than what the market rate is that correct basically that's our understanding yeah um and looking at I think this table um that seems seems right or kind of right around there um is it is it possible to like just take the moderate category and say you know I think there's an equation obviously for how you set what the maximum rent is for each income level can you just go with my take the moderate one and say okay we're changing it to we're gonna lower it to make it you know so that it really is you know not that it really is so that it becomes lower than what the market rate is and then we'll allow people with moderate incomes to then you know find those units and rent them.

Yeah I think the developer operator would have more to say about why they don't do that.

Yeah.

Could you elaborate on that?

I think you can ask them they're here.

Okay well that's that's that's all I have um uh yeah thank you um to my fellow board members I I think I my questions are all jumbled but um let's see um one question I had um I understood more the logic for the 15% for the recommendation for the rental uh 50% at 80% AMI because the 50% is being met by our partners at the housing authority um and you see a pipeline there um I'm uh it's not as clear to me the reasoning behind the recommendation uh for the ownership inclusionary the 15% at the split for moderate and low income um like are are we seeing the low income units getting um leased up and traction there and I bring it up just because I think I remember from the report one of the recommendations being 20% at moderate so it just seems like a big gap between what staff is recommending and um what I saw in the the background analysis.

Yeah um I think again you know any of these would be roughly equivalent or or less expensive so they're all sort of feasible in that sense um the split in option four was intended to um include recommendations from our um housing and human services department um who they believe that the low income units are meeting a need and that they are feasible for some households, and so they wanted us to include that as part of the recommendation.

Okay.

And they're the closest to it in terms of leasing projects up with candidates.

Okay.

Got it.

Yeah um and just wanted to make sure like there was like that um market there, I guess, if that makes sense um uh got it.

And then um going back to the rental inclusionary.

From the staff report, and here the recommendation is 50% low income, but I also like saw on the table or all of the above, right?

So that's I I think I talked about it before, like potential like a dialing option where the applicant could stay at the 50%, or they could choose 8% of very low income.

So there's more of that flexibility.

You're offering that as an option for us to consider.

Yes.

Okay.

And then I guess also going back to the report.

It's did suggest 4% at very low and 6% low.

But here you have, and that would get to the 10.

And here you have five and five is the reason why because of the TOC spreadsheet calculation.

Yeah, I think just um trying to pick round numbers, it could be adjusted in so many different ways.

Um so yeah, four and six might be the same as five and five.

I don't know.

It's close.

Okay.

Yeah.

It's such a small thing, but I I was just wondering how much of this was based off that report versus like this TOC calculation, which I um appreciate because like it would lead to future funding.

So if if that's reasoning, that's totally fine.

I just wanted to better understand the logic.

So great.

Um trying to can you go back to the slide with the ownership inclusionary, uh, excuse me, the ownership and loofee.

Um should have this in front of me.

Okay, so um the like what's the for the for sale right now.

Um I'm guessing I'm getting a little bit confused with like the cost to the like the burden to the developer and what that pricing would be.

Is it $50 uh per square feet?

Or yeah, that's the idea.

Yeah.

Whereas today, again, based on a model that we've been kind of using um with all the assumptions that we have to make, um it's roughly sixty-two dollars today.

Oh, okay.

If they provided the four, four and seven with those subsidies based on that pricing.

And so based on, you know, new pricing, but also just on the policy of you know, do we emphasize fees or do we emphasize units, um, and just sort of the equities of rental versus ownership.

Um, these are some numbers we came up with.

Okay, got it.

Um yeah, thank you.

I just um oh yeah, board member home.

Yeah, yeah, your question just triggered another question in my mind.

I remember reading in the staff report there was a question you probably could easily clarify it, whether you know, this per square foot charge is for with either rental or for sale.

It uh is applied to livable area, not to like garages and things like that.

Correct.

This is the net square foot of residential.

Yeah, yeah.

I just thought I'd just ask that, because that came out of the question.

Okay.

Okay, I think yeah, those are all my clarifying questions.

Um I think we could go ahead and uh close up and we'll have it open to public comment.

Thank you.

If anyone online wants to speak, please raise your hand now.

We have two speakers in person.

First one is Andrew Rosenberg.

Good evening, planning board members, and thank you, Steve.

I know there's been a tremendous amount of work that's put forth in this very important topic.

I'm Andrew Rosenberg with Pacific Development.

And over the past several years, our team has led the entitlements in the development of the Alameda Master Plan.

Pacific Development delivered the launch project in 2023, which consists of 368 for rent units, which was the first phase of the total of the Elmita Marina Master Plan.

I'm here to ask the planning board to recommend the implementation of a $10 per gross square foot in Lou fee as part of the inclusionary housing ordinance.

And once built, this project will complete the entirety of the 801 units at the Master Plan Alameda Marina.

And as stated in the street level advisory report and what was mentioned shortly earlier, medium density projects are simply not financially feasible right now in today's climate.

This is due to high construction costs, large impact fees, tariffs, increased financing, high operational costs, year-over-year increased insurance, and of course property taxes.

And as a quick reference, some of these costs include, you know, seawall, bay trail open space improvements, Clement Avenue public improvements, off-site construction, adjacent commercial parking lot improvements.

Uh there's very important environmental remunation costs associated, which uh includes sea simple property as well as some city tideland parcels.

Um then, you know, finally, as you can imagine, in Alameda, there's significant soil stabilation costs that are associated with uh very shallow groundwater.

Um this project specifically uh cannot support an on-site BMR requirement.

Uh we've studied this countless times over the past 11 and a half months from all models, um, and even the current what's being proposed uh in the current staff report uh from options two and three, which was the 5% low, five percent very low, as well as a flat eight percent very low income.

Um and for the reasons I just mentioned, truly the only viable option for this project alone is an in Lufi.

Um and we've confirmed that this project truly is financiable uh with a ten dollar gross per square foot of the residential building.

Um this would equate to roughly $2.5 million of an in LU fee.

Um, and it is equivalent to a cost per unit, it's roughly $55,000 per unit.

Um the foundry is truly shell-ready.

We're committing to building this very important housing project on the island, but we do need the inclusionary housing ordinance uh revised so we can build this next spring.

Thank you.

Next speaker is Mitch Paul.

Hello.

Inclusionary zoning has some good and some bad.

The good is that it produces housing for a portion of people who could not afford it otherwise.

The bad is that it makes the financial feasibility of housing development less likely.

Reducing the amount of home is being constructed.

This reduction of housing supply raises the cost of market raising housing higher.

The recommendations within this report do a good job reducing the bad by allowing greater flexibility for developers and increasing the good by selecting affordable homes that better fit residents' needs.

However, I would like to strongly encourage the addition of a fifth recommendation to change the per unit exemption to apply to ADUs and developments of two to ten units, which I acknowledge is different from my written comment, but I believe it captures the same uh concerns.

For context, I'm someone who experiences the bad of inclusionary zoning.

I make too much income to qualify for below market rate housing, so I must rent a market rate one-bedroom unit within a six-unit building at two thousand four hundred dollars a month.

My rent is this high because of the artificially constrained supply of housing due to in part by inclusionary zoning.

And to an extent, I am okay with this.

It's reasonable for the middle class to pay for a little more to help out those less fortunate.

What I am not okay with is that people wealthier than me aren't contributing.

Well, ADEUs and missing middle housing of two to ten units can modestly increase density in the limited land available in the Bay Area and provide housing affordable to the middle class at market rates.

Single unit housing does neither.

The only people who can afford to buy a new single unit home in Alameda are those in the top one percent of income or those who've received a large inheritance.

If only the wealthiest people in Alameda can afford single unit homes, the least dense form of housing, why are these homes exempt?

Unfortunately, I believe I know the answer to this question.

One of the wealthiest people on earth, Warren Buffett has brought attention to the growing source of growing income and wealth inequality by announcing that he pays a lower effective tax rate than his secretary.

The reason why the rich keep getting richer is because they have influenced government so that the wealth transits from the middle class to them.

This issue does not just exist because billionaires have influenced the federal government, it also happens here in Alameda because millionaires have influenced the municipal government.

The majority of Alamedans do not own homes, and yet traditionally most who have come to publicly comment on planning board and city council meetings are single unit homeowners who benefit from an artificially constrained housing supply, which raises the value of their homes.

This is why the first inclusionary zoning policy in 1974 excluded single unit developments decades before the term missing middle was even coined.

However, this municipal government still has the opportunity to be fair to all Alamedans.

In addition to the four proposed recommendations that address some of the flaws of the current inclusionary zoning policy, I urge you to address the largest and most significant flaw and add a fifth recommendation to remove this loophole for the wealthy, or else remain complicit in the government-sponsored transfer of wealth from the middle class to the wealthy.

Thank you.

Thank you.

We have no more speakers.

Okay.

And with that, we'll go ahead and close public comment.

Um, bringing it back to the board for discussion.

Anyone in the front?

Uh board member Hahn.

Sure.

I'll offer my comments.

Um, first of all, I want to commend the consultant and staff for a lot of excellent work.

And it really shows from the, you know, being part of the committee from the from the initial discussions to the current proposal, shows a lot of thought and and uh considered all the pros and cons of it's a complex issue, it's never one right answer.

Every city deals with it differently, and cities have different economics also.

For instance, that A-bag number is a Bay Area-wide number, and generally inclusion and housing requirements are higher for more affluent communities versus where construction costs are higher versus outlying communities where construction costs are lower.

So I could see that's a minimum, but that doesn't apply universally across all communities in the Bay Area, so I uh just want to mention that.

Um, I I want to first acknowledge that I should have acknowledged first.

I did meet one disclose that I did meet with the developer of the Alamina Alameda Marina project, uh Pacific development.

So, and we discussed the potential impact of their inclusion housing recommendations on their project.

Um I think the current ordinance has gone a long way at addressing some of the issues or the problems with the existing ordinance.

Um, it it really one of the bottom line uh criteria that I know we would were using was keeping the fiscal impact of the given the economic times, not necessarily making these projects feasible by lowering the fees because as you mentioned, next to studies showed there's even you've eliminated all inclusion housing requirements, projects, most projects are probably not feasible.

So that shouldn't be the goal, but the goal should be at least not make the requirements more onerous than they currently are.

And so there, but having said that, there's been a lot of positive direction to um kind of adapt the ordinance to distinguish the differences between rental housing and ownership housing, like for rental housing, eliminated the moderate income category, because in most cases is above or slightly below what market rate rents are.

So to me, it I think the recommendation to just focus on very low and low-income rental units makes total sense from market standpoint.

And then conversely, the requirement for very low income ownership units is just very onerous.

You know, when you calculate in the cost or homeowner association dues and utility costs, which all gets used to set the affordable housing price for ownership units, it's just requires a huge subsidy, and uh and many of these homeowners have a hard time even qualifying for financing, even with assistance.

So focusing on ownership housing on moderate and low income in that direction, I think makes a lot of sense.

So that fine-tuning of the ordinance makes a lot of sense to me.

But I also see that the flexibility that's being proposed in the ordinance makes a lot of sense.

Makes a lot of sense.

Most cities do allow for that.

Coming up with the cluster or the off-site option to meet the inclusion housing requirements, I think makes a lot of sense.

I think it's a matter of coming up with criteria, better criteria to define what that is, especially if it's delegated to the city manager to make that decision.

City council might actually, some cities actually require those projects to go all the way up to the council.

But I, you know, I think to me, as long as the criteria is set pretty clearly so that the city manager can make a not, you know, it'll be subjective, but maybe as just as objective of a decision as possible.

Um a couple of comments about feasibility, you know, nexus studies have really emphasize that impact fees and inclusion housing requirements, although they have a huge impact or some you know, significant impact on development, the the current the reason why residential development is not being built today is really driven by economics, you know, the construction costs, interest rates, maybe, you know, who knows what tariffs that's increasing construction costs, the increases in labor costs, financing, increases in vacancy, rent decreases, land cost increases, all those factors combine to is currently impacting the feasibility.

So when someone is saying, oh, if you just lower the the impact fees or inclusion requirement requirements, then project can be feasible.

I mean, that's just not the case.

So to me, when I look at inclusion and housing ordinance, I look to the future that at some point in time projects will hopefully be feasible, and um and and I still think it's really critical that the city really put places priority at providing very low and low-income units.

Um at the same time, I'm also open to given the hard economic times on a case-by-case basis, but not by ordinance.

If there's a project that might say is a trade-off to provide significant community benefits or some city infrastructure arrangements that maybe there's some flexibility can that can be negotiated to adjust the inclusion requirements for that project as a trade-off, you know, but it I don't think it should just be reduced just for natural reasons.

It needs to be for some legitimate trade-off reasons.

So that could be handled either through adjustment to their affordable housing agreement or their development agreement, whatever might apply.

Um, there's a couple of things that that I jotted down that would be good to look into that I didn't see addressed, maybe it has been addressed, but it wasn't addressed in the staff report.

There's mention of setting criteria for the cluster housing development.

I totally agree with that.

It'd be good to see what those criteria are.

Um you explained the feasibility study that will be further done to set what the inclusionary housing fee would be.

I really strongly support that.

I do agree with the general policy direction of setting the in lieu fee for rental units a little bit higher than the cost of building the units, because we I think we prefer, at least I prefer to see the inclusionary units as rental units or as a inclusion required.

However, for for sale housing, you know, having the fee a little bit below the cost of building the for sale unit does provide the incentive for uh in LU fees that can be then provided to nonprofits to build affordable housing projects.

So whatever that fee is, that general policy direction is something I support.

Um the other thing that I think is worth looking into is for the cluster housing option.

What would be the equivalent if if someone wanted to buy up an existing housing project and rehab the units and uh dedicate them rent restricted for 99 years, you know.

What is the equivalent for that?

I mean, we right now we're talking about all new construction, but I think there's a lot of validity about for rehab units that can actually produce a large number of very low income units.

Um I like offering options for rather than adopting one like for the rental, uh, I think the staff recommendation, I believe is like 15%.

Um I like the idea of um offering the ability to do, you know, five and ten say, which is the way how it works out is like two moderate income, two low income units is about this equivalent to one very low income.

So allowing that proportional trade-off, I think makes a lot of sense, and similar with the for sale uh projects.

Um though, based on your analysis, the for sale project, the a five percent very low, no five percent low and ten percent moderate is still below the current ordinance requirement.

So I agree with staff that that using that as the baseline for the for sale units makes sense, and then allowing options to tear off of that.

Um, I do um I am sympathetic to what the speaker raised about first of all.

I should ask, are ADU units subject to inclusion housing requirements?

No, they're not.

Okay, okay, good.

Um I didn't think so.

But I am I I have seen studies that show that smaller projects, you know, I don't know what the right size is, four units or six units or below, tend to be more economically challenging to build.

And in Alameda, where we have a fair number of potential small lot subdivisions, um, maybe thinking, do we want to make smaller projects having the inclusionary housing or the loo fee a little bit less than say a larger project that generally, you know, in in the in the days when all pri when projects were economically feasible, generally the more challenging projects to build were those smaller projects.

So anyway, so those are my comments.

Thank you.

Um, any other comments uh board member Wayne?

Um yeah, so that thank you.

Thank you to staff for for doing all the work this year.

Um it's been really interesting to see this evolve.

Uh really interesting tonight to hear I think the topic of feasibility come up a number of times.

I know it's also in the street level report.

Um, but I do think you know, as we bring this work to city council, I think we should take a position as to what is the remit, you know, collectively as we open up the inclusionary housing ordinance.

So on paper, I think what we're doing with this update is one, we're complying with state law, right?

Uh we're we're providing for in LU and off-site housing options.

Um we're aligning with housing need.

I think this was a lot of the discussion around low income versus very low income.

And we're aligning with the TOC program, which is kind of one of the factories setting this 15% benchmark.

I think one of the things that we are not doing here, you know, in the work that we've done collectively this year, or discussed tonight is addressing feasibility.

So I think if we if we, if that's our position, I think it should be packaged up and noted explicitly in kind of the policy goals and discussion around this work, that we are very much not touching feasibility.

And so everyone should be super clear that $25 a foot, $50 a foot, $35 a foot, it has nothing to do with feasibility because it's not going to move the needle and nothing pencils.

Um I think we need to be super clear about that, because we need to make an explicit decision whether we are trying to make units feasible or we are just not dealing with that, right?

Um that matters because I think we've we've been in a moment for several years now where uh a number of uh housing types, and I think you know mid-rise rental being a kind of bread and butter housing type in the Bay Area has not penciled.

Um, and so for us as uh as a city body to to sit here and kind of make a decision.

Well, we're just gonna punt that and see if you know, see if it kind of solves itself, that's a decision, right?

And another decision is to say, well, we we're as as long as we're working on the inclusionary housing ordinance, let us see what we can do about feasibility.

Maybe it's not the ordinance itself, so maybe it's more along the lines of what board member Hom was saying.

Maybe, you know, in my notes, I had sort of thought maybe there's a parallel package that goes along with this or inclusionary housing ordinance, and you know, call it some kind of uh housing economic relief package that temporarily uh provides um some sort of impact fee relief against our standard ordinance, which which we think of as like these are our evergreen requirements, and then this second package is about hey, we've got a 24-month temporary package, it's gonna automatically sunset.

But you know, what the trade-off of that is is we get you know, 250 units, we get 350 units, we get 400 units, and we get those units delivered in the next two years, uh, because you know, and I met with the developer as well, and one of the conversation points that I shared with them from um another inclusionary housing update in San Francisco is we you know, we had these um kind of staff level conversations, and one refrain that came up a number of times was you know, 15% of zero is still zero.

And so I think that we have a responsibility here to see units through.

And so we may we might not have control over construction costs and interest rates and financing costs and land costs, but we are looking at a lever here that we can control, which is the inclusionary housing requirement.

And so while I'm not prepared, I think to talk about I'm in a similar boat as board member home.

I'm not prepared to talk about a sort of evergreen uh change to the inclusionary housing ordinance that's gonna permanently set a really low standard.

What I do want to inject into the conversation is like I said, some kind of package that does consider our current economic climate and our goals of producing housing in the housing element.

Um, you know, I think something that that you said, Steve, that was interesting is that you had seen a number of cities, you know, lower uh fees at kind of down points in the market, and we have this kind of there's a kind of art to that, right?

Because government takes a little bit to kind of catch up to the fact that that we're in a down market, we're in a down economy, and things haven't been getting built in a while, which is definitely true.

Um, but what is what is an example of that that we are looking at today?

That we are sitting here, you know, and after after 11 months of working on this inclusionary housing ordinance, we have in front of us in black and white that a bunch of projects are not feasible, and we are saying out loud that we are not going to work on that.

I I think we can do better.

Thank you.

Any other uh comments uh board member Zahiba.

Yeah, I'd like to thank everyone for the discussion.

Um as well met with um Andrew just before this meeting, just to um have a short conversation.

I just want to step back for a second and think of the lens that we're looking at housing in um before we get to this topic, which is uh the sense of creating um more housing.

Uh at the end of the day, that's the charge from the state.

And as we know, the more supply you have in the system, typically that creates uh a different financial structure of rents and and for sale units, meaning uh through supply you can gain affordability.

Uh, of course, it's not going to solve all the affordability levels, but if you have no supply, you have the challenge that you will continue to face.

And so I'm um I'm seeing what we've come up with in this um policy recommendation, and it feels to me like um we're suggesting things that are moving the needle in a different direction than creating more housing.

And so I think there's two ways to look at it.

There's the theoretical of in an ideal situation, where do you want to go?

Uh, and then there's the there's the the practical or the reality of of the situation that we're in and and where do we want to go.

And I and I think it is good to look at it long term.

Um, of course, we're gonna face different cycles and um bumps in the road, but when we do look at it long term, there you know.

What was interesting about some of the other ways that jurisdictions were tackling this as far as um where they were headed with the costs for the inlu fees, or if the invoo fee was a requirement and then the inclusion area was secondary.

To me, that's um a choice that the developer should make.

Like we should try to pull those things as close together as possible, because um, like we heard, there's different circumstances on different sites that uh require different cost structures for the development to actually occur.

If you're on the water's edge, or if you're in a site that needs you know soil remediation.

There, there's all sorts of challenges that one can face, but this um sort of nuanced look at just this flat fee is where we're gonna go with how you um eventually administer the overall cost of your project kind of negates all the uniqueness of um the project, and there might be different demands where a project it may make more sense to pay the in loo fee because then um you collect that money and do a project that you know an affordable housing developer is easier, you know, is able to manage than someone who's doing market rate housing and trying to manage it within that system.

So I think um, and I'm not sure what the right answer is to thread the needle, but it feels like to me that one can um step back and maybe tie some of this to overall costs, and not specific to um a dollar per square foot of livable space or um unit costs because it's at the end of the day it's the overall cost that everyone's trying to manage, and if you're looking at it from that lens, you may come up with a different way of thinking about um, and it could still be equitable.

I'm not saying it wouldn't, but if someone's just building 50 units but their dollar per square foot cost is a lot more in one location than someone building, you know, a hundred units in another location, the they're um they're still getting penalized like proportionally higher than than the person who went and found a site that required less investment on the overall um strategy of developing it.

So I guess I'm just wanting us, I and I know there's been a lot of work put into this.

I'm just trying to figure out is there a better way to get to a place where someone has the structure of cost certainty through the knowledge of what it's gonna mean to look to develop on that piece of property and um and and then manage to that percentage because if it's to a percentage, it seems more clear to me, just like you know, tax rates, for example.

Um, and I guess you could have tiered stuff, but I don't want to even get into that um level of complexity.

But it in a sense uh a rate can help clarify specifically what your costs are going in.

So as you move your own needle of like, hey, I've got to spend more on this, you know exactly what that burden's gonna be, and it's not gonna force you to take a different look at unit mix and take a different look at unit size, and because you're just gonna try to produce what's most efficient and best potentially for the market and what you're trying to um what you're trying to develop.

So anyways, that's um somewhere where I think just what I'm seeing currently in the report.

I'm not sure if it's moving us in the direction where we're gonna be promoting uh housing in the city.

So thank you.

Thank you.

Uh any other comments?

Uh board member Adisa or Vice President Adisa.

Thank you.

Thank you for all the work and all the comments from my um board member, fellow board members.

Um I I completely agree with board member Sahiva and Wong that somehow there needs to be I mean, I I agree with the recommendations in the report.

I think they're good recommendations, but I'm wondering if there is a way or a caveat that we can add for which, you know, you have to take into account how the developments are gonna be possible to be built, and I don't know if that's just like an additional recommendation or an additional comment in which there is the review, and but maybe there needs to be like a case by case kind of review somehow, because I understand the comments from the developer.

Of you know, there are certain costs that you are different in different locations.

Um I don't understand the percentage that board member Sahib is suggesting, but um but I do agree that ideally we come up with a way in which the feasibilities taken into account or considered somehow on the requests that we are making on the um inclusionary housing, you know, no comment.

Okay, um, uh yeah, uh huge thanks to my fellow board members.

Um I think this um uh was uh you know really great insights and input.

Um I agree um I I don't want to discount all the work that's been done this past year.

I really agree with more member Hom, that um, you know, this was a collective team effort, and uh the recommendations are moving directionally in the right way in terms of providing more options on the table.

I like that's I think the the drum beat that I'll keep on beating over and over flexibility is key here.

Um so um, and before I go further, I also met with a developer um Alamita Marina, so just uh want to disclose that.

Um so I am in support of the 99-year lease.

Uh I am support of the cluster options, and I appreciate like the the suggestion of having that for like preservation and rehab.

Um I um support opting into some kind of fee.

I think um just uh not having like the hard math about it, and obviously we're still like early, it sounds like early in the process, but just feeling more confident that is not gonna be um excessive and a burden, it sounds like it is potentially just like from the back of the math envelope that we did, like maybe 25 and 50 is um too high, but that might I I agree we want the and loo fees, and I think the right number is like the question mark.

Um I like the concept of the dialing options, like providing again um more options.

Um, and um my ears perked when we uh talked about potentially flexibility for certain cases when there's a community benefit or some economic package.

I kind of want to go back to my like I concept uh the concept that I threw out there of like it being tied to the economic state that we're in.

So I don't know what that looks like.

I was like starting to um look back at the report, it did mention something about the construction cost index.

So um, you know, how do we take into account where we are now in the market so we can deliver more housing and affordable housing because otherwise we're working against ourselves, it seems.

So um I I just uh want to echo the sentiments of my fellow board members on that theme here, like what's the ultimate outcome that we're working towards.

Um, and then um the small projects thing was an interesting like um I really appreciate the public comments on that um point, and I think I'm aligned more with uh board member Hum, like how do we um think about the fees uh a rate that um wouldn't curb like small infill development um and how do we right size that so um maybe it maybe it's I'm asking for like more insights into that.

So I do appreciate you know staff like hey, we should everyone should do their fair share, and like what does that look like when it comes to like an emerging developer and like the type of small info projects that we want to see um in our community?

So um yeah, I think those are uh high-level my thoughts, my takeaways, and again, um many thanks to the public for your insights and uh yes, board member Hong.

No, finish your thoughts.

Oh no, I was just saying thanks.

That's all, yeah.

Yeah, I if I may, I just wanted to talk about feasibility, which I totally uh the comments regarding you know the fact that there's not some hasn't been a feasibility study done, and that's certainly very critical.

And I think the rationale for not doing one currently is that even you did want to show that all projects are underwater, so it wouldn't really show much.

However, one thing I will say, having having done these feasibility studies is the sensitivity.

Every project, if that's what several board members mentioned, it varies quite a bit, you know, when you do a performer, you know.

Some projects they'll own the land for 30 years is fully cleared, so they don't have a high research of land value, so that's not a big factor.

Some people self-finance, um, depending on the housing type.

So these projects vary quite a bit as far as feasibility.

The challenge for staff is to try to craft an ordinance where you build in all these possible factors, makes it very difficult to administer, and then it raises quite honestly legal issues.

Like when you know why is one being treated for you know, so how some cities have done it, it's gonna be a good scope of consideration because I'm sensitive to that issue is that you know some cities entered into defilment agreements or something equivalent where you you kind of realize this particular project, you know, maybe because it's more challenging for whatever reason, feasibility-wise, you might acknowledge that, you know, but that's part of a development agreement, usually acquire some trade-offs.

But uh I just want to, you know, speak up the difficulty of trying to accommodate every nuance of a project regarding feasibility, it's very difficult when you try to craft an ordinance as fair and equable across the board.

It's not perfect, but it's almost like you have to settle somewhere in the middle.

I just didn't want to throw that in.

Yeah, I appreciate that.

Yeah, there's only so much we could do to make every developer applicant happy.

Like, how do we provide enough options?

So hopefully one of them will work.

Um, but it's something that I totally agree that needs to be you know carefully thought of for each project.

Well, I was just gonna say, um, you took the words right out of my mouth.

I I wanted to acknowledge that a lot of our projects, especially our cluster projects, are based on a development agreement, and so there's an acknowledged sort of trade-off.

Um, particularly where it's public land, and so, or we have some uh engagement along the shoreline or at Alameda Point.

Um, and then other projects don't have a development agreement, and um, so we're we're sort of in some ways really targeting projects that are somehow the average typical project, which is rare that they're you're gonna only have an average project.

So acknowledging all that variation, I think development agreements are a big tool in Alameda and will continue to be.

So we're gonna have to sort of account for how things are going and what we might do differently.

Um, so um this was actually an implementation implementation measure from that first housing element in 2023.

Uh so here we are sort of already thinking ahead um to the ups and downs of the cycle and and what um more we can be doing.

Great one more comment.

Um, yes, board member Wayne.

Sorry, uh in my excitement I neglected some of my own comments.

Um but uh I uh uh since board member Hom just spoke up, uh I did want to say that I I agree that I I it seems that we're very much against this conundrum of wanting to deliver housing and therefore you know wanting to deliver potentially bespoke solutions on a kind of development by development basis versus having you know a single ordinance or a single package that addresses um most of our our development or housing needs and I suppose that conundrum I think is is something for staff to think about and and address.

My point was in reviewing all the work that has been put into this uh ordinance update.

It wasn't super clear to me.

I think that we were taking a hands-off approach on feasibility until kind of closer to the end, and so I think uh just to echo my point from from earlier.

I think we need to be super explicit about that because if we do, if we do go out and say, hey, you know, here's a lot of important and interesting updates that we're making to the ordinance, but by the way, we're not touching feasibility, and by the way, most projects aren't feasible right now.

I think that does prompt us and our decision makers to at least ask, well, why not, right?

Um and when are we gonna do that?

Um, or alternatively, we can start doing it now and start thinking about it now.

Um, so that's just uh reprising the comment from earlier and and also just uh kind of agreeing with what board member Hahn was saying and and kind of how you solve like a bunch of complex problems that have their own complex issues with a single ordinance.

Um I also wanted to say uh I think a number of board members said this, and I think board member Han was the first to say it that um I also support um having the many kind of income mix options be baked into the ordinance uh from the get-go.

I think offering that flexibility to developers uh couldn't hurt, and and we you know we don't know what scenarios uh operational or or financing that they may see that we don't see in our in our very simple static models here.

Um, and then the last comment that I wanted to make that I neglected to make earlier was to just um speak a little bit uh I kind of challenge I guess the the policy direction I think that that that you mentioned earlier, Steve, around uh automatically, I think preferencing on-site units versus in lieu.

Um, and I I guess to to speak to that, I I'd like to draw a couple say hypothetical or theoretical scenarios.

So I think in in one theoretical scenario, let's say we've got a really hot market, um, we've got a couple, let's say on the island we've got a couple mid-rise rental buildings going, they're under construction, uh, things are going really well on the market, uh, in the market.

Uh, and at the same time, let's pretend the city had very limited land uh for constructing new projects.

And so what the developers say of these two developer two developments, they say, well, we much prefer the inloof fee, right?

We'll just fee out, we'll pay the city, and the city says, Oh, great, we're gonna take that inloof fee, we're gonna put it in a fund, we're gonna develop more affordable housing with it.

Uh, and then they realize, hey, we don't have any land, there's no land here.

We can't, so we're just accruing all this all this fee, and we can't develop affordable housing.

So I think that would be exactly the scenario where you would want to say, well, let's let's hitch our affordable housing wagon to the market rate developments that are actually happening, and we want to kind of disincentivize in Lu fee so that we can actually produce affordable housing in projects that are actually being delivered.

Um, so I think I think to draw a different scenario.

Well, first of all, I'm not sure that we are as land constrained in Alameda.

I think we have a bunch of sites that that we can deliver affordable housing on.

I think we have a bunch of master plans that have been identified either in the pipeline or as potential sites in the housing element, right?

So we don't really have that kind of land constraint.

Um we've been in a kind of a down cycle in the market for a good few years now.

And I think at the down cycle of the market, you kind of find all the cranes have disappeared, right?

You look around and you see, hey, there's one or two projects being built around in the Bay Area.

Oh, they happen to be affordable housing projects.

Why?

Because those aren't uh those those have a different sort of counter-cyclical or non-cyclical source of funding, right?

They get grants from the state uh from regional agencies, they assemble grants here and there.

Um, so they're not kind of subject to kind of the the ups and downs of the private markets in the same way.

So we've we're in this moment where we have a bunch of uh market rate housing projects, they're stuck in the mud, they're not moving forward.

You have 100% affordable housing projects being delivered delivered.

So I kind of question whether it makes sense to have a housing ordinance that that uh very much disincentivizes the in LU fee because that in LU fee as the street level report identified during down markets can be paying for pre-development for affordable housing.

Uh the reason I brought up Hawthorne suites was I think you know, our impression was that that project failed because I couldn't find the funding.

That in LU fee could have funded the Hawthorne suites conversion.

Uh it could be going to CAP fund other affordable housing projects on other sites in the city of Alameda.

So why are we disincentivizing the inLU fee is the question I want to raise.

And maybe I could just clarify.

So there we were trying to balance that between the rental and the ownership as well.

So there's there is a sort of uh push and pull on how that plays out.

So acknowledging maybe we disincentivize one and incentivize the other and we see how that plays out.

But um yeah, I hear you.

Uh yes, uh Board Member Sahiva.

Yeah, I just had a follow-up question on that.

Um on the disincentivizing versus incentivizing.

Because we haven't done well a feasibility study, I'm curious.

Do we know where their demand is?

Or are we trying to create supply in a specific direction by modifying these fees?

Um because we know where the demand needs to go, or what what's what's the goal?

My sense is we're pretty balanced between rental and ownership in terms of the projects that are both entitled and being built.

Um I think there's a little bit of a legacy of projects that are already put all the infrastructure in, so they're just sort of going ahead with the first phase, and now they're taking a little break, and we're seeing now okay.

Well, how do we get that second phase going?

Because they've already spent the money on the streets and the pipes and everything, so I think that's the hang up is the sunk costs and and now seeing rents and prices and construction costs um change in the past five years.

So I think it's balanced in terms of the market and uh rental versus ownership, any other comments or questions or input so staff could um firm up the recommendation and and can you remind us the next steps?

Sorry.

Right.

So we're going to the city council next week for uh their update and feedback.

Um they haven't heard this item yet, as you've heard it three times now.

So um we wanted to make sure that they got a chance to weigh in before we start drafting an ordinance and and doing any further study we need to do.

Great.

Uh yeah, we're member home.

Your question for staff, you know, we provide you a lot, I think really rich comments tonight uh from all of us.

I'm just wondering how will our comments be summarized and presented to the council?

Um well at this point orally.

Um so um we'll do our best.

Um the body will be online.

See them somehow summarized in writing.

Yeah, yeah.

Just present it verbally.

Maybe expanded minutes or something, you know.

Yeah, or like maybe the the in the PowerPoint presentation, um, like a yeah, slide of our feedback.

Um, because I think there's some really good comments that we've shared tonight that would be good for the council to hear.

Yeah, I'll make sure I do that.

Great.

All right.

Um and with that, we'll go ahead and close uh agenda item five.

Thank you to everyone.

Is there anything okay?

Yeah, we're good.

No further comments.

Okay, uh, with that we'll move on to staff communications.

Um, six B.

Uh 6A and 6B.

I don't have anything.

Um, no public comment on 6A or 6B.

Okay.

And with that, we'll close item six and go to board communications.

Seeing none?

Any public comments for that?

No.

Okay.

Non-agenda public comments.

Anyone can speak for three minutes for something that wasn't on agenda tonight.

Seeing no comments.

All right, it's eight forty eight, and we are adjourned.

Thank you.