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HomeMy WebLinkAboutAHIP-10.26.20 RESIDENCES AT 4440 VON KARMAN AFFORDABLE HOUSING IMPLEMENTATION PLAN AND DENSITY BONUS APPLICATION RESUBMITTED OCTOBER 26, 2020 Prepared by 1 RESIDENCES AT 4440 VON KARMAN AFFORDABLE HOUSING IMPLEMENTATION PLAN AND DENSITY BONUS APPLICATION OCTOBER 26, 2020 Project Description & Affordability Level TPG (KCN) Acquisition, LLC (“Picerne”) is proposing the 312 unit Residences at 4440 Von Karman development (“Project”) on a site located in Planned Community Development Plan #15 (Koll Center Newport Planned Community). The Project site is irregularly shaped and is bounded by Birch Street, Von Karman Avenue, and the existing surface parking lot for the Jazz Semiconductor facility. Although the total Project site is approximately 13.0 acres, that is inclusive of existing surface parking serving existing office buildings as well as a proposed parking structure which is planned to replace existing surface parking on the residential development site serving the existing office buildings. The net development area, including parks, landscaped walkways, access drives, the replacement parking structure, and existing parking totals approximately 8.7 acres. The balance of the Project site (approximately 4.3 acres) consists of an existing access easement, parking lots, and offices. The Newport Beach General Plan designates the Project site as Mixed-Use Horizontal 2 (MU- H2) and the zoning is Planned Community 15, Koll Center (PC 15). The site is currently developed as a surface parking lot serving existing office uses. Those parking spaces will be replaced in a proposed parking structure to be located in the southeast corner of the Project site as well as in the parking garage for the proposed residential Project. As part of the Project, Picerne intends to develop and dedicate a 1.1-acre Public Park to the City of Newport Beach. The Project is planned to consist of a total of 312 units: 260 units based on the current remaining additive residential units (“Base” units) per the Airport Business Area Integrated Conceptual Development Plan for Koll and Conexant Properties (“ICDP”) and 52 density bonus units (i.e., 20% of the 260 Base units). In accordance with Government Code Section 65915, five percent of the Base units (i.e., 13 units) will be made affordable to Very Low Income households. Very Low Income households, as defined in California Health and Safety Code Section 50105, are households earning 50 percent or less of area median income, adjusted for family size. Eligibility for Density Bonus Picerne will be providing 13 units (i.e. 5% of Base units) affordable to Very Low Income households (“Very Low Income units”). This will comply with the provisions of Government Code Section 65915 and Section 20.32 of the City’s Zoning Code applicable to a 20% density bonus. Rents for the Very Low Income units will be computed in accordance with Health and Safety Code Sec. 50053, as required by Government Code Section 65915(c)(1). Residences at 4440 Von Karman Affordable Housing Implementation Plan and Density Bonus Application October 26, 2020 2 Density Bonus Computation and Term of Affordability The density bonus computation for the Project per Government Code Section 65915 is shown below: Table 1 Density Bonus Computation Picerne intends to operate the apartment Project as a rental community. The 13 Very Low Income units will remain rent restricted for a minimum of 55 years, per Government Code Section 65915(c)(1). Reduction in Parking The Project meets the criteria of subdivision (b) of Government Code Sec. 65915 and Section 20.32.030 of the City’s Zoning Code by providing at least five percent (5%) of the total units of a housing development (excluding any units permitted by the density bonus awarded pursuant to that section) for Very Low Income households. Government Code Section 65915(p) and Section 20.32.040 of the City’s Zoning Code provide the following: (1) Upon the request of the developer, no city, county, or city and county shall require a vehicular parking ratio, inclusive of handicapped and guest parking, of a development meeting the criteria of subdivision (b), that exceeds the following ratios: a. Zero to one bedrooms: one onsite parking space. b. Two to three bedrooms: two onsite parking spaces. (2) If the total number of parking spaces required for a development is other than a whole number, the number shall be rounded up to the next whole number. For purposes of this subdivision, a development may provide “onsite parking” through tandem parking or uncovered parking, but not through street parking. Table 2 on the next page is a summary of Government Code Sec. 65915 parking requirements vs. spaces to be provided: Remaining Units Per ICDP (Before Density Bonus)260 Density Bonus Utilized (20%)52 Total Units 312 Residences at 4440 Von Karman Affordable Housing Implementation Plan and Density Bonus Application October 26, 2020 3 Table 2 Parking Requirements Picerne requests that parking requirements be calculated in accordance with Government Code Sec. 65915(p). The project is currently planning to provide 559 onsite parking spaces for its residential units, subject to changes pending approval of final building plans. Development Incentive Request Pursuant to Government Code Section 65915(d)(1) and Section 20.32 of the City’s Zoning Code, Picerne is entitled to one concession or incentive as a result of providing at least five percent (5%) of the units as affordable for Very Low Income households. Picerne requests the following development incentive: Section 20.32.070 of the City’s Zoning Code provides that “Affordable units [in a density bonus project] shall reflect the range of numbers of bedrooms provided in the residential development project as a whole.” Picerne requests that the 13 Very Low Income units be Unit Type Studio 55 1.0 55 1 BR 149 1.0 149 2 BR 108 2.0 216 TOTAL PARKING STALLS REQUIRED - RESIDENTIAL UNITS 312 1.3 420 Stalls/Unit Per Gov. Code 65915 Parking Stalls Number of Units Unit Type Studio 55 1.0 55 1 BR 149 1.0 149 2 BR 108 2.0 216 TOTAL PARKING STALLS REQUIRED - RESIDENTIAL UNITS 312 1.3 420 TOTAL PARKING STALLS PROVIDED - RESIDENTIAL UNITS 559 PARKING PROVIDED IN EXCESS OF MINIMUM REQUIREMENTS 139 276 TOTAL PARKING STALLS PROVIDED IN RESIDENTIAL STRUCTURE 835 OFFICE PARKING PROVIDED IN RESIDENTIAL STRUCTURE Stalls/Unit Per Gov. Code 65915 Parking Stalls Number of Units Residences at 4440 Von Karman Affordable Housing Implementation Plan and Density Bonus Application October 26, 2020 4 provided utilizing the unit mixes as shown below rather than a unit mix proportional to the development as a whole: Table 3 Unit Mix As required by Government Code Sec. 65915(d)(1)(A), this incentive will result in additional rental income for the Project as well as construction cost reductions for the affordable units, which will enable the affordable rents to be set in accordance with Government Code Sec. 65915(c)(1). Income Limits and Examples of Eligible Tenants for Affordable Homes Very Low Income Households are defined as households whose gross income does not exceed 50% of area median income, adjusted for household size. Table 4 on the following page shows the maximum income limits as determined by the U.S. Department of Housing and Urban Development and the California Department of Housing and Community Development (“HCD”) for Very Low Income households with household sizes appropriate for Residences at 4440 Von Karman: Table 4 Maximum Income Limits Higher income limits apply to larger families of 6 or more persons; however those families are not considered to be a target market for Residences at 4440 Von Karman, where the unit mix consists of studios, one-bedroom, and two-bedroom apartment homes. Unit Type Total Units Very Low Income Units Studio 55 3 1 Bedroom 149 9 2 Bedroom 108 1 Total 312 13 Household Size Very Low Income Units Maximum Annual Income - 2020 1 Person $44,850 2 Person 51,250 3 Person 57,650 4 Person 64,050 5 Person 69,200 Residences at 4440 Von Karman Affordable Housing Implementation Plan and Density Bonus Application October 26, 2020 5 The Project’s 13 affordable homes will be rented to eligible Very Low Income households. As shown in Table 4, Very Low Income households include incomes ranging from $44,850 per year for a one-person household to $69,200 per year for a five-person household. As such this could include service industry employees (waitresses, retail managers, hotel receptionists etc.), school district employees, health care employees, and other occupations which provide needed services to our community. While household size, overtime pay, summer jobs, or second jobs may affect eligibility, the income limits above are reflective of pay to many public or health care sector workers, as shown in Table 5 below: Table 5 Examples of Qualifying Salaries The pay ranges shown above are as of 2018 through 2020 (depending on source) and are subject to periodic update. Retired persons or couples or young business professionals starting their careers may also qualify to rent the affordable homes. In order to provide opportunities to workers to live in one of the affordable homes, the City could provide guidelines providing for acceptance of applications on a priority basis from classes of individuals who qualify under the income limits in effect. The guidelines could provide for priority treatment for City employees, employees of the local school district, and employees of major health care institutions or other categories identified by the City for priority treatment. Rental Rate Limits for Affordable Homes The 13 Very Low Income units shall be rented at an affordable rent calculated in accordance with the provisions of Section 50053 of the Health and Safety Code. Section 50053 of the Health and Safety Code limits affordable rent to 30% of total income for a Very Low Income household, as calculated in Table 6 below. That section also requires that the rent for a studio unit assumes a one-person household for rent calculation purposes, a one-bedroom unit assumes a two-person household, and a two-bedroom unit assumes a three-person household. The rents calculated are then adjusted by a utility allowance as determined annually by the County of Orange Housing & Position Pay Range Information Source Comments Library Clerk I or Library Clerk II $38,896-$60,590 State Will qualify. Police Comm. Service Officer 44,158-68,494 State Will qualify Newport-Mesa School District Custodian/Head Custodian 42,768-56,472 NMUSD Will qualify Newport Mesa School District Administrative Asst.49,764-60,936 NMUSD Will qualify Hoag Hospital Administrative Asst.44,000-51,000 Glass Door Will qualify A Very Low Income household must have household income which does not exceed a range of $44,850 to $69,200, depending on household size. Following are examples of positions available at the City, at Newport-Mesa Unified School District, and at Hoag Hospital which may be representative of future residents in affordable units at the Residences at Uptown Newport North. Residences at 4440 Von Karman Affordable Housing Implementation Plan and Density Bonus Application October 26, 2020 6 Community Services Department. As of October 1, 2019, the reduction for the utility allowance is $119.00 per month for a studio unit, $132.00 per month for a one-bedroom unit, and $171.00 per month for a two-bedroom unit. The utility allowance utilized assumes gas cooking, gas space heating, gas water heating, as well as water, and sewer, and trash fees which will be paid by the tenant. Table 6 Maximum Rents by Bedroom Count Picerne will enter into an affordable housing agreement, in recordable form, with the City prior to obtaining the first building permit for any residential unit within the Project. That agreement will ensure that the maximum rents for the affordable apartment homes will be calculated using the methodologies as utilized in Table 6. The rental rates shown will be updated prior to the commencement of rental activities and on an ongoing basis to reflect then current income limits, utility allowances, and any changes in applicable regulations and statutes. Unit Mix, Design, and Location of Affordable Homes While the exact location of each of the affordable homes within the Residences at 4440 Von Karman has not yet been determined, the affordable homes will be spread throughout the development to avoid concentration of affordable homes in any area. The affordable homes shall be comparable in the quality of construction and exterior design to the market rate homes. The affordable homes will be marketed concurrently with the market rate homes and will be released for occupancy roughly proportional to release of the market rate homes for occupancy. All affordable homes will have access to the facilities and amenities offered by the development. Bedrooms Maximum Annual Rent - 2020 Maximum Monthly Rent - 2020 Utility Allowance1 Affordable Rent - 2020 Very Low Studio $10,815 $901 $119 $782 1 Bedroom 12,360 1,030 132 898 2 Bedroom 13,905 1,159 171 988 1Utility allowances will be updated prior to commencement of leasing activities to reflect updated utility allowances and final utility configurations. Residences at 4440 Von Karman Affordable Housing Implementation Plan and Density Bonus Application October 26, 2020 7 Requested City of Newport Beach Assistance Financial Assistance Picerne is not requesting any direct financial assistance from the City of Newport Beach for the Project.