Council Approves Accessory Dwelling Ordinance

Ordinance passes with Residential Impact Fees tempered only by the Affordability Covenant; two motions to reduce the Fees fail

Published : Tuesday, March 13, 2018 | 5:46 AM

Council Approves Accessory Dwelling Ordinance

“We are being too clever by half,” said Councilmember Margaret McAustin Monday night in arguing to eliminate a series of housing fees proposed for the construction of new Accessory Dwelling Units, called ADU’s and also known as “Granny Flats.”

After a long evening of animated discussion, however, the Council eventually approved the proposed Zoning Code amendments which could lock in place what some residents argue are excessive Residential Impact Fees.

Two motions to reduce those fees, failed.

The ordinance sets no minimum lot size requirement for Accessory Dwelling Units on RM-zoned properties (multi-family residential).

ADU’s constructed specifically under an “affordability covenant” would enjoy a dramatically reduced Impact Fee.

But as McAustin described her issue, the City’s push for new ADUs is “not an affordable housing issue.”

“The purpose of the ADUs is to increase the housing stock, but they are not necessarily meant to be affordable,” she said, adding, “the fee we are charging is so unaffordable.”

Currently the City requires a substantial Residential Impact Fees ( $18,472.73 for studios and $19,494.61 for one-bedroom dwellings). Residents testified Monday that fee stops many of them from ever constructing an Accessory Dwelling Units.

The impact fee applies to all new residential units of any kind in the City and is calculated based on the number of bedrooms per unit and not by.size or square footage, according to a City staff report. This fee is charged when the building permit for a new residential unit is issued.

“We are asking people to build ADUs, but we make them so expensive,” said McAustin.

McAustin argued for maintaining an across-the-board $957 fee for building units. That is the same fee for homeowners who agree to a series of affordable housing covenants, which currently place limits on rents, as well as which family members can qualify to be rented to.

“Charge $957 across the board,” said McAustin. “Make all the rest of the [fees] go away. Let the market do the rest. Don’t charge Section 8 landlords anything.”

Mayor Terry Tornek agreed, saying during his comments, “If we are trying to increase housing stock, how does anyone afford to build?”

Tornek spoke after the bulk of the discussion. He cited the case of one Pasadena couple, who wanted to build their own ADU, but found themselves being charged nearly $30,000 for a project budgeted at $20,000.

The City Council had also previously discussed but did not approve the staff recommendation to reduce the Residential Impact Fee for new Accessory Dwelling Units.

As voted on Monday evening, the $957 fee would still only apply to those who agree to affordable housing covenants.

A motion amendment by Councilmember Tyron Hampton to reduce the length of time commitment for affordability covenants for Accessory Dwelling Units, from seven years to five years — a reduction from the City Code’s original 30 years — was not supported by the Council.

Hampton also brought up the idea that the Council should work on developing a broader definition of “family,” so that homeowners might have greater leeway in renting their accessory units. Other Councilmembers agreed, but did not make a specific recommendation. City Attorney Michele Bagneris said she would develop the wording for such a recommendation.

Also, as the Council decided in December, homeowners who wish to build new units have the option to enter into a landlord agreement with the City. The homeowner would have two options under this agreement:

According to the Planning Department staff report, the first option would allow a homeowner to enter into a landlord agreement with the City committing the Accessory Dwelling Unit to be rented out·exclusively to the City’s rental assistance clients for a term of seven years. Advantages to this program would be that there would be no legal encumbrances on the property that could limit a homeowner’s future financial options and the homeowner would not.have to verify the income level of each prospective renter, as the City would already have a list of pre­ qualified tenants.

The second option would allow a homeowner to rent to a family member and enter into a landlord agreement with the City, committing the Accessory Dwelling Unit to be rented out at no more than 50% of the Area Median Income Level (AMI) lnclusionary Unit Rent limit for a term of seven years.

Currently, the 50% AMI lnclusionary Unit Rent limit for a studio unit is $566 and for a one-bedroom unit is $648. These rental limits are adjusted on an annual basis in accordance with changes in the Los Angeles County Area Median Income level, as published by the State of California Department of Housing and Community Development:.

In either of the landlord agreement options, the City would require a yearly certification, and if a homeowner decides to end the agreement before the set term of seven years, they will be responsible for paying the full Residential Impact Fee to the City.

The City Attorney will return to the City Council in 30 days for a first reading of the new ordinance, which the Council may again amend or alter.