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Home My WebLink AboutItem 03 SDC waiver extension for ADUs AGENDA ITEM SUMMARY Meeting Date: 5/6/2019 Meeting Type: Regular Meeting Staff Contact/Dept.: Sandy Belson, DPW Staff Phone No: 541-736-7135 Estimated Time: Consent S P R I N G F I E L D C I T Y C O U N C I L Council Goals: Promote and Enhance our Hometown Feel while Focusing on Livability and Environmental Quality ITEM TITLE: EXTEND THE TEMPORARY WAIVER OF SYSTEM DEVELOPMENT CHARGES (SDCs) FOR ACCESSORY DWELLING UNITS (ADUs) ACTION REQUESTED: Approve the following resolution: A RESOLUTION EXTENDING THE TEMPORARY WAIVER OF THE CITY’S SYSTEMS DEVELOPMENT CHARGES FOR NEWLY PERMITTED ACCESSORY DWELLING UNITS FOR THE PERIOD OF JULY 1, 2019 THROUGH JUNE 30, 2022 ISSUE STATEMENT: The City recognizes that there is an affordable housing issue within the community. One aspect of the Council’s affordable housing strategy is to encourage ADUs, thereby adding market-rate small-scale rental dwellings to the tight housing supply. One way to promote this type of infill development is by waiving SDCs, making construction more affordable. ATTACHMENTS: 1. Resolution DISCUSSION/ FINANCIAL IMPACT: On April 15, 2019, Council reviewed the SDC waiver program for ADUs and found that the waiver, along with the development code amendments adopted last year, has had the result of stimulating the addition of ADUs to the City’s housing supply. Many applicants have stated that they would not have considered adding an ADU but for the SDC waiver. The two-year waiver is due to expire on June 30, 2019. Council directed staff to prepare a resolution to continue waiving the SDCs for three more years with annual check-ins to review the effectiveness of the waiver and the impact on systems development charge revenues. Waiving SDCs means that the city is not collecting funds that may otherwise have gone toward planned infrastructure capacity projects in the transportation, stormwater, and local sanitary sewer systems. FY20 capital projects are already programmed based on actual SDCs received, so there is no short term impact on the capital projects list. As noted above, many of the ADUs would not be built if the SDCs had not been waived, so the City is not foregoing the revenue in those cases. It must be recognized that by waiving the SDCs, the city is potentially delaying some of the future capacity increasing projects that would be paid for through SDCs and is not receiving reimbursement for projects already constructed. It is expected the new ADUs will be on lots already served by sanitary sewer, stormwater, and transportation systems. Given the dispersed nature of ADU applications thus far, this infill development is not causing a noticeable impact to any of the systems within a particular drainage basin or street network. The annual check-in enables the City to evaluate the popularity and desirability of locating ADU’s in different neighborhoods and the extent of those impacts. Page 1 of 2 CITY OF SPRINGFIELD, OREGON RESOLUTION NO. ___________ A RESOLUTION EXTENDING THE TEMPORARY WAIVER OF THE CITY’S SYSTEMS DEVELOPMENT CHARGES FOR NEWLY PERMITTED ACCESSORY DWELLING UNITS FOR THE PERIOD OF JULY 1, 2019 THROUGH JUNE 30, 2022 WHEREAS, the Council finds that there is a shortage of affordable housing within the City of Springfield and is resolved to address this problem; WHEREAS, the Council finds that the supply of housing in Springfield is limited at all levels and that the rental vacancy rates are very low, with the lowest vacancy rates in small rental units; WHEREAS, the Council finds that housing costs in Springfield are increasing faster than household incomes; WHEREAS, Springfield Development Code section 5.5-100 addresses what constitutes an accessory dwelling unit, its purpose, the zones in which it can be constructed, and applicable design parameters; WHEREAS, the Council finds that accessory dwelling units provide a number of public policy benefits, including: A. Providing the opportunity to add accessible and affordable units to existing neighborhoods, in particular increasing the supply of small rental units for which the vacancy rate is lowest; B. Making efficient use of land and taking advantage of the existing infrastructure; C. Providing flexibility to accommodate changes in household size or composition over the course of time, creating opportunities for intergenerational living and on-site caretakers/assistants; D. Providing financial benefit to property owners; and E. Triggering economic development at a local scale by creating work for local builders and contractors; WHEREAS, the Council has expressed its desire to encourage the construction of accessory dwelling units as a way to meet Springfield residents’ demand for housing; WHEREAS, the City collects system development charges for the impact of development on the transportation, stormwater and local wastewater systems; WHEREAS, on April 19, 2010, the Council adopted Resolution 10-19, amending and adopting the rate structure for systems development charges for stormwater and local wastewater; WHEREAS, on December 1, 2014, the Council adopted Resolution 2014-38, modifying a methodology for the calculation of transportation system development charges; WHEREAS, on June 5, 2017, the Council adopted Resolution 2017-15, temporarily waiving the city’s systems development charges for newly permitted accessory dwelling units during the period from July 1, 2017 through June 30, 2019; WHEREAS, Council determined that the waiver is achieving its intended purpose of encouraging construction of accessory dwelling units that property owners may not otherwise create; Attachment 1, Page 1 of 2 Page 2 of 2 WHEREAS, the Council finds that the additional demand placed on the capacity of the infrastructure systems by accessory dwelling units constructed during the effective period of this Resolution will continue to be minimal given that accessory dwelling units may only be built on lots that are developed with single family homes and already served by existing infrastructure; and WHEREAS, the Council finds that impacts of accessory dwelling units on infrastructure systems will also be minimal given the limited duration of the waiver and the dispersed nature of accessory dwelling units within the City of Springfield; and WHEREAS, the Council finds and determines that this waiver is an effective strategy to encourage the construction of accessory dwelling units and should be extended for three years with annual check-ins to ensure that the program is still needed and continues to meet its purpose; NOW, THEREFORE, BE IT RESOLVED BY THE COMMON COUNCIL OF THE CITY OF SPRINGFIELD: Section 1: For a period beginning on July 1, 2019, and extending through June 30, 2022, the City shall waive the transportation, stormwater, and local wastewater system development charges on newly permitted accessory dwelling units. Section 2: The City Manager is directed to report annually to the Council with respect to the impact of these reductions both on construction of accessory dwelling units within the City and the impact on systems development charge revenues, and to recommend whether or not to extend this waiver program. Section 3: If the Council determines that waiving systems development charges is an effective strategy to encourage the construction of accessory dwelling units, the Council may further extend the waiver by Council Resolution. Section 4: This Resolution takes effect on July 1, 2019. ADOPTED by the Common Council of the City of Springfield this ___ day of _________, ____, by a vote of _____ for and ____ against. _______________________ Mayor ATTEST: __________________________ City Recorder Attachment 1, Page 2 of 2