CITY COUNCIL REGULAR MEETING AGENDA PACKET

Page 12 of 17 this new development, which will constitute the largest share of new growth in Pleasanton in coming years. To the extent multi-family development is viable anywhere in the Tri-Valley, Pleasanton’s fees will be on a par with peer jurisdictions. In conjunction with Option 2A, as a secondary recommendation, and as discussed at the August 2024 meeting, the City Council could consider offering near-term relief to residential multi-family projects by allowing multi-family projects to “fee out” of up to 33% of their inclusionary requirement (without additional City Council approval), for a period of up to two years following the effective date of the IZO’s adoption. This strategy would recognize the challenges of the current market, and interest in promoting multi-family development to help meet the City’s RHNA. As currently proposed, the fee would represent a lower cost than the cost to construct on-site, providing some financial relief for these projects, while still having them mitigate the majority of their affordable housing demands on-site. The disadvantage of this approach is that it would potentially reduce the number of deed-restricted affordable housing units constructed during the initial period. Non-Residential Fees For non-residential development, for simplicity, the alternatives are presented using the “Office” land use category only, rather than providing a multitude of scenarios for each commercial land use type. The Office category serves as an appropriate proxy because non- residential impact fees are usually derived using similar per unit demand factors (e.g., trips or employees per square foot) that vary proportionally by land use category (e.g., the relationship between office and industrial fees are roughly similar by City). That said, some cities provide policy-based fee discounts to incentivize certain types or locations of development (e.g., for retail or near transit). The recommendation for Office would be carried forward to other non-residential uses in a proportionate manner, unless the City Council wanted to explore alternatives that would (for example) discount fees for one type of use compared to another. It is further noted that the maximum Commercial Linkage fee for affordable housing, justified by the study, is well above any feasible level. Therefore, the alternatives provided below assume the existing commercial linkage fee per square foot as the baseline, with changes up or down from this level. Three alternatives are presented, and illustrated in Table 11: Alternative 1: Increase CFF and TIF to Maximum Supportable. This alternative would set the CFF and TIF fee at the maximum supportable by the Nexus Study; that is $13.41, and $31.50 per square foot, respectively. The Commercial Linkage Fee would remain at its current rate ($3.71). The aggregate fee would total $48.62 per square foot. Alternative 2: Retain the total aggregate existing fee, inclusive of the CFF, TIF and Commercial Linkage Fee of $30.12/square foot. In order to retain the existing fee, the TIF and CFF would be set to equal one another (at $13.41 per square foot) and the remaining fee amount (i.e., $3.29) would be allocated to the Commercial Linkage fee. Alternative 3: Lower the total aggregate fee to $22.78, reflective of the average fee burden Page 218 of 893