Santa Rosa may suspend downtown development fees to stimulate apartment building

In its continued effort to spur high-density housing in downtown Santa Rosa, City Council Tuesday will consider development incentives including waiving fees that go toward city parks and roadways.

During a five-year experiment, the city would collect the usual fees for only the first three floors on qualifying projects up to 10 stories, and the first two floors on apartment developments in areas capped at five stories. Deeper discounts would be available for projects that include affordable homes. All building proposals of three or more stories, with at least two dedicated to housing, would be eligible for delayed payment of city water and sewer fees.

The city views addressing the cost of developing new residences as one of the final hurdles for encouraging builders to submit project applications and get construction underway. Through other policy changes this year, the council already has created an expedited permitting and design review processes for downtown projects, as well as established smoother ways to comply with state environmental requirements for construction.

“The concept we've been using is there are a number of puzzle pieces that have to be put into place,” said David Guhin, the city's planning and economic development director. “Just cutting fees is not going to solve the problem.”

It is, however, critical to increase the number of homes built within the half-mile section from the downtown transit mall and Sonoma-Marin Area Rail Transit commuter trail station in Railroad Square. That priority zone is where a decade ago the city identified both the capacity and need for more than 3,400 units in high-rise apartment buildings by 2027, but halfway to the target date only has seen 100 built. Another 275 have been approved, but never built.

“Approvals are great, but how we translate approvals to actual construction of housing is key,” Vice Mayor Chris Rogers said. “I think you've seen a council willing to be creative.”

As part of the push for more urban apartment homes, the city applied for and received an $800,000 grant through the Bay Area's Metropolitan Transportation Commission to review land use and necessary infrastructure around public transportation in its downtown corridor. The city received nine consultant applications by its Monday deadline and will hire one to assist over the next year with updating its 20-year downtown development plan with an eye on building homes.

Settling on new maximum building heights is baked into the long-term strategy where, instead of 10-story caps, Santa Rosa could reach higher into the sky toward the 14-to-16-story - or taller - residential structures of other cities of similar population. Developers have told council members such heights help justify the elevated costs of building with steel and concrete instead of wood to meet building code.

The city would intend to zone appropriately to create a “layer cake” approach to high density to ensure compatibility with existing single-family and historic neighborhoods of one- and two-story homes on the downtown's outskirts. That way housing needs are being met while also respecting the current owners and renters who predate them.

“We need folks who live and work downtown,” Councilwoman Julie Combs said. “That's the point. Implementing strong downtown vertical design is really about creating housing for everybody, in a way that's affordable, and cost-effective for the builder, the renter or buyer and for the city.”

Santa Rosa lost some 3,000 homes during the October 2017 devastating Tubbs firestorm and will need to rebuild those in addition to meeting the growing housing needs across the region just to keep up. The thought is, if the city is able to lure enough developers with financial perks to construct the 3,300 additional apartments downtown originally deemed feasible in 2007, it would go a long way toward its comprehensive plan for building new housing in the post-wildfire recovery.

Council members will decide Tuesday if eating the fees from the effects of housing development, which typically go toward new parks as well as roadway and infrastructure improvements, is worthwhile. Some think it's a cost of doing business, and could end up paying for itself several times over.

“For me, the reason to build up the downtown is creating access to public transit that's most appropriate, and for the economic vitality it brings by putting people in the economic center of the city,” Rogers said. “We've seen this in other jurisdictions such as Napa, and the benefits it can have by creating an economic generator that proliferates throughout city, and it's important for us to keep that economic base in Santa Rosa.”

You can reach Staff Writer Kevin Fixler at 707-521-5336 or at kevin.fixler@pressdemocrat.com. On Twitter @kfixler.