More housing coming to Petaluma in the new year

Several residential projects are poised for public hearings and development in Petaluma later this year, but they’ll be exempt from efforts by city officials over the last two years to generate more low-income housing.

Under the new policy adopted by the city council last fall, which requires developers to set aside 15 percent as affordable units or pay an in-lieu fee equal to 20 percent, projects already in the pipeline had until Dec. 31 to have their application “deemed complete.”

Baywood Apartments, a 299-unit project on Casa Grande Road, and a 120-unit residential expansion to the Deer Creek shopping center on McDowell Boulevard were able to clear that deadline, avoiding a regulation that city officials said might have jeopardized their business plan.

Developers of those projects will be able to pay fees under the previous structure, amounting to less than half of what local policymakers enshrined in 2018. Under the new policy, the two projects would have added approximately 63 affordable units to the city’s housing stock.

“You’re dealing with market forces and individual decision makers that make those decisions based on what pencils out for them,” said Councilman Dave King. “The concern, and this was brought up during the meetings last year, is this will potentially slow housing construction down in a way that is not beneficial to affordability.”

Representatives from both developers did not return calls inquiring about the pending proposals and potential housing rates.

Collecting in-lieu fees is done further down the development process, which means those funds won’t be available for the city to use for a project of its own for several years, said Housing Coordinator Sue Castellucci.

Many local governments like Petaluma lost their ability to pursue residential projects in 2012 when redevelopment agencies were dissolved by the state to fend off a budget deficit.

While the city council’s new housing policy lays the foundation for future development, it may require additional tweaking to create faster relief to a community facing a less than 2 percent vacancy rate.

“Certainly things have changed,” Castellucci said. “It’s a new day, and that’s certainly a good goal or topic for a goal session when the new council and city manager come on board.”

King, who was reelected to a second term in November, expects housing will be a key topic during those meetings.

“There may be some ideas percolating out there that we’ll discuss at goals and objective (setting),” he said. “The goal for me is to build market housing that’s both affordable for rent and at purchase price. I’m sure there’ll be some discussion on that.”

A market-rate project already in the works is the North River Apartments, but any relief that could come from the injection of 184 units where Oak Street meets Petaluma Boulevard North continues to be delayed.

Before the project can advance, the developer, A.G. Spanos Companies, needs a neighboring property owner, Water Street Properties, to complete a zoning change with the city at the end of North Water Street.

The city’s fire marshal determined that Water Street needs to be developed into a full road as opposed to an access point for emergency vehicles, compelling the two developers to come together.

The Recreation, Music and Parks Commission was the first municipal committee to weigh in on the proposed zoning change, and criticized a conveyance that would limit public access along the river during a meeting last month.

The issue will come back before the commission later this year, and will also need to go in front of the planning commission and city council. Once that’s complete, Spanos can then pursue its final approval from the city council and move forward with construction.

(Contact News Editor Yousef Baig at yousef.baig@arguscourier.com or 776-8461, and on Twitter @YousefBaig.)