General Plan Advisory Committee
Thu, August 17, 2023
General Plan Advisory Committee — August 17, 2023
This was a regular monthly meeting of the General Plan Advisory Committee (GPAC), held via Zoom with interpretation services available. The session featured a substantive presentation on housing feasibility, robust member discussion, and a conversation about restructuring working groups for the next phase of the General Plan Update (GPU).
Staff and Project Updates
Brian Oh, eight months into his role as Director of Community Development, led the project update. Key highlights included:
A technical issue was noted: the Zoom link published on the public-facing meeting agenda was incorrect, preventing some members of the public from joining.
Residential Feasibility and Affordable Housing Finance Analyses
Derek Braun of Strategic Economics presented findings from two complementary analyses commissioned as part of the GPU.
Market Rate Housing Feasibility
Braun explained that a project "pencils" when its market value exceeds total development costs plus required investor return. He analyzed four development prototypes — a 3-story wood-frame building with tuck-under parking, a 5-story "wrap" product, and two versions of an 8-story podium building — all tested as rentals.
The central finding: none of the four prototypes are currently financially feasible in Petaluma. The reasons are interconnected: construction costs across the Bay Area are high and regionally consistent; project financing has become more uncertain amid interest rate volatility; and achievable rents in Petaluma are lower than in core Bay Area markets, limiting revenue potential. The 5- and 8-story buildings are "farthest off" from feasibility, and the 3-story prototype is the closest — though still not penciling under current conditions.
The analysis tested several city policy levers — reducing municipal impact fees, reducing inclusionary affordable housing requirements, and reducing parking minimums — and found that even combining all three, the feasibility gap is not fully closed, though it narrows meaningfully. Additional policy options discussed included: allowing flexible ground-floor uses rather than requiring retail, streamlining permitting processes, accommodating emerging construction techniques like mass timber, and investing in neighborhood amenities to boost achievable rents.
Braun cautioned that the analysis draws broad lessons and that individual projects may still move forward due to unique circumstances — for example, a long-time landowner with minimal holding costs.
Affordable Housing Finance
For 100% affordable projects (typically developed by nonprofits), the challenge is assembling a "capital stack" of federal, state, and local subsidies to cover the gap between regulated rents and actual development costs — which run roughly $500,000–$700,000 per unit.
The analysis found that Petaluma and Sonoma County together contributed approximately 8% of project costs in recent affordable developments — compared to 30–37% in San Francisco and Santa Clara counties. Braun acknowledged the comparison is imperfect given those counties' greater resources, but noted the gap is significant.
Recommended city actions included: allocating more general fund revenue to affordable housing; exploring voter-approved tax measures (parcel taxes, bonds, or a property transfer tax increase, which is available to Petaluma as a charter city); making it easier for market-rate developers to pay in-lieu fees rather than build on-site inclusionary units; and targeting subsidies to projects in "high resource areas" that score better in competitive state funding processes.
Braun closed on a positive note, citing several recent city actions already moving in this direction: the new impact fee exemption for 100% affordable projects (adopted earlier in 2023), the North Station Specific Plan, internal departmental reorganization, and two new housing staff positions.
GPAC Clarifying Questions
Members asked whether for-sale products like townhomes would fare better — Braun noted townhomes tend to be more feasible than rental multi-family but weren't the focus of this analysis. He added that condominiums are challenging throughout most of the Bay Area right now. Members also asked whether the policy changes modeled would bring projects to full feasibility (answer: not quite, but they help significantly), and what a "land bank" means in practice — Braun described it as a city mechanism to acquire and hold land, removing land costs from future affordable projects, potentially via long-term ground leases.
Heather Hines (Housing Manager) clarified that the city's new fee exemption for affordable housing covers city facilities, traffic, park acquisition, park development, and open space fees — but not water/wastewater capacity fees (which are operationally necessary) or school fees (which are not city-controlled). She also noted that short-term vacation rentals are already prohibited in ADUs permitted from 2017 onward, in response to a member's concern about ADU conversion.
Public Comment on This Item
Three members of the public spoke:
GPAC Discussion
The discussion was wide-ranging and candid. Key threads:
*No votes were taken on this item; this was a discussion and information session.*
Working Group Restructuring
Ron Whitmore (consultant, Raymond Associates) presented a proposed reorganization of GPAC working groups to prepare for the upcoming public review of draft Policy Frameworks. The original working groups — formed about 18 months ago — produced recommendations that have already been incorporated into the consultant team's policy development work.
Going forward, staff proposed clustering the 14-plus policy framework topics into a smaller number of working groups, with names and compositions to be finalized after gauging member interest. The upcoming near-term GPAC focus (September and beyond) will be on flood resilience and land use alternatives as full-group in-person sessions; working groups would then re-engage when the public draft Policy Frameworks are released for review.
Staff emphasized: membership is voluntary; no commitment is required tonight; people can switch from their original working group; and participation in a working group doesn't limit a member's ability to comment on other policy areas.
Member Chris raised the need for publicly posted working group information and accessible meeting locations to allow broader community participation. Staff agreed to explore that. Member Bill Reinhart asked for a written timeline and process map for the policy framework review sequence; Ron Whitmore confirmed that will be provided before the working groups formally reconvene.
Staff will send a follow-up email asking members to indicate interest in working groups, including a new opportunity to serve on a joint GPAC/Climate Advisory Commission ad hoc to review the Climate Action Plan's greenhouse gas reduction measures.
Public comment on this item: Council Member John Chevas (former GPAC member, now elected) expressed enthusiasm for an Engineering and Facilities working group given the scale of upcoming infrastructure decisions. Susan Simpson expressed strong interest in rejoining an Open Space and Natural Environment working group (advocating for the name change away from "natural resources"), and highlighted the importance of wildlife corridor mapping in the broader regional context.
Brian Oh closed the meeting by noting that staff member Christina Paul has relocated overseas (though remaining on the team remotely), and sharing that Planning Commissioner Kevin Kelly is dealing with a significant medical emergency.
*No votes were taken.*
Key Takeaways
AI-generated summary from voice-to-text transcript. Not the official record. Verify important details with the source documents linked above.
What happened at this meeting
PROJECT AND STAFF UPDATES Updates on initiatives related to the General Plan Update (GPU)
Brian, the new Director of Community Development, opened the meeting and introduced the consulting team led by Ron Whitmore from Raymond Associates, who outlined meeting logistics including interpretation accommodations and the agenda structure. Staff provided updates on the GPU's progress, noting the initiative is currently transitioning from policy development to alternatives discussion—a critical community engagement phase—with Derek Braun presenting housing-related analyses and discussions of working group reorganization to follow. Notable achievements include the state's certification of the Housing Element in March and YIMBY recognition of the municipality's housing element as the best in California. Staff outlined upcoming priorities including implementation of housing policies and objective design standards, advancement of the Active Transportation Plan, North Station construction planning in partnership with SMART and Danko, and a Second Station specific plan supported by over one million dollars in grant funding. The next GPAC meeting is scheduled for September 21st at 6:30 PM at the community center, where staff will discuss flood resilience data, land use alternatives, and working group policy frameworks.
RESIDENTIAL FEASIBILITY AND AFFORDABLE HOUSING FINANCE ANALYSES Presentation by Derek Braun from Strategic Economics summarizing the purpose, methods, and findings from analyses of residential development feasibility and affordable housing finance in Petaluma.
Derek Braun from Strategic Economics presented residential feasibility and affordable housing finance analyses examining market-rate and deed-restricted affordable housing development in Petaluma, analyzing three rental prototypes (three-, five-, and eight-story buildings) and finding that all are currently financially infeasible due to high construction costs, project financing challenges, and lower rents compared to other Bay Area locations. The analysis revealed that Petaluma's local funding contribution for affordable housing is only about 8% of project costs (compared to 30-37% in San Francisco and Santa Clara counties) and that a 30-43% reduction in total development costs would be needed to achieve feasibility, though the three-story prototype came closest under specific on-ground conditions. Braun recommended multiple city policy actions including reducing municipal fees and parking requirements, streamlining approvals, accommodating mass timber construction, removing ground floor retail requirements, and leveraging city-owned land banks and fee exemptions to reduce financial barriers. Committee members raised concerns about whether these incremental policy changes would be sufficient to meet Petaluma's Regional Housing Needs Assessment (RHNA) targets and whether more radical solutions—such as sunsetting short-term vacation rental policies, encouraging for-sale townhome products, and exploring alternative housing models like co-ops and adaptive reuse—should be considered.
Discussion of Working Group roles in Policy Framework review and a proposed re organization of Working Groups.
Members discussed how findings from housing reports can inform the Policy Framework review and future land use patterns for the General Plan update, with particular interest in exploring land banking strategies and wholesale changes rather than incremental adjustments. Staff introduced a proposal to reorganize GPAC's 18-month-old voluntary working groups around 14 policy framework topics, positioning them as focused deep dives during public review periods that complement—not replace—broader public engagement through workshops and online forums. Staff explained that upcoming General Plan phases will address substantial topics like flood resilience and land use alternatives better suited as full GPAC discussions, while working groups would help ensure alignment between land use and supporting infrastructure policies. Bill Reiner requested written documentation of timelines and the policy framework review process, including the order of review and consolidation steps back to GPAC before going to Planning Commission and Council, and staff clarified that all policy frameworks would be made available simultaneously to GPAC, relevant commissions, and the public. Public commenters John and Susan identified the Engineering and Facilities working group as critical for addressing climate change challenges like electrification and facility projects, and advocated for the Open Space and Natural Environment working group to map connectivity and wildlife corridors within the regional context.
Agenda items (3)
What happened
# PROJECT AND STAFF UPDATES: General Plan Update InitiativesBrian, the new Director of Community Development, opened the meeting and introduced the consulting team led by Ron Whitmore from Raymond Associates, who outlined meeting logistics including interpretation accommodations and the agenda structure. Staff provided updates on the GPU's progress, noting the initiative is currently transitioning from policy development to alternatives discussion—a critical community engagement phase—with Derek Braun presenting housing-related analyses and discussions of working group reorganization to follow. Notable achievements include the state's certification of the Housing Element in March and YIMBY recognition of the municipality's housing element as the best in California. Staff outlined upcoming priorities including implementation of housing policies and objective design standards, advancement of the Active Transportation Plan, North Station construction planning in partnership with SMART and Danko, and a Second Station specific plan supported by over one million dollars in grant funding. The next GPAC meeting is scheduled for September 21st at 6:30 PM at the community center, where staff will discuss flood resilience data, land use alternatives, and working group policy frameworks.
What happened
# SummaryDerek Braun from Strategic Economics presented residential feasibility and affordable housing finance analyses examining market-rate and deed-restricted affordable housing development in Petaluma, analyzing three rental prototypes (three-, five-, and eight-story buildings) and finding that all are currently financially infeasible due to high construction costs, project financing challenges, and lower rents compared to other Bay Area locations. The analysis revealed that Petaluma's local funding contribution for affordable housing is only about 8% of project costs (compared to 30-37% in San Francisco and Santa Clara counties) and that a 30-43% reduction in total development costs would be needed to achieve feasibility, though the three-story prototype came closest under specific on-ground conditions. Braun recommended multiple city policy actions including reducing municipal fees and parking requirements, streamlining approvals, accommodating mass timber construction, removing ground floor retail requirements, and leveraging city-owned land banks and fee exemptions to reduce financial barriers. Committee members raised concerns about whether these incremental policy changes would be sufficient to meet Petaluma's Regional Housing Needs Assessment (RHNA) targets and whether more radical solutions—such as sunsetting short-term vacation rental policies, encouraging for-sale townhome products, and exploring alternative housing models like co-ops and adaptive reuse—should be considered.
What happened
# SummaryMembers discussed how findings from housing reports can inform the Policy Framework review and future land use patterns for the General Plan update, with particular interest in exploring land banking strategies and wholesale changes rather than incremental adjustments. Staff introduced a proposal to reorganize GPAC's 18-month-old voluntary working groups around 14 policy framework topics, positioning them as focused deep dives during public review periods that complement—not replace—broader public engagement through workshops and online forums. Staff explained that upcoming General Plan phases will address substantial topics like flood resilience and land use alternatives better suited as full GPAC discussions, while working groups would help ensure alignment between land use and supporting infrastructure policies. Bill Reiner requested written documentation of timelines and the policy framework review process, including the order of review and consolidation steps back to GPAC before going to Planning Commission and Council, and staff clarified that all policy frameworks would be made available simultaneously to GPAC, relevant commissions, and the public. Public commenters John and Susan identified the Engineering and Facilities working group as critical for addressing climate change challenges like electrification and facility projects, and advocated for the Open Space and Natural Environment working group to map connectivity and wildlife corridors within the regional context.
Verbatim transcript available
86 transcript segments indexed