October 4, 2005

SUBJECT: 2005-0025 – City of Sunnyvale - Study Issue to consider whether multi-family residential developments should be required to provide community rooms.

REPORT IN BRIEF

The purpose of this study issue is to evaluate whether community rooms/club houses should be required in multi-family residential developments to ensure that adequate meeting area opportunities are provided on-site.  The study also reviews what size of development and size of meeting facility are appropriate.

The inclusion of community rooms/club houses provides residents with enhanced recreation opportunities for large parties and resident meetings.  However, to minimize cost impacts for the initial project as well as for future residents, staff is proposing a project minimum of 100 units where a community room/club house would be required.  Small developments tend to have reduced land opportunities to locate this type of facility, which negatively impacts project open space.  In addition, the pro-rata cost to each resident for upkeep and maintenance of the facility is reduced as the size of the project increases.

The Study Issue was reviewed by the Planning Commission on September 26, 2005.  By a 6-1 vote, alternative 2, with modifications, was selected to require multi-family residential projects with over 100 units to provide a community room/club house.  More discussion can be found in the “Public Contact” section of this report.  In accordance with Planning Commission recommendation, staff is recommending additions to Municipal Code Chapters 19.12 and 19.38 to require all multi-family residential projects with 100 units and over to provide a community room/club house with a meeting space minimum of 450 square feet and to include a kitchen and bathrooms, with provisions for a waiver under certain circumstances.

BACKGROUND

The study issue was initiated as a result of a member of the public bringing it to the attention of the City Council.  At that time, there were some multi-family residential projects that did not include a community room/club house as part of the project proposal.  This study issue analyzes whether to require community meeting rooms (such as club houses) in multi-family residential developments.

EXISTING POLICY

Currently, the City does not specifically require multi-family developments to provide community rooms or club houses.  In fact, there are no specific zoning ordinance requirements for any type of on-site recreational amenities.  There are usable open space requirements that vary from 380 to 500 square feet average per unit, depending on the zoning district.  These open space requirements may include patios and balconies as part of each unit, as well as common landscaped and pool areas.

The City has required the addition of this type of facility as a condition of approval for multi-family residential projects on a case by case basis.  Part of the basis for this requirement is related to the following action statement contained within the General Plan.

Land Use and Transportation Element

Action Statement N1.4.5: Require amenities with new development that serve the needs of residents.

DISCUSSION

Five topics are covered in this section:

1. Community room/club house requirements in surrounding communities.

2. Private Developer comments in regard to provision of community room/club house facilities.

3. Summary of recent multi-family projects and whether a community room/club house was provided as part of the project.

4. Alternatives for community rooms/club houses as part of multi-family residential developments.

5. Analysis of various alternatives to require community rooms/club houses.

1) Community room/club house requirement for surrounding communities.

Of the seven nearby communities surveyed, none had a community room/club house requirement.  These communities were selected based on their geographic proximity to Sunnyvale.  Even though these neighboring cities do not have the requirement, even if the City imposes a requirement for community rooms/club houses, based on the high region-wide demand for housing, this probably would not negatively impact housing projects within the City.  The table below summarizes the cities surveyed.

2) Private Developer comments on community rooms/club houses

To learn what private developers are facing when they propose multi-family developments and the impact that a community room or club house may have on the project (both short term and long term), staff requested input on the issue from several local developers, including those without pending applications.

Key points that were echoed by most developers include the many factors that affect their decision to include or not include a club house.  Common issues heard were availability of space on the site and financial impacts.  Most of the remaining available residential sites within the City are infill sites with limited space availability. 

In regards to the financial aspect of the club houses, the cost to construct the facility and the long term maintenance costs were cited as the biggest issues.  Developers of rental and ownership housing are concerned about both impacts because the long term impacts (maintenance – higher rental rates and increased homeowner fees) will affect the appeal of the project to prospective homebuyers and renters.  It is estimated that the initial development cost to provide a community room/club house is approximately $200 per square foot; thus, a 1,000 square foot facility would cost approximately $200,000.  For ownership projects, the long-term maintenance financial impact can be as high as approximately 25% of homeowner association fees.

Most developers reported that approximately 100 units is the break even point for providing a community room/club house.  A project with less than 100 units would be financially difficult for a developer to provide a community room/club house and would put a larger financial burden on the homeowner in the form of higher homeowner association fees.  Conversely, a project with over a 100 units appears to make financial sense because the costs can be spread out over a larger number of homeowners.

In apartment developments, most provide some type of community room or club house as an amenity to attract prospective residents and to be competitive with other complexes.  In addition, since apartment units are typically smaller than comparable ownership projects it is vital to have a community room/clubhouse as a place with adequate space to hold meetings and parties.

3) Summary of recent multi-family projects and whether a community room/club house was provided as part of the project.

Within the past year, the City reviewed and approved nine multi-family residential developments.  Of these projects, three were conversions from either apartments or hotels.  The table below and continuing on the following page summarizes projects approved or under construction from the past year as well as various existing residential projects (for history purposes), listed by number of units.

* - Size denotes square footage for entire building/room, not only meeting room area

Based on past projects, there were three projects that did not provide a community room or a club house and two that provided a club house but no meeting area.  Of these, one (with a club house but no meeting area) had more than 80 units, while the others all had less than 80 units.  However, there were three projects (all conversion projects) that were below 80 units that did provide a community room/club house.  The Carlisle Way condo conversion retained the existing apartment complex community room.  The conversion from hotel (on Weddell) was an affordable apartment development.  Apartments have a much lower threshold for providing community rooms, plus as an affordable project the community room was to be available for other services.  The conversion of the Woodfin Suites had the requirement imposed on it.  The Council specifically noted that the unit sizes were small and therefore a facility was needed.

4) Alternatives for community rooms/club houses as part of multi-family residential developments.

OPTIONS:

A) Require all multi-family residential projects to provide a community room/club house.

Require multi-family residential projects to provide a community room/club house that will, at a minimum, be able to accommodate resident meetings.  The community room/club house shall include, at a minimum, a meeting room, bathrooms, and kitchen facilities.  In addition, the meeting room sizes shall be as follows:

Recommended meeting room sizes:

1. For projects 100 units and greater in size - minimum meeting room size 450 square feet = 1 person per 15 square feet x 30 people.

2. For projects between 20 to 100 units in size – minimum meeting room size 225 square feet = 1 person per 15 square feet x 15 people.

3. For projects below 20 units – minimum meeting room size 150 square feet = 1 person per 15 square feet x 10 people.

B) Require multi-family residential projects over 100 units to provide a community room/club house.

Require multi-family residential projects over 100 units in size to provide a community room/club house that will, at a minimum, be able to accommodate resident meetings and include bathrooms and kitchen facilities (recommended minimum meeting room size 450 square feet = 1 person per 15 square feet x 30 people).

C) Require a community room/club house for multi-family residential projects with living unit sizes that average less than 1,000 square feet.

For multi-family residential projects with average living unit sizes less than 1,000 square feet, the project would provide a community room/club house that will, at a minimum, be able to accommodate resident meetings.  The community room/club house shall include, at a minimum, a meeting room, bathrooms, and kitchen facilities.  The meeting room sizes shall be as provided in option A.

D) Provide the option of a developer paying an in-lieu fee for development of meeting room in the closest park and require a fee for ongoing maintenance and upkeep.

Require multi-family residential projects to include a community room/club house, however, the developer would have the option of paying an in-lieu fee rather than providing the facility.  The fee could be used to pay for new facilities within existing parks and maintenance of said facilities.  If the Council decides to pursue this option, it would require a new study to establish the procedure.

E) Adopt a policy that encourages community rooms/club houses for all multi-family residential projects.

Adopt a policy that encourages multi-family residential developments to provide a community room/club house within the project.  The policy would not provide size requirements or provide a unit threshold for requiring a community room/club house.  The policy would encourage all multi-family residential development to provide a community room/club house.  The Planning Commission or Council could decide on a case by case basis whether a community room/club house is desirable.

F) No change to the current ordinance.

Maintaining the current status would require the provision of a community room/club house on a case-by-case basis.  This approach does not provide clear direction to the development community.  It would have to be a condition of approval or proposed/agreed to by the applicant.  There could be projects that do not have community rooms/club houses.

5) Analysis of various alternatives to require community rooms/club houses.

Opportunities

Implementing the community room/club house requirement for all projects will provide future residents the benefit of having an on-site facility where meetings and parties can occur with ample space and weather protection.  Having a community room/club house will provide a recreational amenity to the residents, thus enhancing the overall project.

Having community rooms and club houses as a requirement within the zoning ordinance would enable developers to appropriately plan to include the facility as part of the overall development of the site, in terms of cost and siting.

As part of the requirement a meeting room size minimum should be established to prevent projects from providing “token” space to meet the community room/club house requirement. 

Constraints

Requiring projects to include a community room/club house could raise the initial pricing of the units and raise rent rates, making units less affordable to prospective residents.  In addition, for ownership projects, it could put a long-term financial burden on the homeowner through higher homeowner association fees.

Having the community room/club house requirement could also put additional constraints on the site development of the project by needing more land for an additional structure.  The additional structure could reduce usable open space, reduce the number of units on the site, and could result in the developer having less area to provide a well designed site plan.  The community room, up to a certain size, could count toward the usable open space requirement.

RELATIONSHIP TO THE GENERAL PLAN AND CURRENT GUIDELINES