Item 14 – Resolution 2022-6 – 14.27 Allocations for 2022

City regulations created a “use it or lose it” rule that prohibit the carry forward of unused allocations to subsequent years. (Section 14.27.040 D) states: "Period of Validity: Allocations are only valid and can be used only from the date of issue through the last day of the allocation period for which they are issued, at which time they expire, unless part of an approved banking plan." [emphasis added] The six-month interim period between passage of SGI in July 2019 and SGI’s effective date of January 1, 2020: Backlog – in its January 2020 staff report the City states there were applications for 1,942 units in 2019 of which 1,380 units were for projects over 40 units. Staff claims to have authorized building permits for 759 units (including 538 units in large multi-family projects) before December 31, 2019. Resolution #2020-08 (passed 1/27/20) established Authority to Continue - Applications submitted in 2019 were guaranteed to receive allocations, HOWEVER those allocations must be applied against the annual cap limits. This process is to be spread out over 3 years. The effect is to reduce the remaining annual allocations available for new applications. The ATC total was set at 840 units, to be divided over 3 years (approximately 280/year). Of a total of 693 possible allocations available in 2020, 280 allocations were committed to ATC projects leaving 413 allocations available for new developments. Of this amount only 184 allocations were actually used. This meant 229 allocations for 2020 were not used and therefore expired at the end of 2020. 2020-47 (passed 11/23/2020) amended 2020-08 to revise the ATC total to include 202 allocations for White Fence Farm. The ATC total was thus increased to 1,042 units. 2021-06 passed 1/25/2021 – Staff adjusted the ATC total again to 937 units (approximately 312/year) by claiming 105 ATC allocations were not used previously. Council voted for “Option 1”, authorizing the deduction of 346 ATC units from the 701 cap limit, leaving 355 units available for new development. However, only 163 NEW allocations were actually granted in 2021 leaving 192 of the 2021 allocations unused and therefore expired and unavailable in other years. 2022-01 Once more staff has adjusted ATC to now be 1,004 units (equivalent to 335 per year over a 3 year period). Staff now requests Council’s previously established 3-year spread rule (#2020-08, #2020-47, and #2021-06) be overturned and instead be condensed down to two years because not all the 2020 and 2021 allocations were actually used in those years. In order to avoid “wasting” those expired allocations, staff now proposes most of the 421 unused and expired units over the past two years (2020’s 229 units + 2021’s 192 units) should be retroactively applied against the 1,004 ATC units over a two year period – 2020 and 2021 instead of the original three years. By retroactively counting the previously expired 2020 and 2021 allocations, the staff proposal allows for the addition of up to 421 more allocations in violation of Section 14.27.040 D’s Period of Validity rule. This would have the effect of freeing up the entire 2020 allocation cap for new development rather than continuing to apply the designated ATC allocation portion.