Welcome to the new decade! The city is only just emerging from its winter break, but 2020 is off to a roaring legislative start in Sacramento. Perhaps the greatest focus has fallen on amendments to SB 50–a housing bill aimed at increasing housing production of all types by setting aside specific local restrictions on home construction in areas near transit and jobs centers. These revisions would allow affected cities and counties to create their own alternative plans as long as they produce as much or more housing than SB50 would otherwise, and so long as the plan doesn’t disproportionately affect less affluent areas or lengthen commute distances.
The bill, if it becomes law, would enter into force by 2023 instead of 2021. These changes come in response to various local jurisdictions that requested additional flexibility to craft their own solutions instead of relying on the default provisions of SB50. In its current form, SB50 would primarily impact Cupertino by allowing for duplexes, triplexes, and four-plexes in neighborhoods designated as jobs-rich zones. In neighborhoods zoned for single-family use, such buildings could be no larger than the largest possible single-unit home allowed on the site by Municipal Code. In addition, in order to prevent dislocation, homes occupied by a renter within the last seven years would be ineligible for treatment under SB50. These changes would provide a significant mechanism for Cupertino to meet its local housing needs, including those mandated under state law.
In additional housing-related news, our neighbor to the south, Saratoga, received an application under SB35 to replace a largely-vacant 6-acre shopping center with 91 homes(9 of them affordable to those with very low incomes, as measured against the area median), just under 5000 square feet of retail space and assorted on-site green space. Whatever one’s feelings on SB35, it appears to be working its purpose.
Cupertino is widely known for its highly regarded schools. State funding formulas, however, do not adequately fund our schools in a time of increased costs, and decreasing enrollment. Three local measures will appear on the March 3 primary ballot aimed at stemming these financial challenges:
- Measure G – the Foothill-De Anza (FHDA) Community College District Affordable Career, College Transfer, Classroom Repair Measure – is a $898 million general obligation bond that would cost property owners approximately 1.6 cents per $100 of assessed value (not market value) annually through 2053-54.
- Measure H – the Educational and Teacher Excellence Parcel Tax – is a $48 parcel tax for FHDA that would be levied for five years and raise approximately $5.6 million annually.
- Measure O – a Cupertino Union School District (CUSD) $125 parcel tax intended to generate $4.3 million annually for 5 years. The district currently suffers from a budget shortfall of around $5 million per annum, so these funds will go a long way toward filling that gap, and retaining top-quality teachers.
Your voice is important. Information on expressing your opinion via emails and oral communications with the city can be found at https://cupertinomatters.org/express-your-opinion/
The next City Council meeting is January 21, followed by commission interviews on January 27 and 28.
UPCOMING PLANNING COMMISSION – Tues., Jan. 14, 2020, 6:45 p.m. – Regular Meeting – Community Hall
Item #1: Election of Chair, Vice Chair and Committee: These positions rotate each year, usually by seniority. However, in 2019, the newly-appointed members of the commission broke that protocol and selected two inexperienced commissioners in a divided vote. Just as the city council positions did not follow tradition, will this also happen to the Planning Commission? The lack of experience with public office was on ample display in 2019 as Chair Ray Wang brought the city into further disrepute by calling for the harassment of his political critics. Similarly, Vice-Chair Vikram Saxena has been absent from the last two meetings (among others), did not attend a city-funded training specifically for Planning Commissioners, and failed to timely file his financial conflict of interest disclosures despite multiple warnings (see attached). At the same time, Commissioner Kitty Moore’s lawsuit on behalf of Friends of Better Cupertino against the city over development at Vallco remains unresolved and has required her recusal from many Planning Commission discussions. Commissioner Takahashi, by contrast, would have seniority and is nearing the end of his second term.
Item #4: Municipal Code Amendments to regulate Short-Term Rental activity in the City. A new Chapter 5.08 (Short Term Rental Activity) is proposed and amendments are proposed to Chapter 3.12 (Transient Occupancy Tax), Chapter 19.08 (Definitions), Chapter 19.12 (Administration), Chapter 19.20 (Permitted, Conditional and Excluded Use in Agricultural and Residential Zones) and Chapter 19.120 (Home Occupations), of the Cupertino Municipal Code: This agenda item has been on the back-burner and is finally surfacing since there is little development activity in the city. Short Term Rentals (STRs) are lodging that is rented for fewer than 30 days and therefore do not fall under regular rental regulations.
There are two aspects to STRs that concern council:
(1) Collection of the Transient Occupancy Tax (TOT) which hotels are required to collect, but which relies on individual property owners to remit for AirBnB and other short term listings. Staff negotiated collection of TOT fees with AirBnB in 2018. Otherwise, the operator of the STR is supposed to voluntarily submit the TOT. Much as with the voluntary remit of use tax in California, this remittitur is not happening.
(2) Regulatory structure for this business activity, which is this agenda item. STR activity is currently allowed as a home occupation. The STR operator is supposed to obtain a business license ($150 per year), must be the primary resident of the property, who must be on-site during the lease period (even if renting during a vacation). The number of transient guests is limited to 2 (regardless of bedrooms or number of children for families), and use must be incidental.
The Planning Commission considered recommendations for a regulatory framework in Nov. 2018, and the council held a study session on April 2, 2019. The proposed changes significantly regulate this low-level business activity. The average STR operator makes $15,000 a year, which is less profitable than long term rental and less work. The average rental period is 107 days a year or about 30% of available days, which would equate to an average cost per night is $140, which is affordable for those not on a corporate credit card, particularly families. There are only about 300 such rentals in Cupertino, or roughly 2% of housing stock (13,000 single-family homes). Code Enforcement has handled the handful of complaints about noise, etc.
Short term rentals utilize many platforms, so monitoring is manual, plus units sometimes shift from short-term to long-term (i.e. house repairs for 2-3 months). The staff report provides an estimate of monitoring costs for these regulations.
- Proactive: $376,000 or $1,253 per unit
- Semi-proactive: $261,000 or $870 per unit
- Reactive: $147,000 or $490 per unit
Does this level of regulation for this activity make sense? Should the city of Cupertino be spending significant time and resources on this low-level activity? Mountain View implemented such a structure, and it’s being ignored by 1 in 14 operators https://mv-voice.com/news/2020/01/03/airbnb-hosts-ignore-city-rules Same is true with other jurisdictions.The report by The Expedia Group suggesting a simpler approach is consistent with the reality of this marketplace. Full reports on this agenda item are included in the attachments.
Item #5:Study Session on the General Plan Annual Review/Implementation Plan and consider General Plan Policies and Strategies that could benefit from clarification. This is a continuation of the review on Dec. 10, which was a continuation from the Oct. 28 meeting. Will this page by page review of the 107-page document start again on page 23, LU19.1, with the Vallco Shopping Special District, given the ongoing SB35 litigation against the city or will it be deferred again?
CUPERTINO COURIER January 10, 2020
The community brief on Page 5 is “Charitable meals grants” for grants of up to $1000 for non-profits who rent commercial kitchens to prepare charitable meals. This is a Santa Clara County program, with applications accepted through March 18.
Be prepared for a barrage of election mailers and campaign calls in advance of the March 3 primary!
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