Affordable Housing Ordinance Updates Finalized

The City Council also heard the issue of the City’s Affordable Housing Ordinance on March 3rd. While this issue is a general ordinance applicable to all future development, it has to be considered largely in regards to the proposed developments near the future Warm Springs BART station which could include as many as 4,000 homes.

The City’s current ordinance basically says that developers need to provide 15% of their units as affordable units. The prior ordinance from 2007 said that the rate would be raised from 15% to 20% on January 1, 2015 if the nexus study warranted it. The nexus study warranted an increase up to 25% for detached housing but only to 18% for condominiums/townhomes. Given this, I was hoping that we would move immediately to 20% for detached housing and to 18% for condominiums/townhomes. However, the ordinance was written to phase the increases in over a few years. For the immediate future, the rates were to remain largely the same.

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Developers have been given the option of paying in-lieu fees instead of building affordable housing on site. In that case, the City then uses these fees to build affordable housing elsewhere. Almost all of the recent projects had developers paying an in-lieu fees as opposed to on site construction.

To try and encourage more affordable on site, staff introduced a provision in the current ordinance that would allow developers providing on-site rental properties to only have to provide 12.9% affordable housing. While this might encourage quicker development of affordable housing and that allows deeper levels of affordability, I feel this is a step backwards when we should be moving forward.

There was a suggestion that we try out this new ordinance and see if it works to bring more on site affordable development. This ignores that fact that there are two very large developments coming forward in Warm Springs totaling over 3,000 homes. Both of these developers are fully prepared to build these at the 12.9% rate. So we know what’s going to happen if the ordinance is approved! (Both developers complained that they couldn’t afford to go to 15%.)

This matter was heard by the City’s Human Relations Commission and the Planning Commission. Both of these bodies unanimously recommended to change the above rate from 12.9% to 15%. While this is still less than what I was hoping for overall, I would have voted for this as a compromise. During discussion, it was suggested that we change the ordinance to have the developer provide only 12.9% on site, but have them also pay a fee of 2.1% to bring their total contribution to 15%. However, this suggestion did not come forward as a motion.

The one vote taken was to go with staff’s recommendation of the 12.9% figure. This was approved by a 3-2 vote with Council member Lily Mei and I voting no.

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