Commercial Brokers Association

Redwood City Passes Affordable Housing Impact Fee’s

On October 26th, after a highly debated town hall meeting, Redwood City Council approved the proposed Affordable Housing Impact fee program with the following fee levels and minimum project sizes:

Unit Type

Fee / Sq. Ft.

Minimum Project Size

Condos and Apartments

$20

5 or More Net New Units for Residential Projects

Single Family

$25

Townhome, Duplex and Triplex Developments

$25

Office

$20

More than 5,000 square feet of Net New Construction for Commercial Projects

Hotel

$5

Retail and Restaurant

$5

Here is the draft ordinance for Redwood City.

City Council also requested staff to come back with the following modifications to the program:

1.                Create an incentive for projects using area-standard wages

2.                Modify inclusionary percentages to encourage on-site development of units

3.                Clearly exempt nonprofit affordable projects from the fee

4.                Change the language of exemption from  “churches” to “houses of worship”

5.                Schedule an annual review of effectiveness with how the money is collected and spent

Exemptions for Impact Fees:

A. The housing impact fee shall not apply to developers of residential development projects consisting of four or fewer dwelling units; the creation of four or fewer parcels, provided that no more than four dwelling units are allowed; or accessory dwellings created under Article 37 of the Redwood City Zoning Code.

 

B. The housing impact fee shall not apply to developers of nonresidential development projects adding 5,000 square feet or less of net new square footage.

 

C. The housing impact fee shall not apply to developers of residential or nonresidential development projects which fall within one or more of the following categories:

1. Residential or nonresidential development projects located on property owned by the state of California, the United States of America, or any of its agencies and used exclusively for governmental or educational purposes.

2. Any structure proposed to repair or replace a building that was damaged or destroyed by fire or other calamity, so long as the square footage and use of the building remains the same, and construction of the replacement building begins within one year of the damage’s occurrence. 

3. Residential or nonresidential development projects to the extent they have received a vested right to proceed without payment of housing impact fees pursuant to state law, including those that are the subject of development agreements currently in effect with the City, if such development agreements were approved prior to the effective date of this Article and where such agreements expressly preclude the city from requiring payment of the housing impact fee.

4. Residential or nonresidential development projects for which applications have been deemed complete prior to September 21, 2015.

5. Other uses that may be specified by resolution of the City Council.

 

Alternatives to Payment of Housing Impact Fee:

A. As an alternative to compliance with the basic provisions included in Section 18.269 of this Article, developers of residential or nonresidential development projects may propose to mitigate the affordable housing impacts of such development through the construction of affordable units on site or through an alternative mitigation program proposed by the developer and the community development director, such as the provision of off-site affordable units, donation of land for the construction of affordable units, or purchase of existing units for conversion to affordable units.

1. The City Council may adopt by resolution the percentage of affordable units needed to mitigate the impact of residential or nonresidential development projects on the need for affordable housing.

2. Any affordable rental or for-sale units proposed as an alternative to the payment of the housing impact fee shall be subject to the requirements described in Section 18.272 of this Article.

3. If a developer proposes to provide affordable rental units, then, to ensure compliance with the Costa-Hawkins Rental Housing Act (Chapter 2.7 of Title 5 of Part 4 of Division 3 of the Civil Code), the City may only approve such a proposal if, as required by Civil Code Sections 1954.52(b) and 1954.53(a)(2), the developer agrees in a contract with the City to limit rents in accordance with Section 18.272 of this Article in consideration for a direct financial contribution from the City or a form of assistance specified in the State’s Density Bonus Law (Chapter 4.3, commencing with Section 65915, of Division 1 of Title 7 of the Government Code). The developer may request that the City waive the affordable housing impact fee as a direct financial contribution to the rental residential development project.

 

B. If the developer seeks an alternative to the payment of the housing impact fee pursuant to subsection A of this Section, then the application for the first approval of a residential or nonresidential development project for which the alternative is sought shall include an “affordable housing plan” that describes how the alternative will comply with the provisions of this Article. No affordable housing plan is required if the developer proposes only to pay the housing impact fee.

1. Residential or nonresidential development projects requesting an alternative to payment of the housing impact fee require that an affordable housing plan be submitted in conformance with this Article prior to the application being deemed complete.

2. The affordable housing plan shall be processed concurrently with all other permits required for the residential or nonresidential development project. Before approving the affordable housing plan, the decision-making body shall find that the affordable housing plan conforms to this Article. A condition shall be attached to the first approval of any residential or nonresidential development project to require recordation of an affordable housing agreement, as described in this subsection, prior to the approval of any final or parcel map or building permit for the residential or nonresidential development project.

3. The approved affordable housing plan may be amended prior to issuance of any building permit for the residential or nonresidential development project. A request for a minor modification of an approved affordable housing plan may be granted by the community development director if the modification is substantially in compliance with the original affordable housing plan and conditions of approval. Other modifications to the affordable housing plan shall be processed in the same manner as the original plan.

4. If required to ensure compliance with the approved affordable housing plan, affordable housing agreements acceptable to the community development director or designee shall be recorded against the residential or nonresidential development project prior to approval of any final or parcel map, or issuance of any building permit, whichever occurs first. The affordable housing agreement shall specify the number, type, location, size, and phasing of all affordable units, provisions for income certification and screening of potential purchasers or renters of units, and resale control mechanisms, including the financing of ongoing administrative and monitoring costs, consistent with the approved affordable housing plan, as determined by the city manager or designee.

 

Bret Gladfelty, NCCAR CGAD