HomeMy WebLinkAbout10-03-2017 Item 14 - Letter of Support for Inclusionary Housing
Meeting Date: 10/3/2017
FROM: Michael Codron, Community Development Director
Prepared By: Jenny Wiseman, Acting Housing Programs Manager
SUBJECT: DISCUSSION OF CITY SUPPORT FOR COUNTY OF SAN LUIS OBISPO
INCLUSIONARY HOUSING PROGRAM
RECOMMENDATION
1. Discuss the public policy purpose of an Inclusionary Housing Program; and
2. Consider authorizing City staff to prepare a letter to the County Board of Supervisors
regarding the County’s Inclusionary Housing Program to be signed by Mayor Harmon.
DISCUSSION
At the September 19th City Council Meeting, staff was directed to return with information
regarding the County of San Luis Obispo’s Inclusionary Housing Program update so that
Council could consider sending a letter of support to the County Board of Supervisors.
What is Inclusionary Housing?
The purpose of inclusionary housing is the promote the public welfare by increasing the
production and availability of affordable housing units. An inclusionary housing program
establishes an affordable housing requirement for new residential and commercial projects
within a community. Most commonly, these requirements are based on a certain percentage of
units built, or the size of a commercial project, and are satisfied by providing units or paying fees
in-lieu of affordable units.
City of San Luis Obispo Inclusionary Housing
The City of San Luis Obispo has had a successful inclusionary housing policy since 1999. The
policy and ordinance requirement are contained in Zoning Regulations Chapter 17.91, and based
on Housing Element Table 2 and Table 2a.
Developers whose projects are subject to the inclusionary housing requirement have the option to
either construct the units within their projects, dedicate land for the units to be built offsite, or to
pay an affordable housing in-lieu fee. All in-lieu fees collected go into the City’s Affordable
Housing Fund (AHF) and are issued at the Council’s discretion as low interest loans or grants to
developers building affordable housing in the community. Since 1999, approximately 280
affordable dwelling units have been built and over $10 million in affordable housing in-lieu fees
have been collected. The City has awarded over $9 million in grants and loans to 16 affordable
housing developments. The reality is that inclusionary housing fees are leveraged and used to
match and obtain grants and provide strategic partnerships with housing providers. In addition,
over 200 new affordable inclusionary units will be developed in specific plan areas over the next
five to ten years. The following tables are the City’s inclusionary housing requirements.
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Table 2A
Inclusionary Housing Adjustment Factors
Project
Density
(Density
Units/Net
Acre)1
Inclusionary Housing Requirement
Adjustment Factor2
Average Unit Size (sq. ft.)
Up to
1,100
1,101-1,500 1,501-2000 2,001-2,500 2,501-
3,000
>3,000
36 or more 0 0 .75 1 1.25 1.5
24-35.99 0 0 .75 1 1.25 1.5
12-23.99 0 .25 1 1.25 1.5 1.75
7-11.99 0 .5 1 1.25 1.5 1.75
<7 0 .5 1.25 1.5 1.75 2
1Including allowed density bonus, where applicable.
2Multiply the total base Inclusionary Housing Requirement (either housing or in-lieu percentage) by the adjustment factor to
determine requirement. At least one enforceably-restricted affordable unit is required per development of five or more units.
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Due to continued uncertainty at the state and federal level in terms of funding, the City’s
Affordable Housing Fund and Inclusionary Housing Program continue to be key factors in the
development of affordable housing in the City, and a crucial financing mechanism for Low
Income Tax Credit projects developed by our non-profit housing partners (such as the Housing
Authority of San Luis Obispo and People’s Self Help Housing).
County of San Luis Obispo’s Inclusionary Program
The County adopted Title 29, the Affordable Housing Fund and the Inclusionary Housing
Ordinance (“IHO”) in response to the affordable housing shortage in 2008. Developers choose
between either providing affordable housing units within their projects or paying a fee to
construct such units. The fees are deposited into the Title 29 Affordable Housing Fund. The
County’s program is based on a price per square footage.
When adopted in 2008, the IHO had a phased implementation schedule to ease into the fees and
number of affordable units required; however, due to the recession, the County Board of
Supervisors had kept the IHO at the very initial “Year 1” requirements (see below) up until
December 2016. At this time, the IHO has been set at “Year 2” rates. Year 5 would equate to
full implementation and full fee amount required.
Source: County of San Luis Obispo
Since 2009, the County has used $450,000 in in-lieu fees to support affordable housing projects,
however, the number of affordable units developed from the IHO have been minimal.
Next Steps
Pursuant to County Title 29, the Board considers making adjustments each year to the Title 29
fee schedules. The fees may be adjusted for any reason (such as construction costs, nexus study,
etc.) or upon Board discretion. The County is currently preparing a Nexus Study on their
Inclusionary Housing Ordinance and will present those findings to the Board in December 2017.
There has been discussion by individual County Supervisors and some local organizations to
completely eliminate the County’s Inclusionary Housing Program; however, at this time such an
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action is not before the Board.
ALTERNATIVES
1. Do not send a letter to the Board of Supervisors or take any other action to communicate the
City’s position on any changes to the IHO
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Discussion of City Support for the County of San Luis Obispo’s Inclusionary Housing ProgramOctober 3, 201710-03-2017 Item 14, Staff Presentation
Recommendation21.Discuss the public policy purpose of an Inclusionary Housing Program; and 2.Consider authorizing City Staff to prepare a letter to the County Board of Supervisors regarding the County’s Inclusionary Housing Program. 10-03-2017 Item 14, Staff Presentation
What is Inclusionary Housing?3The purpose of inclusionary housing is to promote the public welfare by increasing the production and availability of affordable housing units. Establishes an affordable housing requirement for new residential and commercial projects within a community.Usually based on a certain percentage of units built, or the size of a commercial project, Can be satisfied by providing units or paying fees in-lieu of affordable units.10-03-2017 Item 14, Staff Presentation
City of San Luis Obispo’sInclusionary Housing Program4Approved in 1999, the City’s policy and ordinance are contained in Zoning Regulations Chapter 17.91, and based on Housing Element Table 2 and Table 2a.Projects subject to the inclusionary housing requirement have the option to construct the units within their projects, dedicate land for the units to be built offsite, or pay an affordable housing in-lieu fee. In-lieu fees go into the City’s Affordable Housing Fund and are issued as loans or grants to affordable housing developers 10-03-2017 Item 14, Staff Presentation
City of San Luis Obispo’s Inclusionary Housing ProgramTable 2A Inclusionary Housing Adjustment Factors Project Density (Density Units/Net Acre)1 Inclusionary Housing Requirement Adjustment Factor2 Average Unit Size (sq. ft.) Up to 1,100 1,101-1,500 1,501-2000 2,001-2,500 2,501-3,000>3,000 36 or more 0 0 .75 1 1.25 1.5 24-35.99 0 0 .75 1 1.25 1.5 12-23.99 0 .25 1 1.25 1.5 1.75 7-11.99 0 .5 1 1.25 1.5 1.75 <7 0 .5 1.25 1.5 1.75 2 10-03-2017 Item 14, Staff Presentation
City of San Luis Obispo’s Inclusionary Housing Program6Since 1999:Approximately 280 deed restricted affordable units have been created$10 million in affordable housing in-lieu fees have been collectedCity Council has awarded over $9 million in grants and loans to 17 affordable housing developments/rehabilitation projects (300+ units)10-03-2017 Item 14, Staff Presentation
County of San Luis Obispo’s Inclusionary Housing Program7The County adopted Title 29, the Affordable Housing Fund and the Inclusionary Housing Ordinance in response to the affordable housing shortage in 2008. Developers either provide affordable housing units within their projects or pay an in-lieu fee.The fees are deposited into the Title 29 Affordable Housing Fund. The County’s fee program is based on a price per square footage.10-03-2017 Item 14, Staff Presentation
County of San Luis Obispo’s Inclusionary Housing Program8County planned for phased implementation, however, due to the recession, the Board kept requirement at the very initial “Year 1” level until December 2016. 10-03-2017 Item 14, Staff Presentation
County of San Luis Obispo’s Inclusionary Housing Program9County has received and spent $1.143 million in Title 29 in-lieu fees to support affordable housing projects.Averages approximately $100,000/yearRecent significant increase in funds came from one specific project in South County (and money must remain for South County projects)County has awarded $137,925 in funds to projects within the San Luis Obispo city limits.10-03-2017 Item 14, Staff Presentation
County’s Next Steps10The Board considers making adjustments each year to the Title 29 fee schedules. The County is currently preparing a Nexus Study on their Inclusionary Housing Ordinance and will present those findings to the Board on December 12, 2017. There has been discussion by individual County Supervisors and some local organizations to completely eliminate the County’s Inclusionary Housing Program; however, at this time such an action is not before the Board.10-03-2017 Item 14, Staff Presentation
Recommendation111.Discuss the public policy purpose of an Inclusionary Housing Program; and 2.Consider authorizing City Staff to prepare a letter to the County Board of Supervisors regarding the County’s Inclusionary Housing Program. 10-03-2017 Item 14, Staff Presentation
1210-03-2017 Item 14, Staff Presentation
SLO County In Lieu Fees1310-03-2017 Item 14, Staff Presentation