Getting Inclusionary Housing Right

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Cities across Santa Clara County are considering this powerful tool to build more new affordable homes without subsidy.

But done wrong it can fall short, or even stop the development of new homes in its tracks. Learn how it works, and how to get it right!

Many of our local cities are joining forces right now in a shared nexus study, the wonky and in-depth analysis that assesses the feasibility of local residential development and the potential for developers of market-rate housing to add a share of affordable homes to their buildings.

If cities require too few affordable homes or affordability that’s too shallow, they leave public benefits on the table. Too much, and developers can’t build any housing at all.

Come hear about local cities that are getting it right: successfully using inclusionary housing policies to achieve mixed-income communities, generate funding to subsidize deeper levels of affordability, and gain valuable land for affordable homes!

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March 31, 2017

Palo Alto Approves New Affordable Housing Impact Fees

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After the new City Council voted to reopen the discussion on impact fees in January, the Palo Alto City Council finally adopted a new set of impact fees for residential and non-residential development to fund affordable housing at its March 28th meeting.  The Council voted 5-4 to set the fees at the following levels:

  • Residential for sale (in-lieu fees) – single family detached – $75/square foot
  • Residential for sale (in-lieu fees) – attached (townhomes, condos) – $50/square foot
  • Residential rental – $20/square foot
  • Office and R&D – $35/square foot
  • Hotel and Retail – $20.37/square foot (no change)

The Council also approved a provision that would give the Council the discretion to allow developers to pay in-lieu fees rather than produce the required percentage of inclusionary units, under special circumstances — including instances where the in-lieu fees would allow for the creation of more affordable units than the inclusionary requirement, or if a pending affordable housing project is in need of funds.

SV@Home advocated for this sort of flexibility regarding options for “alternative compliance” with the existing inclusionary housing requirement in order for developers and the city to negotiate and agree upon the option — whether providing inclusionary units on site, paying in-lieu fees, working with an affordable housing developer to provide deed-restricted units off-site, or dedicating land — that both suits the particular project and supports the city in meeting its affordable housing goals.  We expect that further reading(s) of the ordinance will take place before the new fee levels are officially adopted.

We thank the City Council, Planning and Transportation Commission, and City of Palo Alto staff for their efforts over many months to adopt these new fees, which will go a long way in generating the resources the City needs to to meet the challenges it faces in adequately housing.