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INTERNAL OPERATIONS COMMITTEE

Meeting Date:	10/08/2018
Subject: Inclusionary Housing Ordinance In-Lieu Fee Update
Submitted For:	John Kopchik, Director, Conservation & Development Department
Department:	Conservation & Development
Referral No.:	IOC 18/11
Referral Name:	Inclusionary Housing Ordinance In-Lieu Fee
Presenter:	Kara Douglas	Contact:	Kara Douglas 925-674-7880

Information

Referral History:

On September 25, 2018, the Board of Supervisors referred this matter to the Internal Operations Committee for review and recommendation. Asst. Deputy Conservation and Development Director Kara Douglas will retire this month and wished to update the Committee before her departure.

On October 24, 2006, the County Board of Supervisors adopted an Inclusionary Housing Ordinance (the IHO) that requires the inclusion of affordable housing units as part of a residential development, or the payment of a fee in-lieu of providing the affordable units. The IHO includes formulas for the annual calculation of in-lieu fees for rental and for-sale housing. In 2009, the California Superior Court concluded that the rental housing requirements in inclusionary ordinances were superseded by the vacancy decontrol provisions of the Costa-Hawkins Act (Palmer/Sixth Street Properties, L.P. v City of Los Angeles). In order to comply with the Palmer decision, the County maintained the language in the IHO, but changed the in-lieu fee to $0 for rental developments. The current in-lieu fee for for-sale housing is $3,874 per market rate unit.

Referral Update:

In 2017, the governor signed into law AB 1505, which affirmed local agencies’ authority to apply affordable housing requirements to rental projects, effective January 1, 2018. The Department of Conservation and Development seeks input from the Internal Operations Committee on the reinstatement of the rental in-lieu fee based on the formula in the IHO. The 2018 calculation for the fees is $24,200.55 for rental housing and $6,218.91 for for-sale housing.

Recommendation(s)/Next Step(s):

CONSIDER the reinstate of fees in-lieu of providing affordable rental units as required under the County's Inclusionary Housing Ordinance.

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Fiscal Impact (if any):

Revenues derived from fees in lieu of providing affordable housing/rental units are restricted to providing housing opportunities to low-income households and for fund administration. The extent to which a reinstatement of fees may affect the area housing and rental market is unknown.

Attachments
Contra Costa County Inclusionary Housing Ordinance
AB 1505 Land Use Zoning Regulations