Inclusionary Housing Ordinance Amendments
City Council Meeting
May 19, 2026
Presentation Overview
First Reading – Municipal Code Section 30-16 Amendments Proposed amendments recommended by Planning Board represent an important update of 2004 ordinance Better reflects 2026 Alameda housing needs, economic conditions and best practices Staff is recommending approval of amendments and further work on the in-lieu fee provisions of the ordinance for future consideration 2 Background – Housing Element
In 2022, City Council adopted 2023-2031 Housing Element:
Housing Element identifies sites and actions necessary to achieve State mandated housing goal of 669 units/year over 8 years (5,352 total).
Housing Element identified need to evaluate and update the 2004 Inclusionary Housing Ordinance (Program 7).
Alameda only issued 447 residential unit building permits in the first 2.5 years of this 8-year cycle.
Far short of Housing Element goal. Important to identify and remove unnecessary constraints to kickstart housing production. 3 Process To Date
Staff and Planning Board initiated work on the Ordinance Update in 2024.
Spring 2025 working group
November 2025 Planning Board Study Session
December 2026 Council Study Session
On April 9, 2026, the Planning Board held final public hearing and recommended:
Approval of amendments with some modifications to add specificity, clarify process for approved projects Continued work on in-Lieu fee provisions for City Council consideration within next 12 months 4 Rental Housing Project Requirements
5 Current Requirement
15% all projects over 4 units
4% very low
4% low
7% moderate
Current Conditions:
Moderate rate rental are remaining vacant in the Alameda rental market as rents are similar to market Recommended Amendment
Focus on Low and Very Low
Provide Options
Option 1: 15% low income
Option 2: 5% very low+ 5% low
Option 3: 8% very low
Option 4: An economically equivalent option
All options are of equal cost/value
Owner Housing Project Requirements
6 Current Requirement
Recommended Amendment
15% all projects over 4 units
4% very low
4% low
7% moderate
Current Conditions:
Greatest need for ownership housing is in the moderate- and low- income categories.
Focus on Moderate and Low
Provide Options
Option #1: 15% moderate
Option #2: 6% low and 6% moderate
Option #3: 10% low
Option #4: An equivalent
All options are of equal cost/value
Additional Proposed Amendments
7 Term: Extend Term for affordable units from 59 to 99 years Clustered: Codify and clarify current process and standards for "clustered" development (all affordable in a single building) Revised Programs: Establish standards for applications to revise previously approved projects Entitled but not yet constructed may apply to revise.
Only constructed rental projects with vacant moderate units may apply to revise.
Proposed Exemptions
8 Current Exemption: Projects with 4 or fewer units
Planning Board Recommendation: Projects with 11 or fewer units Very few new projects in Alameda between 5 and 11 units.
Staff did not include the change in the draft ordinance.
City Council may make change as part of first reading.
In-Lieu Fee
9 Staff recommend pursuing in-lieu fee study in next 12 months, consistent with Planning Board:
Currently only for project 5-9 units.
Best Practice is to allow an in-lieu fee for larger projects.
Creates a locally-run funding source to leverage other subsidies for affordable housing.
Goal is to create more affordable housing citywide than can be done through privately produced “on-site” affordable housing in market rate projects, and makes affordable projects more competitive for grants and loans.
Facilitates market rate housing by allowing project to cover entire cost of requirement in single up-front cost – as opposed to a long-term cost which reduces the internal rate of return to the project over the long term.
City can create strategic criteria to allocate funds in a way that supports City goals (e.g. prioritize projects in certain parts of the City; allow funds to be used for land acquisition)
Conclusion and Recommendation
10 Amendments tailor inclusionary requirements to current conditions and needs, reflect current best practices, and align with MTC Transit-Oriented Communities guidelines.
Amendments will have immediate benefits to facilitate at least one major stalled housing project at Alameda Marina with 359 rental units, waterfront park improvements, and Tidelands environmental remediation.
City should revisit this ordinance more frequently to respond to changing market conditions.
Staff recommends:
Approval of the First Reading; and
Direction to continue work to evaluate the In-Lieu Fee provisions of the ordinance in next 12 months, for the purpose of increasing and facilitating affordable housing production in Alameda.
Modification to increase exemption to 11 or fewer units for consistency with Planning Board recommendation is acceptable to staff.