Item No. 3
Town of Atherton
CITY COUNCIL STAFF REPORT – CONSENT AGENDA
TO: HONORABLE MAYOR AND CITY COUNCIL
GEORGE RODERICKS, CITY MANAGER
FROM: BRITTANY BENDIX, TOWN PLANNER
DATE: FEBRUARY 18, 2026
SUBJECT: SECOND READING AND ADOPTION OF AN ORDINANCE TO ADD CHAPTER 17.57, RELATING TO INCLUSIONARY HOUSING, TO THE ATHERTON MUNICIPAL CODE.
RECOMMENDATION:
Staff recommends that the City Council adopt the attached ordinance and add Chapter 17.57 “Inclusionary Housing” to the Atherton Municipal Code with the purpose of implementing the goals and programs in the certified Atherton 2023-2031 Housing Element.
BACKGROUND
Since January 2025 the Town has held numerous public study sessions and hearings to discuss and consider recommendations for the Town’s inclusionary housing program and to provide feedback to staff. An Inclusionary Housing Ordinance (IHO) is a policy tool that the Town included in the 2023-2031 Housing Element update to ensure that new multifamily development will contribute to meeting state-mandated affordable housing requirements.
The City Council introduced and commented on the proposed ordinance at its meeting on January 21, 2026. During discussion, the Councilmembers considered the ordinance with specific attention given to its application to the Town’s multifamily zoning overlays and sites eligible for multifamily development under state laws such as SB 79 and SB 1123. The Council also considered how the proposed inclusionary housing program would interface with the state’s Density Bonus Law. Following the discussion, the Council voted unanimously to introduce the ordinance for 1st Reading with direction to staff to revise the inclusionary requirements as follows:
▪ Reduce the RM-10 inclusionary requirement from 20 percent to 14 percent. This reduction corresponds directly to the number of concessions or waivers that a project would automatically receive if the proposal also meets the eligibility requirements for the state’s density bonus program.
Inclusionary Housing Ordinance – 2nd Reading
February 18, 2026
▪ Set an in-lieu fee structure of $150 per square foot of net residential development for rental developments and $200 per square foot of net residential development for ownership developments.
ANALYSIS
Staff has included a revised ordinance at Attachment 1 that reflects a reduction in the inclusionary housing requirement for RM-10 properties from 20 percent to 14 percent (Section 17.57.040.A).
Additionally, the language in Section 17.57.050 relating to the fee methodology has changed to identify the “point of indifference” calculation method as the upper limit used to set fees. Using this methodology as the upper limit will facilitate the Council’s preference to adopt the in-lieu fee structure of $150 per square foot of net residential development for rental developments and $200 per square foot of net residential development for ownership developments. The alternative methodologies provided by the BAE analysis generated fees that are below Council’s direction.
The actual setting of the fee requires adoption of a resolution that will be publicly noticed for a future hearing.
FINDINGS:
Chapter 17.18 of the AMC sets the process for zoning code amendments whereby the Planning Commission adopts a resolution with recommendations to the City Council. The Council will then approve, conditionally approve, or deny the zoning amendments. To approve the amendments the Council must find that the changes are consistent with the Town’s General Plan goals, policies, and implementation programs, as identified below:
Housing Element Goal 3.730 Facilitate the development of faculty and student housing on school campuses to meet a portion of the moderate and very low-income housing need identified for Atherton.
Housing Element Goal 3.760 Encourage special consideration to the maintenance and expansion of housing opportunities for handicapped and
low- and moderate-income homeless persons.
Housing Element Objective 3.761 B. Support the conservation and development of affordable housing for citizens of modest means.
Housing Element Policy 3.795 B. The Town shall continue to encourage the production and availability of more affordable housing through the development of new accessory dwelling units, and
private and public-school faculty and student housing.
Housing Element Goal 3.770 Meet the needs of seniors, in light of the pending growth of this population in San Mateo County
Housing Element Policy 3.772 B. Support the conservation and development of affordable housing for seniors with lower incomes.
Inclusionary Housing Ordinance – 2nd Reading
February 18, 2026
Program 3.814 Adoption of an
Inclusionary Zoning Ordinance
Adopt a new inclusionary ordinance for multifamily
development and a housing fee for all new single-family housing construction and addition. Generate funds to
support an affordable ADU rental program (Program
3.812(B) and other affordable housing opportunities.
FISCAL IMPACT:
The cost associated with the preparation of the draft Ordinance amendments are included within the annual Planning Department budget. The cost to implement the Ordinance will be paid for by the applicants of related development projects.
ENVIRONMENTAL IMPACT:
The project is Categorically Exemption per Section 15305 of the CEQA Guidelines. Section 15305 relates to Minor Alterations in Land Use Limitations, as the ordinance amendments would not result in any changes to land use or density.
PUBLIC NOTICE:
Public notification was achieved by posting the agenda, with this agenda item being listed, at least 72 hours prior to the meeting in print and electronically. Legal advertisement of this hearing was published in The Almanac newspaper. Notice of this hearing was also mailed to all property owners within the Town. Information about the project is also disseminated via the Town’s electronic News Flash and Atherton Online. There are approximately 1,200 subscribers to the Town’s electronic News Flash publications. Subscribers include residents as well as stakeholders – to include, but be not limited to, media outlets, school districts, Menlo Park Fire District, service provides (water, power, and sewer), and regional elected officials.
FORMAL MOTION:
I move that the City Council introduce and conduct the first reading of an ordinance to add Chapter
17.57 “Inclusionary Housing” to the Atherton Municipal Code based on reasons outlined in the Staff Report.
/s/Brittany Bendix
Brittany Bendix, Town Planner
Attachments:
1. Draft City Council Ordinance