CITY OF PACIFICA
CITY COUNCIL MINUTES
Council Chambers
2212 Beach Blvd
Pacifica, CA 94044
Mayor Sue Beckmeyer
Vice Mayor Christine Boles
Councilmember Mary Bier
Councilmember Mayra Espinosa
Councilmember Greg Wright
City Council Joint Study Session 1 October 06, 2025
JOINT STUDY SESSION
CITY COUNCIL & PLANNING COMMISSION
October 06, 2025 (MONDAY)
www.cityofpacifica.org
Mayor Sue Beckmeyer called the meeting to order on October 6, 2025 at 6:04 PM 6:00 PM - JOINT STUDY SESSION OF CITY COUNCIL AND PLANNING COMMISSION Call to Order
Mayor Beckmeyer called the Joint Study Session to order at 6:04 p.m.
City Clerk Coffey took a verbal roll call for both City Council and Planning Commission.
Attendee Name Title Status Arrived
Sue Beckmeyer Mayor Present
Christine Boles Vice Mayor Present
Mary Bier Councilmember Present
Mayra Espinosa Councilmember Present
Greg Wright Councilmember Present
Planning Commissioners Present: Samantha Hauser, Chair; Lauren Berman, Vice Chair; Marj Davis; Daniella Devine; Alex Ferguson; James Godwin; Chris Redfield.
Staff Present: Kevin Woodhouse, City Manager; Karen Murphy, Asst. City Attorney; Samantha Updegrave, Community Development Director; Katelyn Snodgrass, Assoc. Planner; Gabrielle DeLavallade, Asst. Planner; Sarah Coffey, City Clerk.
CONSIDERATION
1. Joint presentation by the HEART of San Mateo and Community Development staff to provide an overview of current State and Federal laws that apply to housing development projects, basics of affordable housing and financing, and discussion of Pacifica’s Inclusionary Housing Ordinance and Density Bonus Ordinance.
PROPOSED ACTION: Receive presentation and, in consideration of 2023-2031 Housing Element, provide direction on updates to the Inclusionary Housing Ordinance and Density Bonus Program Ordinance, as well as feedback for further research and analysis. (CEQA Status: Exempt from the California Environmental Quality Act (CEQA) City Council Joint Study Session 2 October 06, 2025
pursuant to § 15378 of the CEQA Guidelines because the discussion is not a “project,” as defined, because it has no potential for resulting in either a direct physical change in the environment, or a reasonably foreseeable indirect physical change in the environment.)
Mayor Beckmeyer stated that the Planning Commission meeting scheduled to start at 7:00 p.m. has been cancelled. She then led pledge of allegiance.
Community Development Director Updegrave and HEART representatives Tim Davis and Alex Waggoner presented the staff report.
Chair Hauser referred to the rental proposal of removing the moderate and lowering the AMIs (Area Median Income) and stated she was under the impression that there is new money for 100% AMIs. She asked if that was something that was factored in.
HEART Representative Davis thought having 100% was a great thing but was not familiar with new money for them. We are proposing units of 50, 80 and 110, which comes out to an average 80% of AMIs, which is what the Metropolitan Transportation Commission (MTC) Transit-Oriented Communities (TOC) Policy is proposing for cities. He stated, if maneuvering around that 80%, we could be doing 60, 80 or 100 and he thinks HEART would be supportive of that solution.
Chair Hauser thought she saw two different things on in perpetuity: in perpetuity for rentals and 45 years for sale and the other seemed to say that the recommendation was also in perpetuity.
HEART Representative Davis responded affirmatively.
Chair Hauser asked, on the in-lieu fee, if they had calculated what was proposed from the upgrade as to how a developer would look at it. She asked if the idea is that we want the in-lieu fee or we want the units or some combination.
Community Development Director Updegrave thought it was not necessarily about which is preferred but about providing clear direction in terms of whichever path the developer is proposing. If a project utilizes the density bonus, they are required to construct those units on the site through the density bonus law. You might see a development that provides 10% affordable units but then wants to fee out for the remainder and it allows more flexibility and more clarity in terms of the fee.
Chair Hauser thought the median price for Pacifica homes is $1.25 million and selling it at an affordable sales price of $500,000 means that is a $750,000 fee to the developer; only charging them the $500,000 per unit means we will not get on-site affordable but everyone will fee out.
She thinks the question is what do we want or to make the math equal.
Councilmember Wright stated his preference was to consider property tax in that equation as the in-lieu fee does not help us in that regard and building on-site is more beneficial to the municipality.
Mayor Beckmeyer stated that we will discuss that when we are through with all questions.
HEART Representative Davis responded that we are in an interesting situation where the grand nexus study would give more information about what the fee should be and give the opportunity City Council Joint Study Session 3 October 06, 2025
to say whether we want it more or less depending on what we want to incentivize. Also, we are updating it now based on inflation factors and our ordinance would still give the power to say whether we would allow it to be an in-lieu fee. Thus, it is not an automatic right.
Chair Hauser assumed it would have to go to City Council.
HEART Representative Davis responded affirmatively.
Chair Hauser received clarification on a quote he said about requiring an affordable housing partner and she thinks that was associated with the commercial density bonus. She also saw in our code that we have very low required but our current ordinance has a redevelopment area and a non-redevelopment area, and she asked what is the redevelopment area.
Asst. City Attorney Murphy stated that was back from the days of redevelopment and she was hearing it is the Rockaway area and we would remove the redevelopment area.
HEART Representative Davis stated the Community Planning Collaborative (CPC), an organization which created the 21 Elements program, which is for San Mateo County’s 20 jurisdictions plus the County, is a coordination effort between all the jurisdictions. Not all jurisdictions participate in every effort they are having. The last time there was an update for many of the cities in the County was also organized by CPC under the 21 Elements banner. It is a way to spread the cost as it can be very expensive to get these studies done. Under the banner of this one, there are about 15 communities that are all in it together and they are looking at different parts of it, some looking for just the inclusionary housing feasibility study which is what Pacifica is doing and some are also looking for commercial linkage study and nexus study, which is why it is called grand nexus. The inclusionary housing feasibility study is being front loaded into the process and the commercial linkage will come second. They are signing the contract now with Strategic Economics to do the study.
Community Development Director Updegrave stated, because that study is happening, it is going to take some time. With certification of our Housing Element and adoption of our Rezoning Program, we anticipate getting more applications in, hopefully before the end of 2026.
The changes we are looking at now, particularly with the in-lieu fees, are more minor adjustments accounting for inflation that should have occurred annually from 2027. She thinks, if we were to bring it before Council today, these are the numbers we would be proposing. With that deeper dive and study, what are the substantive changes and are there changes we want to make and move to a different kind of fee, to a different baseline, how do we want to adjust this annually, etc. She thinks we need that data from the residential feasibility study we are a part of to make those big changes.
Vice Chair Berman asked what cities were involved in that collaborative study.
HEART Representative Davis stated he would need to check.
Vice Chair Berman stated she thinks it is relevant.
Vice Mayor Boles stated, on the inclusionary ordinance, we mentioned ownership with a half at 80% and half at 120%, and the recommendation was to keep that. She asked why not lower, as our nation’s history of redlining has put disadvantaged communities even further behind. She asked if there were any exceptions to that which we could make to help those catch up, even if below those numbers.
City Council Joint Study Session 4 October 06, 2025
HEART Representative Davis thought we were trying to make as few changes as necessary.
What we have currently is in align with the Metropolitan Transit Commission TOC policy and we are aligning it with that which a lot of other cities are doing. He would be happy to have a conversation more about whether we want to make those units at a lower income. He stated that he traditionally worked in a city where they did 80% and 100% of AMI units and found that to be very effective in meeting the needs.
Community Development Director Updegrave understands that for ownership units, when you start dropping below 80%, it gets more difficult to find income-qualified.
HEART Representative Davis agreed, adding that once we get down to 50% of AMI, they are spending all their money just on the maintenance of the unit or the HOA fees and they do not have much money for the mortgage. He stated that California law does not have a provision where the HOA fees are based on the income of the owner. Thus, we are looking at a place that has HOA fees for $1.3 million townhouses and the 50% owner is going to pay the same HOA fee, as California does not permit you to reset the HOA fees by income. He stated some other states allow that and the BMR units have lower fees than the other units.
Vice Mayor Boles stated we mentioned in-lieu fees and all the affordability aspects of a project need to be presented and approved early in a project/application review with a total amount approval. She asked what happens if the developer changes their mind. She wanted to make sure what is allowed and we have controls for that if the developer wants to change after they went through the public process and gotten approvals.
HEART Representative Davis stated, returning to a previous question, he shared a list of cities participating in the grand nexus study: Belmont, Brisbane, Daly City, East Palo Alto, Half Moon Bay, Menlo Park, Pacifica, Redwood City, San Bruno, City of San Mateo, and County of San Mateo (12 jurisdictions).
Community Development Director Updegrave returned to Vice Mayor Boles’ question, i.e., if a developer changes their mind, they go through their entitlement as if they are doing on-site and then they want to switch at some point to the in-lieu fee. She stated that we had that come up recently and staff and HEART, on behalf of staff, worked with the developer to come up with a fee that would have then been brought to Council. In the current iteration and future ordinance, in-lieu fees would come before Council. She stated that, along with that, Vice Mayor Boles was asking about the requirements of the map.
Vice Mayor Boles thought all of these agreements would come fairly early in the planning process. She stated that the developer knows what they are buying into so they have several meetings and that would be one of the early things discussed and agreed upon.
HEART Representative Waggoner responded affirmatively.
Vice Mayor Boles assumed there is no path for in-lieu fees to be taken in an underhanded way.
HEART Representative Davis stated it would be a completely transparent process with the inclusion of the Council.
City Council Joint Study Session 5 October 06, 2025
Community Development Director Updegrave stated, if they were to go through all their entitlements and then change their mind, they have to come back through Planning Commission and also through Council. There is not an incentive to change their mind at the last minute, as it would add time and process.
Vice Mayor Boles asked, broadly for projects that involved residential, when are density bonus laws applicable and when can a developer invoke a certain amount of affordable units.
HEART Representative Waggoner stated that the developer would have to opt in to using density bonus by providing those units at affordability as outlined on a state density bonus chart; if you provide 10% of your units as affordable at 80% of area medium income, that qualifies you for a 15% density bonus or for a number of waivers, which all depends on the percentage of units provided as affordability and the level of affordability provided.
Vice Mayor Boles stated even a small project that has one affordable unit could potentially use the density bonus if they meet the AMI requirements.
Community Development Director Updegrave stated, in order to qualify, it has to be a housing development project and needs to be two or more units. They would have to look at the table to see what kind of bonus, but a smaller project could use a density bonus. She has not seen that, but it does not mean it is not coming or that it will not happen. She thinks the requirements to build on site units can be cost-prohibitive and you tend to see it in mid-to-large projects but it does not mean it cannot happen.
Chair Hauser stated, to add to what Vice Mayor Boles was asking, what triggers the density bonus law is five units very low, 10% low for rental, 10% moderate for sale. She stated that there is also different housing that trigger different things and they trigger the amount of density bonus but unlimited waivers and incentives are triggered by any one of those percentages.
Asst. City Attorney Murphy added in general it is a low percentage that triggers the density bonus.
Vice Mayor Boles stated that, for projects in the queue now or someone who might submit one tomorrow, since we cannot enforce our density bonus law, we are following State standards in what we are allowing in review.
Asst. City Attorney Murphy responded affirmatively.
Vice Chair Berman asked, regarding the density bonus minimum requirement and understanding the State requirement, if it is in the City’s purview to have a new minimum number of units for that requirement such as, instead of five very low income, could we make that eight very low as our minimum, going above and beyond the State requirement.
Asst. City Attorney Murphy stated that the City can add an additional local density bonus. If you go above and beyond the State density bonus, there are certain incentives or increased density bonuses that the City can grant. That is something the City can consider, but we cannot have a lower requirement than state law.
Vice Chair Berman asked, for our City’s in-lieu fee payment, what is the smallest level of development where that applies.
City Council Joint Study Session 6 October 06, 2025
Community Development Director Updegrave stated it is eight units.
Vice Chair Berman assumed it does not apply to a single-family home building two new ADUs.
Community Development Director Updegrave responded affirmatively.
Vice Chair Berman referred to the tentative map requirement being recommended and asked about the word “optional” being there.
HEART Representative Waggoner stated the ones labeled optional go above and beyond what is in the State density bonus law so we would not have to include those but they are best practices.
Community Development Director Updegrave added clarification that they are options presented to Council for consideration but those would be things that would be incorporated into the ordinance and would be required. She stated here are some options of things we can do, changes we can make, things we can include, but it does not mean it is a “choose your own adventure” for a developer reading our Code.
Vice Chair Berman stated everything here is an option for us to look into so that word “optional” is above and beyond.
HEART Representative Waggoner responded affirmatively, adding that they are based on what are considered best practices that some jurisdictions have put into place because of issues they have encountered or things they found are helpful but not required under State law.
Vice Chair Berman stated that we already have a tentative map process that is required, and she asked what is the aspect that is going above and beyond again.
HEART Representative Waggoner stated that this is for the density bonus ordinance specifically and for density bonus projects that would be required to submit a tentative map at the time of their density bonus application.
Vice Chair Berman thought any housing development goes through our typical tentative map process.
Community Development Director Updegrave stated it is typical for developments to come in with all of their required entitlements and we process those as a consolidated application. She thinks one of the things we do not do well in our Code generally is outline application requirements; part of looking at the inclusionary and density bonus is to outline some of those parameters that staff and applicants can use. She does not know if this will make any change to our current process.
Vice Chair Berman asked this is more wanting to make this requirement explicit.
HEART Representative Waggoner agreed and added so they designate which units are going to be the density bonus affordable units. We have a map of what the building is going to look like and which of those units are going to be deed-restricted as affordable.
Vice Chair Berman stated that is not currently explicitly required in our Code.
City Council Joint Study Session 7 October 06, 2025
HEART Representative Waggoner agreed, adding that is to look at comparability requirements such as a developer is doing three affordable units and they cannot put them all on the first floor.
Vice Chair Berman added that they cannot have a note on the tentative map saying that eight of these units will be affordable.
HEART Representative Waggoner agreed, adding that we can look at the square footage and say that all of the affordable units they are giving are the smallest ones.
Councilmember Wright referred to timelines for permits, and he asked for rough expectations of what a developer might expect for a length of time since a lot of the expense in doing a development is tied up in carrying costs.
Community Development Director Updegrave stated that it was a challenging question to answer as we have no control over how long an application spends in an applicant’s court. We have some projects that have been inactive for years.
Councilmember Wright asked her to limit her response to staff time.
Community Development Director Updegrave stated that the Permit Streamlining Act requires them to review and provide written comments within 30 days of the submittal. When they submit their initial application and when we are processing it for review, there are various timelines, especially with new State laws that have passed which require action within a certain number of days based on CEQA. She stated that, depending on the size and complexity of the project, it is one to three years. She stated that, the more we can clarify and simplify, the hope is some of that time also comes down and is one of the overall goals in modernizing.
Councilmember Wright asked, if our goal is to build more affordable units, what of these different menu options that were being presented in the past has yielded more affordable units, going by the theory of past performances indicative of future results.
Vice Mayor Boles stated that they probably need to look at other cities and not Pacifica.
HEART Representative Davis stated it is very much about the feasibility numbers and you can ask for more units and 120% of AMI, than you can at 80% of AMI because the cost subsidy for years is smaller but then you are getting units that are not as useful for your community. It is a policy question. He thinks the important thing, in terms of are you getting the value for the community, is whether or not you are setting your policy so that developers are still building and still giving you units. That is what the feasibility study is going to do, i.e., tell us where are we today in terms of construction costs and CAP rates and interest rates and other things that developers are looking at and what can you provide so that projects are both feasible and still provide affordability. His experience is that cities around 15% are usually in a pretty safe area in terms of being able to get units produced. Cities doing 20% or 25% are the ones reexamining policies and saying maybe they should pull them back.
Councilmember Wright asks what gets more affordable housing built if we let people pay into a fund or if we make them build it on-site.
HEART Representative Davis stated he has looked at this question a lot over the years. He used to work in a large city where they had an active pipeline of 100% affordable housing City Council Joint Study Session 8 October 06, 2025
projects and their housing director would just as soon take the money as they felt they could get these projects moving but they also had a political situation where community groups, fair housing groups, wanted to see the units in the buildings to make sure they were spread across the city, being built in the same neighborhoods that were growing. That is a situation where you have a strong network of organizations that are building these properties. In smaller cities, if you get $1 million into your affordable housing fund, it may be a very long time before you are able to turn around and give that to 100% affordable housing project. There may not be many sites for it, organizations on the ground able to spend it. Thus, in smaller communities, he advocates for doing the mostly on-site as they are getting built at the same time that the projects are being built.
HEART Representative Waggoner added often developers are not a monolith and what they want is going to depend on their financial circumstances and what we want to amend with these policies to allow for some of those alternatives. For one developer, it might work best for them to do land dedication because they have a site they acquired previously that they cannot develop or for a different developer it might make more sense to build those units on-site or pay out an in-lieu fee. What they are going to care the most about is having those clearly outlined policies and procedures that are in line with some State laws because that gives them certainty.
Councilmember Wright asked which way do cities benefit from the repeated property tax revenue more, with people paying into the in-lieu fee and then having non-profit developers come in and build or having them build on-site.
HEART Representative Davis stated, if he interprets his question correctly, he is asking about the impact on property taxes.
Councilmember Wright responded affirmatively.
HEART Representative Davis stated units on-site are still paying property taxes and 100% affordable buildings built by non-profits can get the welfare exemption and not be paying property taxes. In that respect, the City is getting more benefit by the on-site units.
Mayor Beckmeyer wanted to go back to his recommendation that we align with the MTC TOC guidelines. She wants to go through it so she has a better understanding of what that is.
HEART Representative Davis stated that the Metropolitan Transportation Commission (MTC) has a Transit-Oriented Communities (TOC) Policy that they are implementing in cities around the bay that have immediate access to high impact transit sources. He stated that Pacifica does not as it is not on BART, Caltrain, or ferry services. The TOC policy anticipates that cities have to get certain amount of points to get preference for certain transit funds. The point system is based on a number of policy areas, i.e., parking requirements near the transit, density around the transit location, and meeting housing policy goals. They are based on production, preservation and protection, as well as commercial. For each of those areas, there is a menu of options where you get points based on meeting at least two of those options. The inclusion housing ordinance is one of the options for production and they have given guidelines if you meet or exceed these requirements in your inclusion housing ordinance, you get the points. San Bruno’s rental affordability is a little bit higher, meaning not as deep affordability as required, and they are working with them to make a minor adjustment to bring them to that deeper affordability required by the policy. In preservation, it could be funding towards preserving existing housing and making income restrictive. Protection policies are very much about tenant rights policies, such as anti-tenant harassment ordinance, no net loss when there is City Council Joint Study Session 9 October 06, 2025
development of a building, etc. Because they work with other cities that are transit-oriented communities, they are also very familiar with what those policies are. As they are working with the Planning Commission and Council on what we may want to do to strengthen our protection, preservation, and production policies regardless of being a TOC community or not, they can help advise on that.
Mayor Beckmeyer stated that looking at those options would be something they would be bringing forward to Planning Commission and Council after the grand nexus study is completed or during the interim phase between now and when it is completed.
HEART Representative Davis stated, because we are not a TOC policy community, we are not on a timeline and they are at the City’s direction. If we are interested in looking at those policies, they can tell us what are the best practices that other communities are doing and, if we want to align with them, there are model ordinances being produced by the Association of Bay Area Governments so multiple cities are adopting basically similar ordinances.
Mayor Beckmeyer referred to the lack of transit-oriented communities in the City and she starts to worry that there are expectations that will impact parking, etc.
HEART Representative Davis stated that they are not looking to Pacifica to get the points and not requiring us to meet this policy in any way.
HEART Representative Waggoner added that part of the reason they look at MTC as the baseline of what they are looking at is their expectations are not entirely based on fulfilling that, as they are also looking at regionally what our best practice is, especially for some of the items less related to that transit item, such as what has worked well for jurisdictions across the Bay Area, hence why they included some of the recommendations from the 21 Elements BMR working group as well as that is less of a transit-oriented group; that was looking at jurisdictions across San Mateo County and what are some of the standards and what are we hearing from developers across the county that works.
Mayor Beckmeyer referred to the grand nexus study cost and the amount paid per city.
Community Development Director Updegrave stated that it is based on what we are participating in and some jurisdictions pursuing additional studies would have a higher fee. She stated that there is some proportionality within that.
Mayor Beckmeyer stated that one thing that can be true is that we are not pursuing as many things but it is possible that we are further behind, as some of our things were updated in 1997; it may be a city that has more recently updated their ordinances does not need quite as much tinkering and Pacifica may need to reach further. She wanted to make sure the fee structure is in keeping with what we need to do in Pacifica.
Commissioner Ferguson asked in 2025 below market rate housing what the 80% and 20% AMI levels are, both in income level and what the subsidy is for that income level.
HEART Representative Waggoner stated that it is based on household size and it is not necessarily a subsidy but more like restriction on the amount of rent allowed to be charged.
Commissioner Ferguson asked, for 80%, what would be the ceiling. He assumed the answer is per the number of bedrooms.
City Council Joint Study Session 10 October 06, 2025
HEART Representative Davis stated, when looking at eligibility for a household, they are looking at the household size and what the maximum income can be and, for a family of three, the maximum income for an 80% unit would be $139,250. The maximum sale price for maximum rent would be based on the unit’s number of bedrooms and they use a formula to set the rent or sales price based on what would be affordable to them.
Commissioner Ferguson asked who sets those.
HEART Representative Davis stated the County has guidance in terms of setting the rents but it would also be part of your inclusionary housing ordinance to clarify what that process would be and that is one of the things that was also challenged with the current ordinance.
Commissioner Ferguson stated about a start level for all of these number of bedrooms for sale or rent in 2025 and they would be attached to the current price index and just scale naturally or do they get reviewed by a committee at some point.
HEART Representative Davis stated what works best is it is clearly defined in how you determine it in the ordinance and set for each property at the time that they are going to market and approved by the Community Development Director. The sales price is the most complicated because it uses a lot of different inputs, including what the current interest rate is, what the actual HOA dues is, etc. Thus, it is not going to be the same price for a year for all units created.
Commissioner Ferguson understood and, given a three-year window for development, he can see a real advantage to understanding what those numbers are upfront to the developer.
HEART Representative Davis understood. He states, for rents, the formula is fairly simple and the County publishes numbers. If you come in 2025 to get your entitlements for a project and do not actually open the doors until 2027, your risk is what is the change in the area’s median income, as that income is how they set the rents, not based on a number of other features such as interest rates, etc. For homeownership projects, they can run the numbers for today to say, if you were selling it today, this is what you would get, but you are still at risk for some changes, just as if you are selling other units because of interest rate environment.
Commissioner Ferguson asked, if you have a teacher tenant who qualifies for 80% or median income and then the area’s median income jumps way up but does not track with public service hours which happens all the time, would those people have their rent readjusted to the new area median income level or is it locked in for a period of time.
HEART Representative Davis stated this is where they have a provision in the legal agreements that there is not an increase over a certain percent, given the AMI increase. He has seen this where the AMI increased 16% in one year and they are not going to pass that along to the tenant. You then have a cap on what they can do within the rental restriction agreement, usually 5%.
Commissioner Ferguson assumed the goal is to include all of that language at some point. He stated that we talked about HOAs not being subsidized and understands why, but if you have a purchased below market rate unit, is the State property tax subsidized for those parcels.
City Council Joint Study Session 11 October 06, 2025
HEART Representative Davis stated their property tax is set based on what they paid, just as it is for market rate units.
Commissioner Ferguson stated same percentage but at a lower purchase price.
HEART Representative Davis agreed. He stated that they do pay a lower property tax than the next door unit that sold for $1.3 million.
Commissioner Ferguson assumed depending on when they bought it.
HEART Representative Davis agreed, and stated that they do benefit from a lower property tax but they do not benefit from any kind of lower HOA.
Commissioner Ferguson stated a market rate unit property tax is approximately $15,000 a year in Pacifica and it is an enormous hurdle.
HEART Representative Waggoner stated that is typically factored in when they do those calculations as you are not placing someone into excess burden based on their housing cost, which is typically about 30% of their income and that factors in to how you do the calculations.
Commissioner Ferguson concluded total housing cost.
HEART Representative Waggoner responded affirmatively.
Chair Hauser stated, for clarification, on rental you would not have HOA dues.
HEART Representative Waggoner agreed that is just ownership.
Chair Hauser stated, when you are calculating a sales price, you are taking the percentage of income that qualifies like 30 or 35 depending on income level. You are then netting out your monthly costs and you would include your HOA dues in it. Even though she would agree it is not subsidized, it is being considered if you are living in a $500 a month HOA or $200 a month HOA, she assumed your affordable sales price is adjusting based on that input.
HEART Representative Davis responded affirmatively. He added it does affect that, but when someone is paying everything towards HOA fees, there is not much money left for the mortgage.
HEART Representative Waggoner agreed, adding it factors in on the really low end such as looking at 30% or 50% AMI restriction, and maybe you are only paying $1100 or less for it but still $400 of that is your HOA fee and that is still $400 out of your pocket at the end of the day.
Chair Hauser asked, if you are in a very low category and being qualified at 50% AMI but your affordable sales price is based on 40% AMI, and you are netting out your HOA dues, your sales price is going to be lower and your payment should adjust down.
HEART Representative Davis responded affirmatively.
Councilmember Wright asked what they do in the case of a cash call on HOA fees, supposing you need to replace all the roofs, etc.
City Council Joint Study Session 12 October 06, 2025
HEART Representative Davis stated that they pay the share that they would have paid if they were a full market buyer in the building. He stated that this is a cause of concern as you have a very big risk for a very low-income household not having the cash on hand that an upper middle class household might have.
Councilmember Wright asked if there was funding available from the County to help people like that from the State.
HEART Representative Davis stated no, adding that his recommendation is that there should be such a fund available. He has seen cities that have had longer histories with BMR units and had to occasionally step in and help out with the condo association or a specific condo owner to keep them afloat, maybe using some of their home repair funds and letting it apply to their part of the common area costs.
Councilmember Espinosa referred to community benefits, and asked, if we are doing a high density project, can we request having open space, childcare or a park, depending on the density.
HEART Representative Waggoner stated part of density bonus does include having a childcare facility as part of it. While you cannot force a developer to do anything, you can definitely request it in negotiations and there is an incentive in density bonus to have a childcare facility.
There is not anything for open space. Part of the strength of inclusionary and below market rate units in those developments is that they are market rate developments that will have those market rate amenities such as open space, a gym, etc., and that is why they have the requirements that they have access to all those same things.
Councilmember Wright asked, in terms of the rentals, what are some of the potential unintended consequences, such as garbage rates or sewer rates getting higher than CPI.
HEART Representative Davis asked if he means in terms of the cost to the landlord of the project.
Councilmember Wright asked if there is any kind of adjustment built along the way or just set.
HEART Representative Davis stated that AMI has tended to increase in this region faster than some of those other costs and that usually does it. If they have a vacancy, they can rent it at their maximum AMI rent. He added that, if someone is out, they can move it back out to that format.
Councilmember Wright assumed that, in a hyper-inflation area environment, it is potential with a 5% cap that it could outpace over time.
HEART Representative Davis responded affirmatively.
HEART Representative Waggoner added there is potential to renegotiate with those legal agreements.
HEART Representative Davis agreed, stating that they can look at doing legal agreements that have some kind of provision if they are coming back to the City and say it is not working and they need to increase the rents. He stated that it is not the same as regular rent control but covered in the legal agreements.
City Council Joint Study Session 13 October 06, 2025
Councilmember Wright understood, especially in a high tariff environment, such as roofs could be more expensive. He asked when we are passing things like parcel taxes or sewer rate increases, if we should consider affordable units and a different rate for them.
HEART Representative Waggoner stated as part of the calculation for that the utility allowance is factored in and the way it works is that any utilities that the tenant or owner would pay for are factored into that to allow for them to pay their utilities without going into housing cost burden.
Community Development Director Updegrave stated that those are regulations that are outside of what we would have in the ordinance.
Councilmember Wright stated that the parcel tax is not.
Community Development Director Updegrave stated, in terms of things like sewer rates, etc., it is an issue that is adjacent but outside what the City is able to regulate in their Code.
Councilmember Wright stated he is looking at trying to keep an affordable unit affordable.
HEART Representative Davis stated, if he is talking about rental units, he wanted to restate what Representative Waggoner said, i.e., if sewer cost goes up on the tenant, they pay less rent.
Councilmember Wright asked what if they are an owner.
HEART Representative Davis said, for an owner, there is a risk.
Councilmember Wright stated that there was a chart about all the different rates that all the surrounding cities do, and he asked what the advantages or disadvantages are with some of those different strategies and what seems to get more housing built compared to what does not.
HEART Representative Davis asked if he wanted rental or home ownership.
Councilmember Wright stated both.
HEART Representative Davis stated they do not have a good census on what has been created in each city. He did not think that would be part of the grand nexus study but it is something that would be worthwhile looking at.
Commissioner Ferguson stated he was thinking about 120% area median income below market rate housing and he imagined most of the residents of Pacifica would qualify for that.
HEART Representative Waggoner stated 100% of AMI for a one-person household in San Mateo County is $130,600.
Commissioner Ferguson asked if City advertises that these programs exist. He stated it will be half of our BMR program and he guesses that two-thirds of Pacificans qualify for this. He asked if there is anything we do for outreach.
Mayor Beckmeyer rephrased his question, i.e., for cities that have built recently with these kind of features, what are the practices around informing the community and public of these options.
City Council Joint Study Session 14 October 06, 2025
HEART Representative Davis stated cities will put information on their website, regular newsletters and other outlets. A traditional form is using newspapers. He stated that one thing available to them that was not until recently is called Doorway, which is a new project under Bay Area Affordable Homeownership Alliance (BAAHA) which is part of Association of Bay Area Governments (ABAG) that provides a one-stop place for people looking for affordable housing anywhere in the region except San Francisco. He stated it is a one-stop online shop and is in multiple languages for individuals looking for housing anywhere in the Bay Area. All the counties except for San Francisco (which is using its own housing portal called Dahlia) provide a place where you can look, push a button, and say you are interested and think you qualify for this particular project and that lottery. It is also incumbent on both the developer and the City to say that they need to reach out to the community specifically.
Commissioner Ferguson stated that his concern is that it would make sense to give some early notice or advantage to people who live here and should qualify for these versus someone who has been shopping affordable housing.
Community Development Director Updegrave stated that will be part of the BMR manual to help outline what the preference points are with for sale units.
HEART Representative Davis stated that we already have a local preference within the ordinance. It is useful and is standard practice that a local preference is backed up by what they call a disparate impact analysis that makes it clear that, although doing local preference, you are not hurting the ability of people of certain races or backgrounds from being able to access those units. In a disparate impact analysis, you are looking at the local demographic compared to the County demographics and saying that they are fairly similar so it is okay to do a local preference or you can do a local preference but only to a certain percent of the units. He is leading getting a multi-jurisdictional district impact analysis done that would include Pacifica so you have this kind of legal grounding from a fair housing perspective to go ahead and continue to implement the policy.
Commissioner Ferguson was not suggesting giving an advantage for applicants, just give them an equal footing for applying in the first place.
HEART Representative Waggoner stated one thing they have required for some developments that they would want here is having an affordable housing marketing plan. That basically requires the developer to take a look at the local community, disadvantaged groups or folks who would not normally hear about something like this and then go out to community organizations that work with those folks or publications that are seen by people.
Commissioner Ferguson thinks, if they are talking about 20% above median income, not to have them think of themselves or want to be thought of as disadvantaged people. He stated that Pacifica is historically a blue collar town and our area of median income is skewed in a different direction and these people will not think about qualifying for affordable housing. He also does not know where the direction came from for 7.5% for 80% and 7.5% for 120% and asked why skip over the 100% AMI level.
HEART Representative Davis stated that they had units at 80% and 100% of AMI but only after moving to the Bay Area he sees that standard here is to do 80% and 120%. He thinks that is historic happenstance here and would love seeing 100% units.
City Council Joint Study Session 15 October 06, 2025
Community Development Director Updegrave stated it may be something that will come out of the residential feasibility study we are currently part of as 100% has not been in our framework.
HEART Representative Waggoner thinks another part of it factoring in is on the developers’ side and even some non-profit developers will be thinking about how much money they can make and is part of why 120% is popular.
Commissioner Ferguson stated it is attractive to the developer.
HEART Representative Waggoner agreed, adding that it helps them pencil the deal the better.
Commissioner Ferguson stated in theory market rate housing is better in general.
HEART Representative Waggoner stated that they have seen circumstances where 120% of AMI units are more expensive than market rate units on rentals.
Commissioner Davis stated that they talked about some requirements for the developer and one of them did say a marketing plan and she was curious how they are going to market the BMR.
She asked if they can have some specific requirements, such as six months before it is completed you have to put out some kind of announcement to the community, Bay Area at large, or whatever is decided, and she asked if we could add specificity and a timeline to that.
HEART Representative Davis agreed.
HEART Representative Waggoner stated that is part of why they are recommending many of these updates, i.e., both from a developer’s side of things it is better to have more certainty and things clearly outlined and there are a lot of benefits to the community and residents.
Commissioner Davis stated that, at 801 Fassler, there were two low and three moderate and she knows people who went to look at those units when they first opened up, not specifically low income, and the person showing the property did not even know they existed. She thought there may be an advantage to the developers selling the market rate ones first with a return on their investment. She thinks that should be considered as the marketing plan talks about having to build them all at the same time and know where they are going to be in the building, and she thinks we should make sure they are all marketed and listed at the same time as well.
Mayor Beckmeyer opened public comment.
Suzanne Moore, Pacifica, stated we should prioritize transitional housing until permanent housing is built, that public land should be earmarked for low-income housing, and our housing fund should have a continuous source of income.
Michael Wahlmann, Pacifica, referred to the scenario of a larger family with one income qualifying but not being able to get a mortgage or a dual income family not being able to hit 120%. He also shared concerns that building affordable housing would lower existing home values.
Michael Fernaza, Pacifica, asked what is the total height of the building able to be built in Pacifica and asked if it is true parking is not a requirement to satisfy people who would live in the new units that would be built.
City Council Joint Study Session 16 October 06, 2025
Mayor Beckmeyer closed public comment.
Chair Hauser asked if the state density bonus law has a maximum height and if there are ways to waive out of all parking.
Community Development Director Updegrave stated that the density bonus allows waivers for height to construct a project at the permitted density. There is not necessarily a maximum limit as there are a lot of controlling factors and the base density is the primary factor in terms of how much bonus they can build within the overall size of the building. In Pacifica, our heights range from 35 feet to 55 feet with rezoning and it would be possible to go above that with a density bonus. Another limiting factor is the type of development, i.e. staying under high rise construction. She thought it was 75 feet or 85 feet that kicks you into a different construction type.
Chair Hauser stated it is typically five stories. She thought, at a certain amount of building height, you are able to use frame construction and do not need smoke barriers and there are not a million means of egress that you need to meet and it is more economical to build at those lower heights; but, if you go to a tower, that is a much more difficult building topology to finance and build before you get your money back out of it. She thinks Director Updegrave is trying to say that people are disincentivized from building infinity high because it is infinity expensive.
Community Development Director Updegrave added that our current density and the amount of bonus that you can get would not necessarily support a tower type construction. In terms of parking and the ability to use incentives and waivers to reduce or eliminate parking, there are also different State laws that apply to parking depending on the target population. There may be different standards for supportive housing, transitional housing, homeless shelters, etc.
Mayor Beckmeyer presumes there are no standards for lack of public transit.
Community Development Director Updegrave responded affirmatively.
Chair Hauser thought you cannot totally waive out of requiring parking. The State density bonus law has parking standards that, in some instances, are higher; as you get to three and four bedrooms they are more onerous than what we provide in our Municipal Code but we are smaller bedrooms that count for less. She thought we tried to be consistent with the Housing Element and the Rezoning.
Community Development Director Updegrave stated, with any development project, we have to look at the specifics of the cases in front of them and what laws apply.
Commissioner Redfield stated, with that parking issue that came up, given the transit corridor items, he asked if there were any State laws that allow for more parking in Pacifica specifically because we are a commuter city as we do not have access to public transportation. He asked if there are any differences in that in State law, i.e. are we allowed more parking.
Community Development Director Updegrave stated she cannot speak to every State law but there are State laws passed in recent years that basically eliminated all parking requirements within a certain proximity to high quality, high frequency transit. Those exceptions do not apply within Pacifica because we do not have those facilities such as BART and buses, but in terms of State law that says we can require more, she does not believe that exists. She stated that there City Council Joint Study Session 17 October 06, 2025
are a number of different rules impacting parking and we have parking requirements that are coastal zone in order to preserve coastal access and it is a complex question.
Chair Hauser felt that we want units and not fees and what a lot of cities do is say you cannot fee out of affordable housing unless it is a creative solution posed to Council. If that was the case and we adopted this similar ideology that a lot of other cities have done, would we need the nexus study to set the fee or could the City do non-nexus study based fees that were more responsive to whatever the current environment was for construction costs and housing prices.
Asst. City Attorney Murphy asked if her question is whether someone wants to fee out rather than adopting a standard in-lieu fee and they would come with a proposal.
Chair Hauser thought fractional fees for units, which we do not currently have, are great. If someone owns 12.3 units, they pay the fee for the 0.3 but they cannot pay 12.3 units worth of fees, which is what a nexus study would back up. Instead, if Council wanted to see inclusionary housing from in-lieu housing money, could they entertain an application where the value of that fee was not contingent on the nexus study.
Asst. City Attorney Murphy stated, with in-lieu fees, you technically do not need the type of nexus study you need for other fees. She thinks you do want some sort of standard so you are treating developers the same across the board. She was not sure if there is a way we could have one without an exact number but some sort of standard, as that could be more difficult to do but the City could say that an in-lieu fee is not allowed after certain circumstances.
Chair Hauser added unless Council approves that.
Asst. City Attorney Murphy agreed, except for fractional in-lieu fees.
Vice Chair Berman asked what the City’s current bucket of affordable money that was contributed by in-lieu fees pay for, as she thought it was not just the City building affordable housing units but other factors that fee contributes to.
Community Development Director Updegrave agreed, adding that there are limits on what an inlieu fee can be used for.
Asst. City Attorney Murphy stated the current inclusionary ordinance says, “It shall be used for the purpose of providing funding assistance for the provision of affordable housing and reasonable administrative costs, including but not limited to a buyer’s assistance program for eligible households.” It can be used for providing housing and administrative costs, and administrative costs would have to be a reasonable fee and some ordinances have a cap on that.
Community Development Director Updegrave stated for administrative costs for administering BMR below market rate.
Vice Chair Berman asked if for City-managed BMR.
HEART Representative Davis stated the cost of running the program. It could be the grand nexus study is a fee that you have to pay to keep the program running every few years. It could be from monitoring the units you do have. You would not have direct management, but you need staff people that are making sure that the developer is doing the income certifications City Council Joint Study Session 18 October 06, 2025
correctly and documentations are being turned in annually. He has also seen where there is a cost of the city to work to spend the money with an affordable housing developer. The cost of creating legal agreements are all fees that are part of the administration.
Vice Chair Berman assumes all that centers around City-led affordable housing development.
In the scenario a development cannot pay an in-lieu fee and had to build a unit unless you have a unique case, she wants to make sure, if we are depleting the bucket of money the City currently has for affordable housing, what that bucket of money serves. If there are other services that are not directly related to the City developing affordable housing, we want to be cognizant of what funding might get impacted.
Community Development Director Updegrave stated that it would potentially be things like the hard cost of the mortgage and construction, as well as the soft cost where a local agency might provide some additional funding toward the construction, acquisition of land, etc., but not necessarily that the City has $22 million and is going out and building an affordable housing project. It would just be part of financing for an affordable housing developer.
Mayor Beckmeyer thought one of the figures in the chart showed the $22 million project and $1 million would be the City’s part.
HEART Representative Davis agreed, stating that the primary use of in-lieu fees is to help fund 100% of affordable housing projects. Cities are helping to leverage the tax credit funds and other funds to make it work. He stated it is very common to have the federal tax credits, State tax credits, and County soft debt and local soft debt all in the same project.
Community Development Director Updegrave stated there are a lot of funding streams.
Mayor Beckmeyer stated that the subtext of what she is hearing is to make sure we do not spend it all on legal fees, studies, etc., and when the opportunity comes along to give our $1 million to the project, we don’t have $1 million anymore. She asked if there would be a way, in terms of annual reporting, policy manuals, etc. to put a check on that.
Community Development Director Updegrave stated that money would have to be earmarked or in a subaccount to be used for those specific purposes and it would not be used for Housing Element implementation. The in-lieu fee needs to be very directly tied to the creation, preservation, and rehabilitation of affordable housing.
Vice Chair Berman added not necessarily City-led.
Community Development Director Updegrave agreed, stating that we are not a big enough city to develop our own affordable project.
HEART Representative Davis thought it would be helpful to provide an example from East Palo Alto which is supporting a number of housing initiatives. They are using in-lieu fees to support 100% affordable projects, but they also have program to assist with legal assistance, foreclosure prevention, rental assistance, etc. and they are using a fee on rental receipts from private landlords and a portion of their transient occupancy taxes to pay for those programs.
They are not using any of their operating money but some cities may dedicate a bit of their operating funds to that as it is an important program for them to make those commitments.
City Council Joint Study Session 19 October 06, 2025
Vice Chair Berman stated that example is helpful. From her standpoint, she agrees with Chair Hauser said that we want to see more units built here but, as the same time, we also need to be considerate of needing that bucket of money to also support units being built here.
HEART Representative Waggoner added that one thing they have seen is that folks need 15% if you are building the units but a higher requirement for an alternate compliance option such as 25% if you’re doing in-lieu payout. If you are going to do the in-lieu payout, you have to pay more, and that allows for the opportunity for there to be an alternative compliance hearing where, to some degree, you can negotiate with a developer, such as you build 10% on-site and then you do a 10% in-lieu fee so you are kind of getting both.
Vice Mayor Boles thanked Vice Chair Berman for bringing that up which she thinks is a critical piece of defining our in-lieu fees but also our Housing Action Funds. She dug into the in-lieu fees that were collected for the Harmony One project and originally there were two units and one vacant piece of land to build affordable housing and, somehow, all that went away for an inlieu fee of less than $400,000 and all this time that money has been sitting and the cost of units have gone up and it is nothing anymore. The City ended up sending some of it for updating our previous Housing Element for administration costs. The money is so precious to try to build these units and we need to have good control over how those funds can be used if we are setting them up. She agreed with Chair Hauser that she does not want to see in-lieu fees but see things built as it is so hard to get any units built. She does not know if there is certain criteria by which they can come to us and she is sure there needs to be an exception if there is something unique or a particular hardship. If we can go to a place where we are mostly building those units, that would be her preference. She heard of going through and prioritizing other things. She had not heard that when going quickly through the Housing Element, but on funding our Housing Action Fund, we had put some money into it but now those sources of money are gone so how are we going to start putting that money back in so we can put in that money and get affordable housing.
Community Development Director Updegrave stated that we are hoping to come back in January or February with the Housing Element implementation plan, providing Council the opportunity to provide direction on what programs and actions we ought to be prioritizing. She stated that working on funding sources for the Housing Action Fund is something we have been in conversation with HEART about as part of our work with them in trying to find funding sources, and not just in-lieu fee but to have a more robust fund. Now, a lot of pir work has been trying to lay a framework, establish the policies, get the work done, get things on the book like get our manual, etc. That is something we will be coming back to Council in January or February looking for some direction on prioritization.
Councilmember Bier thought a city like ours, using some of the in-lieu money for that purpose, which was the Housing Element, was an appropriate use of funds as we do not have a lot of money anywhere else. We are extremely lucky to have HEART working with us. She thanked them as the experts we rely on them, adding that it is an honor to work with them as a board member. She appreciated all their suggestions and is very interested in looking toward the protection, production, and preservation policies moving forward.
Mayor Beckmeyer wanted to understand from staff what they need at this session, if anything specifically, and could we go one more time over rough timeline.
Community Development Director Updegrave stated she will start with the timeline. HEART as our staff experts are able to start drafting ordinances for updating and modernizing our City Council Joint Study Session 20 October 06, 2025
inclusionary and density bonus. The approach we are hoping to take is to do this initial modernizing clean up so we have clear resolution in terms of what the fee may be in place as we are getting applications coming in and we are able to implement. That is something we hope to do within the next six months, first quarter of the year. In terms of the more substantive changes, that would be the grand nexus and feasibility studies will probably completed at the end of 2026. There will probably be another update with some of the results and recommendations coming out of that. She imagined that would be work that happens in 2027 or 2028. In terms of direction, we heard different things and it is very helpful to understand what it is Council and Planning Commission are looking for, such as fractional fees and no other in-lieu fees.
Asst. City Attorney Murphy added the split for rentals and ownership and affordability levels.
Chair Hauser stated she has built market rate and deed restricted projects, as well as with HEART. She referred to Councilmember Wright’s question about what incentivizes developers to build housing. On rental housing, she thinks that should be deed-restricted in perpetuity. On for sale housing, she want the units to stay and want people in lower income situations to be able to participate in the housing market and build equity. She thinks building generational wealth is important and having the opportunity to do so is important. If you buy a deedrestricted home and you hold it in our current ordinance 45 years, Santa Rosa 30 years, and other cities 55 years, and you go through the hard part of holding that home for your family, you may not be seeing that participation but you are building generational wall for your family. She is torn as she loves the idea of having deed-restricted units in Pacifica but deed restricting for sale homes for people leads to why put down a down payment if you are not going to get the benefit of what everybody who buys a market rate home gets. She referred to Councilmember Wright speaking on incentives. They talked about the 120% moderate and she thinks the developers have a hard time building very low- and lower-income homes as it is hard to build a home from $600,000 to $800,000 more depending on what the fees are and only get $200,000 back for it, as that is the tax on development and that is part of development. She thinks some cities do a good job defining what they can define, such as what downpayment is part of our inclusionary ordinance, such as 3%, 5%, 7%, or 10% (maxed the State allows) She thinks it is important to define what percent income is qualifying, and she thinks it should be 30% for lower income households and 35% for moderate, consistent with the State. She wants to say that, while she thinks 120% does attract a lot of for sale development that Pacifica is not currently getting, if we choose to go to a lower AMI, we can do what Cotati just did and think about waiving impact fees on just deed-restricted affordable units as there may be some assistance there. She thinks, for the split on rental, lower incomes are better. For for-sale housing, she thinks the proposal HEART has put together is the right proposal and she would love to see an ordinance that clearly delineates the things we can define. If we are going to take out HOA fees, private mortgage insurance, property tax, and all the things that go into the calculation, it may not be perfect but at least the developer can predict out close.
HEART Representative Davis agreed, and in response to the question about the 45 years in perpetuity, he has looked at this question in terms of how you build intergenerational wealth, particularly in a city that was much more demographically diverse than here and had a tradition of black families being locked out of ownership. They had enough history on BMR units to say what did the resale price get them compared to what they would have gotten in the market.
They had a resale restriction that was 3% per year plus a capital gain. They found that was not quite sufficient but they had an earlier policy where it was 5% and the concern was, when they pulled it from 5% to 3%, about continuing affordability to the next family. They found, at the 5%, people were making the same percent increase that people in the regular market were making City Council Joint Study Session 21 October 06, 2025
over the long term. If you are an income-restricted unit, you are more protected from those downs in the market than in the regular market rate units. In the long term, they were about the same increase.
Councilmember Wright asked on a national level, State level, or Bay Area level.
HEART Representative Davis stated he moved from Boston, Massachusetts, and this was research they did in Boston where they had a 20-year-old BMR program with thousands of units created. They had the track record there. It was also a high cost area with high increases like here so there was some comparability. The lesson learned from that is that you can adjust some of how you set your resale mechanism within your agreements to make sure people can still get something. One thing they were proposing was having the fund where you are guaranteed of getting that resale price and, if they may have to give a bigger down payment to the next buyer to get them into that unit.
Chair Hauser thought that was helpful for her to understand.
HEART Representative Davis stated that the balance you are looking at is between the longterm affordability as affordable to the next homeowner and you want to give them some equity.
If they are there for the 45 years, they are hitting a jackpot at that point if you just lifted the restriction.
Councilmember Espinosa asked if you can pass the property to the next generation.
HEART Representative Davis stated that, within the legal agreements, there are ways you can pass it along to the next generation. Generally speaking, you want that next generation to also be income eligible, so they are benefitting. If they are not income-eligible, they say they should sell it to someone who is.
Councilmember Espinosa assumed they have to qualify as well.
HEART Representative Davis responded affirmatively.
Vice Mayor Boles stated when someone qualifies initially, and then they are moving up and making more money, are they still forever granted that unit because they qualified at that point or is there any review, especially for rentals.
HEART Representative Davis stated, for rental units, there is a review every year. For homeownership units, once you are in the unit, it is yours. If your income goes up, the question of some of the costs you might incur as a homeowner, you are still seeing that lower mortgage rate and, over time, you could get some equity.
Vice Mayor Boles stated, regarding the question of the term lengths, she has not heard of too many in perpetuity and obviously that is something they would love but do they see that as a disincentive for developers.
Chair Hauser stated that in ten years the developer is gone.
HEART Representative Davis agreed to that, as the timeline for the developer is not that far out.
He clarified that the State density bonus law requires a minimum of 45 years on homeownership and 55 on rentals which is your baseline.
City Council Joint Study Session 22 October 06, 2025
Councilmember Wright asked, if they contemplated that, if you owned that unit for less than five years, you get a lower rate versus getting 5% bonus over the whole time if you own it for longer.
HEART Representative Davis stated that they did not contemplate it in that case.
Councilmember Wright thought that would be a good incentive to help build generational wealth.
HEART Representative Davis stated that they have seen, if you resold within a very short period of time, you did get a lower rate.
Councilmember Wright asked Director Updegrave how many units we build this year.
Community Development Director Updegrave stated, in 2024, we constructed a total of 20 units, 16 of which were accessory dwelling units. We do not have the numbers for 2025 yet.
Councilmember Wright asked if she has any idea how many we approved.
Community Development Director Updegrave stated, if in title, in 2024, we entitled two units.
Chair Hauser asked two of two applications.
Community Development Director Updegrave responded affirmatively, adding that, with the rezoning, we are anticipating additional applications coming in.
Councilmember Wright referred to the low income and asked what counts as income.
HEART Representative Davis stated they are looking at your employment income, public assistance income, income from assets such as interest, etc. They are looking at the adjusted gross income on your income taxes. That is looking at your past income and they are trying to see what your current income is and looking for the same documents you submitted for your income taxes.
Councilmember Wright asked if there was a net worth piece there.
HEART Representative Davis stated that is a policy decision and something they can discuss as part of this process. There are two different philosophies on this. In San Francisco, they have imputative income where 10% of your assets contributes to your annual income. They do not have an asset cap on the program. If you have a lot of assets, you end up having an imputed income that makes you go over income. There are other places that say they are only going to take the interest they are getting on the assets and they may have an asset cap either for a rental program or homeownership program. It may be different if you are a senior and they may not count pension and 401Ks towards that number.
Councilmember Wright stated, along those lines, if we did not have one, we might attract more seniors to purchase it which would cause more turnover in the units. He asked if that would be a beneficial or negative thing.
Vice Mayor Boles stated that is the fastest growing homeless population so she thinks it is a beneficial thing by helping more people over time.
City Council Joint Study Session 23 October 06, 2025
Councilmember Wright thought the question we would need to think about and get direction on is how we handle net worth.
HEART Representative Davis stated there is more than one way to do it.
Mayor Beckmeyer asked, for our purposes in discussing and thinking about those policy decisions, if it would be in relationship to our demographic in Pacifica. It seems it is not changing dramatically and we are steadily growing our aging population and it seems like we want it to be pertinent to what Pacifica’s demographics look like.
HEART Representative Davis stated that, generally, those guidelines are within our guidelines, not in the housing ordinance; we have the flexibility to change them and we certainly could be part of the discussion.
Community Development Director Updegrave thought it would be helpful if there was consensus on how to handle the in-lieu fees, such as coming back with a fractional fee only.
HEART Representative Davis stated that they are recommending strongly that we update the fees by the changes in home values and CPI.
Mayor Beckmeyer asked if he means from 2007 to 2025.
HEART Representative Davis agreed, adding that we want clear guidance on that.
There was Council consensus to update the fees by the changes in home values and CPI as well as on the fractional unit in-lieu fee.
HEART Representative Davis thought a question that might get some different responses is, in terms of changing the affordability levels, they proposed a 60-80-100 in terms of the rental units, which is the same outcome for the developer as a 50-80-110.
Councilmember Bier does not want to bring up the bottom any more than we already have and she thinks it should stay at 50.
Chair Hauser thinks we have to hit certain percentages like different bedroom counts to try to get the family tax credits and there may be different AMIs part rate. She stated, as you are trying to get Low-Income Housing Tax Credit (LIHTC) financing from the State for affordable housing, there are different requirements. She does not want to do something in Pacifica that disallows an affordable developer from getting credit. She almost wants to say the blended average should be determined and the developer can determine how they want to hit it. Maybe part of the study is what does an affordable developer need to hit to get tax credit.
HEART Representative Davis thinks it will be helpful to clarify the difference. He is speaking only about the on-site inclusionary units. When they are spending money from a fund, they want to make it available to what will work for a project that can get California Tax Credit Allocation Committee (CTCAC) funds. They have a lot more flexibility there.
Chair Hauser clarified just inclusionary rentals.
HEART Representative Davis stated they were talking about inclusionary. He was basically giving them what the blended average which was 80% AMI for 60-80-100 and 50-80-110. He City Council Joint Study Session 24 October 06, 2025
stated that they can discuss this later. He stated, on the homeownership, they were considering leaving ours unchanged but he asked if there was an interest in going to 80-100-120 or 80 and just 120. That is another whether you are opening the option for 100% units.
Councilmember Wright stated he would be in favor of 80-100-120.
Chair Hauser thinks we are going to have a hard time getting people to build here. She thinks we do what HEART recommended, as what they recommended is consistent with South San Francisco and Daly City. The low moderate blend is what almost every San Mateo County city has in their ordinance.
Councilmember Wright agreed.
Vice Mayor Boles stated low is 80.
Chair Hauser stated, to be clear, the 120 and 80 is whatever the administrator is using to qualify buyers but the affordable sales price is being set at a lower percent of that.
HEART Representative Davis agreed, stating 10% points lower to create a marketing window.
Chair Hauser stated that allows more families to qualify.
HEART Representative Davis responded affirmatively.
Vice Chair Berman stated, to round out the in-lieu fee from her perspective, we will have a better idea after the grand nexus study, but she will be interested in seeing what an in-lieu fee cost would be to a developer for the developer to say it does not make sense for them to pay this in-lieu fee versus building the units instead. She still likes the ability for the City to gain that in-lieu fee if there happens to be a developer willing to pay that very high cost.
Community Development Director Updegrave heard that changing the structure to possibly not allow in-lieu fees at all or only in special circumstances or part of the fraction, whatever it may be, may be part of what we bring back once we have the data from the study. More immediately, it would be updating the price and adding provisions to allow for fractional fee payments. She stated this more restrictive use is something we would something we would explore at a future date.
Vice Chair Berman stated she may be seeing them as mutually exclusive to where there was a recommendation if there is a fractional unit, they update the fee per HEART’s recommendation.
She is on board with that, but she is not convinced that she would want to update an ordinance that says there is no in-lieu fee for full units, only in-lieu fee for fractional units.
HEART Representative Davis stated that is not what they are recommending. He stated there was discussion about cities that are too restrictive in the options and are in danger of being sued because they did not provide options. It is important we have some options that are reasonable and we can still set something that sets a preference, a steering but not an absolute prohibition.
Vice Chair Berman stated whoever is reviewing the options for consideration next, she thought it would be helpful to see the updated in-lieu fee numbers, assuming that we do not have a prohibition on paying an in-lieu fee. We could allow developers to pay an in-lieu fee and what is City Council Joint Study Session 25 October 06, 2025
that fee and how much does it cost to build a unit, how do we make that fee so high that it really incentivizes developers to build the unit.
Councilmember Wright stated that there are social benefits to having the units built as part of the whole housing project.
Vice Chair Berman stated that is what she is most interested in, but she thinks having the opportunity for a developer to pay a high in-lieu fee is potentially beneficial that developer but also beneficial to the city.
Chair Hauser stated, instead of having an in-lieu fee, can we add a different fee that is more of a one-time tax that every project has as it would be dependent on size. There would be an affordable fee that was not in lieu.
Vice Chair Berman stated that we are then still funding that program.
Chair Hauser agreed. She asked if a park fee was still an in-lieu fee.
Vice Chair Berman stated that we do not get a lot of developments.
Chair Hauser stated that we can think about how many second loans, home buyer assistance, etc. She stated that there are other things you can do with the money to get deeper affordability.
Vice Chair Berman stated she was asking how do we make sure we get the money. She was concerned if it is just a tax per development and we only have one development every year.
Vice Mayor Boles would love to see the numbers too. If you are given that money today, and you have to save up to have enough for ten of those, by then the money is worth less. She stated that it is a losing game to be taking in-lieu fees. She assumes there are some limits to how much we can charge.
Asst. City Attorney Murphy agreed, and she thought it could be problematic to have a fee in addition to a requirement to build unless it is somehow proportionate. She thinks there was a discussion about in-lieu fees in coordination with building units to meet the obligation that there is some kind of mix that could be looked at. In terms of just having a separate fee, such as an impact fee that would have to go through a nexus study, and then have the on-site building obligation as well, that is going to be difficult.
Chair Hauser asked about a fair share fee for administering the BMR program.
Asst. City Attorney Murphy stated that, in agreements, you can have a monitoring fee and can make the developer pay the cost of implementing the program. It can be upfront fee to run the BMR sales and a yearly monitoring program for rental units, which is fairly common. She does not know if we would want a monitoring fee for the ownership units.
HEART Representative Davis stated you want them to keep their money.
Asst. City Attorney Murphy agreed, adding that there will be costs at resale and refinance and maybe there is some way to capture some of those fees at that point but certainly in the initial phase requiring a fee of the developer to pay for the cost of implementing everything is fine.
City Council Joint Study Session 26 October 06, 2025
HEART Representative Davis stated too many cities have not put monitoring fees into the legal agreements and it could be a larger fee for initial rent up of a unit, for turnover of a unit, and then a smaller annual fee for the rental monitoring to charge the landlord. They were going more into BMR monitoring space as an agency and looking to see what they think those numbers will be reasonable.
Councilmember Espinosa asked if we can see other cities’ ordinances as they are getting builders to build and they are very close to us. She asked what we can do to get them to be incentivized to come to Pacifica to build.
Community Development Director Updegrave thinks that our Housing Element and Rezoning Program has laid the foundation and we have the regulatory framework that provides more certainty, more clarity in the rules. She stated that we have no control over market conditions, and cost of construction, cost of land, and interest rates are all very high right now and that is impacting construction. However, she thinks we are in a good place in terms of our regulatory framework. As we work to modernize our ordinance and make our regulations clearer and more predictable, streamline our processes, etc. all things that will be very helpful. Having updated inclusionary and updated density bonus all contribute to that.
Commissioner Davis saw a density bonus ordinance that was unenforceable because of the State and she thought that should be updated. The in-lieu fee resolution are from 2007, but there is some interest in their group of eliminating an in-lieu fee as a possibility and going to fractional one. In the meantime, while we wait for grand nexus study, what if we update the inlieu fees so at least they are current until we decide to change them but not giving them away.
She asked if those would be logical steps forward.
HEART Representative Davis stated some of the changes they were thinking about for the inclusionary ordinance are technical changes to bring them in line with best practices. He thinks this conversation is the most salient about any changes in the conversation about changing the affordability levels. He thanked them tonight as this has been a great discussion and this was a good example of people asking thoughtful questions.
Mayor Beckmeyer appreciated him very much and his support in partnership.
ADJOURN
Mayor Beckmeyer adjourned the meeting at 9:10 p.m.
Transcribed by Barbara Medina, Public Meeting Stenographer.
Respectfully Submitted,
Sarah Coffey, City Clerk
APPROVED: 5 - 0; 10/27/2025
__________________________
Sue Beckmeyer, Mayor