Pinole City Council
July 7, 2026

11 • For Moderate-income households, the product of 30% times 110% of the AMI, adjusted for family size appropriate for the unit.

The County 2025 maximum affordable monthly rents for each income category by unit size is summarized in Table 4. Note that the amounts shown in Table 4 are prior to deducting a utility allowance.

Table 4: Contra Costa County Affordable Rent Limits
The value of an affordable rental unit is a function of the net operating income (“NOI”) it provides the property owner. This is determined by calculating the annual gross income generated by the unit, reduced by a vacancy factor, operating expenses, reserves, and property taxes. Lenders’ underwriting standards generally incorporate a 5% vacancy factor. Comparable annual operating expenses (excluding real estate taxes) for affordable rental units are about $6,000 per unit per year plus $250 per unit for annual reserve fund deposits. RSG assumed that the real estate tax rate would be 1.25% of unit value. Although non-profit affordable housing developers construct most affordable apartments, which are exempt from property taxes, for the purpose of this Analysis we have included real estate taxes because the inclusionary units would be within a market rate development subject to real estate taxes. The NOI for the affordable unit represents the affordable rent by income category less vacancy, operating expenses, reserves, and real estate taxes.

To establish the value of affordable rental units, RSG followed industry practice of applying a “yield on cost” to the projected NOI per unit. For stabilized multifamily properties, prospective investors will use a capitalization rate, or “cap rate” to evaluate potential acquisitions.

Alternatively, for new developments, investors often rely on a yield on cost to evaluate potential project returns. Both rates are reflective of the relative risk of an asset based on asset type, location, age and condition of the property, and tenant quality. Cap rates and yield on cost are related in that cap rates are generally lower than yield on cost because stabilized assets with known gross rents, operating expenses, and vacancy rates are generally less risky than new development. Developers refer to the separation between market cap rates and yield on cost as the development yield – which is the spread associated with the additional risk of new development.

RSG referred to current market reports and Costar to determine market cap rates to understand current development yields and required yield on cost. In the second quarter of 2025, cap rates for multifamily housing in the market area ranged from 4.5 to 6.7%. Development yields were Income Category AMI 0 1 2 3 4
Extremely Low 30% $839 $959 $1,079 $1,199 $1,295
Very Low 50% 1,398 1,598 1,798 1,998 2,158
Low 60% 1,678 1,918 2,157 2,397 2,589
Moderate 110% 3,076 3,516 3,955 4,395 4,747
Rent Limit by Number of Bedrooms
Sources: California Department of Housing and Community Development, RSG

12 shown to be about 100 basis points, meaning that market yield on cost would thus range from 5.5 to 7.7%. For the purpose of this Analysis, RSG used a 5.0% cap rate and 6.0% yield on cost.

To determine values for rental units, RSG then applied the yield on cost to the calculated NOI per unit. Table 5 shows the resulting capitalized value per rental unit for varying unit sizes and income levels based on affordable cost, NOI, and market cap rates.

Table 5: Value of Prototype Affordable Rental Units
Affordable Sale Prices
RSG calculated maximum affordable sale prices pursuant to HSC Section 50052.5(b) to reflect the affordable housing cost per income category, adjusted for household size, as a percentage of the gross AMI, allowing for the deduction of related housing expenses.

The calculation of annual affordable for-sale housing cost may not exceed the following:
• For Extremely Low-income households, the product of 30% times 30% of the AMI, adjusted for family size appropriate for the unit.
• For Very Low-income households, the product of 30% times 50% of the AMI, adjusted for family size appropriate for the unit.
• For Low-income households, the product of 30% times 70% of the AMI, adjusted for family size appropriate for the unit.
• For Moderate-income households, not less than 28% of the household’s gross income, or more than the product of 35% times 110% of the AMI, adjusted for family size appropriate for the unit.

Income Category 0 1 2 3 4
Ext. Low Annual NOI $883 $1,846 $2,484 $3,135 $3,521
Extremely Low Value $14,134 $29,531 $39,739 $50,154 $56,343 Very Low Annual NOI $6,160 $7,877 $9,267 $10,673 $11,663 Very Low Value $98,553 $126,026 $148,273 $170,765 $186,615 Low Annual NOI $8,798 $10,892 $12,659 $14,442 $15,734
Low Value $140,763 $174,274 $202,540 $231,070 $251,750
Moderate Annual NOI $21,988 $25,970 $29,617 $33,287 $36,089 Moderate Value $351,813 $415,514 $473,876 $532,596 $577,429 NOI and Capitalized Value by Number of Bedrooms
Sources: California Department of Housing and Community Development, Costar, Real Estate Research Corporation, CBRE, RSG

13 Table 6 identifies the County 2025 monthly affordable for-sale housing cost limits by income category and unit size, as calculated in accordance with the above formulas.

Table 6: Monthly Affordable For-Sale Cost Limits
To establish the value of affordable for-sale units, RSG first calculated what monthly mortgage payment amount a qualifying household could afford, after deducting estimated homeowner expense categories (i.e., taxes, insurance, maintenance costs, and utilities). Based on the resultant monthly mortgage payment limits, and assuming a 5% down payment and a 30-year amortized loan with a 6.25% interest rate, RSG calculated the maximum estimated affordable sale prices by income category and unit size, as summarized in Table 7.

Table 7: Affordable Sales Prices

Affordable Housing Development Funding Gap
The affordable housing development funding gap reflects the difference between the estimated cost to develop the unit, which is based on construction costs and land values in the market area, and the value that a developer can expect to receive from the affordable unit, which is determined by the affordable rent or sales price as shown above. Therefore, the development funding gap is an indication of the net cost to create an affordable housing unit, which is funded either by a developer under an inclusionary program, through a subsidy program, or some other resource.

The cost per unit for affordable housing units is similar to those for market rate units, with an exception perhaps to account for somewhat smaller unit sizes and slightly lower quality materials and finishes, to the extent allowed. The methodology herein reflects the assumption of all things being equal for each prototype, such as unit size, construction costs, and land costs. RSG calculated a weighted average affordable development funding gap for each of the prototypes by blending the affordable values of the different bedroom unit sizes within each prototype project.

Income Category AMI 0 1 2 3 4
Extremely Low 30% $839 $959 $1,079 $1,199 $1,295
Very Low 50% 1,398 1,598 1,798 1,998 2,158
Low 70% 1,957 2,237 2,517 2,797 3,021
Moderate 110% 3,589 4,102 4,614 5,127 5,538
Cost Limit by Number of Bedrooms
Sources: California Department of Housing and Community Development, RSG
Income Category AMI 0 1 2 3 4
Extremely Low 30% $53,095 $61,512 $63,924 $65,811 $64,214 Very Low 50% 134,252 154,278 168,263 181,759 189,451
Low 70% 215,408 247,044 272,603 297,708 314,687
Moderate 110% 452,116 517,612 576,926 635,892 679,959
Affordable Price by Number of Bedrooms
Sources: California Department of Housing and Community Development, RSG

14 Table 8 shows the development funding gaps for affordable units by product type and income level.

Table 8: Affordable Development Funding Gap
The development funding gaps shown in Table 8 reflect the financial impacts associated with including these affordable units within a market rate development project, and without the benefit of tax credits or other funding sources often used by affordable housing developers. Local, state, and federal funding programs often award financial assistance to developers of affordable housing projects, such as 4% or 9% Low-Income Housing Tax Credits (“LIHTC”), which help reduce the funding gaps in order to make the development more financially feasible. However, these subsidies are not available to market rate developers complying with inclusionary programs.

Accordingly, this Analysis uses the full funding gap amounts in Table 8 as the initial basis for determining the cost of compliance with the Policy.

15 SECTION 4: POLICY DESIGN OPTIONS AND BEST PRACTICES
To assist the City as it considers amending its Ordinance, RSG is providing the following design element questions, along with a brief discussion of options and best practices, based on the experience of other communities with inclusionary requirements. The goal of an inclusionary ordinance should be to increase the diversity of housing prices/rents throughout the community and ensure that a range of available and affordable prices/rents continues over time. The Ordinance and accompanying in-lieu fee should be supported by data and research that establishes both the need and feasibility of producing affordable housing in the housing market. o Which projects should the Inclusionary Housing Ordinance apply to? RSG recommends applying inclusionary housing ordinances to all new residential development, including both single family, condo/townhome, and multifamily developments. The City may choose to exempt mixed use projects with rental housing and commercial uses like retail or services, treating the commercial uses as a community benefit.

Based on RSG’s experience with inclusionary housing ordinances in California, occasionally cities will exempt developments with four units or less. Developments with four units or less are potentially eligible for conventional residential mortgages, as well as VA and FHA loans.

Developments with four units or less are also commonly appraised using the sales comparison approach, which is the same approach used to evaluate single family homes and condominiums.

In California, housing with 5 units or more is considered “commercial” real estate because it requires a commercial loan, which often have stricter terms, higher interest rates, and shorter amortization.

In jurisdictions with inclusionary housing requirements, fractional unit obligations often arise in smaller-scale residential developments. For example, under a 15% inclusionary requirement, a development project with 10 units would generate an inclusionary requirement of 1.5 affordable units. In such cases, permitting developers to satisfy the obligation through a hybrid compliance pathway—such as constructing one affordable unit on-site and remitting a proportional in-lieu fee for the remaining 0.5 unit obligation—can enhance feasibility. This approach may reduce regulatory friction and incentivize production of modestly sized projects that would otherwise be deterred by rigid unit-count thresholds.

The City may consider limiting the option for payment of an in-lieu fee exclusively for the first 10 units, such that developments with more than 10 units may pay the in-lieu fee for the first 10 units, and then fulfill the remaining inclusionary requirement either by on-site or off-site unit production, unless they demonstrate through compelling data and analysis that providing on- or off-site unit production is financially infeasible. This approach mitigates the challenge associated with fractional unit obligation previously discussed.

The City may consider requiring developers who opt to pay the in-lieu fee to submit a public impact statement with an explanation of why they are not providing inclusionary units on-site.

16 o What alternative methods of compliance should be provided? In California, state law requires that communities with inclusionary housing requirements provide alternative methods of compliance. Common alternatives include in-lieu fees, off-site construction, land donation, and the acquisition and rehabilitation of existing units.

Jurisdictions with inclusionary housing policies typically deposit in-lieu fees into a local affordable housing fund to finance future construction of affordable housing at other locations in the community. The greatest advantage of in-lieu fees is that they provide a local funding source that jurisdictions can leverage with state and federal funds that otherwise would not be available to a developer, allowing an even greater number of affordable units to be built, often at much deeper affordability levels. RSG estimates that by leveraging local affordable housing funds, jurisdictions may be able to produce four to six times more units than would otherwise be developed as inclusionary housing units.
o Should the Policy’s affordable unit production requirement change over time? Housing markets are constantly changing, including rents, sale prices, and construction and financing costs. Developer profitability rises and falls over time based on a variety of market factors, and required returns can vary from one developer to the next. The cost of compliance with an inclusionary policy may be only a relatively minor consideration among many factors for development feasibility. A modest inclusionary requirement that is evaluated to be feasible when adopted should likely remain feasible over time. It is also possible that, when profitability increases, the development community could feasibly absorb a higher inclusionary requirement.

Periodic review can determine how feasibility is impacted by market changes. It can also allow the community to assess whether changes in the target income levels may be necessary to better meet housing targets. Every three to five years is a reasonable review period. RSG suggests coupling the review with the update to the City’s Housing Element as a best practice. o How should the amount of an in-lieu fee be determined? The cost of providing an inclusionary unit will vary by which income levels are required under the ordinance and the size and type of unit. RSG estimates a range of such costs using current market economics and prototypical development. A standardized in-lieu fee can only approximate these costs based on the range of policy options included in the ordinance.

The in-lieu fee should be reviewed and revised over time to reflect changes in construction costs, inflation, and other market factors. While an inclusionary policy is usually adopted by an ordinance, the in-lieu fee is best adopted by resolution since amending the ordinance on a regular basis can be more costly and time-consuming.

Ideally, the in-lieu fee should reflect the true cost of producing on-site units. If the fee is lower than the actual cost of production, developers are very likely to pay the in-lieu fee rather than designate any units in the project as affordable. Even at an equivalent or comparable cost, developers are still more likely to pay the fee rather than assume long-term management of affordability covenants associated with a small fraction of units.

17 o Should the in-lieu fee be set as a per unit fee or a per square foot fee? In-lieu fees are often denoted as the amount a developer would need to pay per unit in a market rate project to meet its obligation, rather than as the net cost of each inclusionary unit that otherwise would be required to be built on-site. In other words, if there was an inclusionary requirement of 10%, the in-lieu fee per unit multiplied by ten should approximate the cost of providing one inclusionary unit. Establishing the in-lieu fee on a per unit basis is quite common because developers typically evaluate development projects in terms of cost per unit. Per unit inlieu fees are also easier to quantify for program administrators.

However, the drawback with establishing a fee on a per unit basis is that it does not adjust for the size of units in a project and can lead to inequities in implementation. For example, a developer creating large multi-bedroom homes would pay the same in-lieu fee per unit as a developer of small one-bedroom or studio units, even though the construction costs and affordable funding gaps are widely different. RSG typically recommends establishing the in-lieu fee on a per square foot basis that can then be multiplied by the total residential square footage in a project to calculate the inclusionary obligation.
o What other communities in the region have inclusionary housing requirements? When setting an in-lieu fee, it can be helpful to look at surrounding communities with similar policies so the City does not unduly increase the cost of new development relative to the area.

RSG researched communities in the County and determined that Pinole is one of eight cities in the County that has inclusionary housing requirements. The County of Contra Costa also has inclusionary housing requirements for unincorporated areas within the County.

Table 9 provides examples of inclusionary housing policies in four Contra Costa County cities and two Alameda County cities for reference purposes. The jurisdictions are listed in order of in-lieu fee per rental unit, which may or may not approximate the true cost of on-site compliance. For comparison with jurisdictions that have set a per market rate unit fee, RSG has estimated that same fee on a per square foot basis using Pinole prototypes. Similarly, for jurisdictions with a per square foot fee, RSG estimated that fee on a per market rate unit basis.

Inclusionary policies can vary significantly across jurisdictions based on local market economics, adjustments since policy adoption, local policy preferences, and other factors. • Local Market Economics: One possible explanation for the wide range of in-lieu fees across different Bay Area jurisdictions is the range of home sales prices and multifamily rental rates in the corresponding areas. The median home price in Danville, which has the highest median home price in Contra Costa County, is $2.3 million, which is more than three times as much as the median home price in Pinole ($735,000). The lowest median home price in Contra Costa County, by contrast, is in Richmond where the median homes

18 sale price was $560,000 in June 2025. 2 Pinole has one of the higher median rental rates among the cities presented in Table 9 at $2,409, whereas Richmond has the lowest median rent at $1,853. In comparing the cost of compliance with the inclusionary requirement or paying an in-lieu fee in Pinole versus other communities, it is important to also consider the differing feasibility of development in those locations. • Policy Adoption Date and Inflators: Occasionally, inclusionary housing policies are adopted with annual in-lieu fee inflators. Over time, this can cause a disconnect between the actual cost of on-site compliance and in-lieu fees. Including an inflation-adjustment for an in-lieu fee may help approximate increases in construction costs, but it would not capture changes in affordable rents and prices, or market yield on cost, which also determine the cost of inclusionary units.
• Local Policy Incentive Preferences: Some cities have a policy preferences to encourage on-site unit production as opposed to in-lieu fee payment. One way to do this is by setting an in-lieu fee that meets or exceeds the affordability gap amount, as illustrated in Table 8.

Developers should find that it is more feasible to include the units than to pay the fee.

Alternatively, many cities have a policy preference to encourage payment of in-lieu fees and to minimize the cost-burden on residential development. Adopting an in-lieu fee amount that is equal to or lower than the maximum feasible in-lieu fee would encourage payment of the fee in-lieu of on-site unit production, which the City could potentially leverage with State and Federal funding sources to increase total affordable unit production.
2 Source: Realtor.com, June 2025

19 Table 9: Inclusionary Requirements in Other Jurisdictions Inclusionary Req Minimum Units % AMI Requirement In-Lieu Fee per SF In-Lieu Fee per Unit City
Last
Update Rental Ownership Rental Ownership Rental Ownership Fee Type Rental Ownership Rental Ownership Pinole
(Recommended) 2025 15% 4
VL,
Low Mod Per SF $12 $9 $10,620* $20,700*
Pinole (Existing) 2010 15% 4
VL,
Low Mod N/A N/A N/A N/A N/A
Richmond 2020 9% or
10% (1)
7% or 10%
(1) 10 10 VL or Low Low or Mod Per SF $12 N/A $12,000* N/A Concord 2024 15% 6% 10 10
VL,
Low,
Mod
Low, Mod Per SF $15 $20 $12,750* $46,000*
El Cerrito 2018 5 units +
5% (2) 12% 10 9
Mod,
Low Mod Per SF $17 $20 $17,000* $46,000*
Berkeley 2023 20% 1 1
VL,
Low Low Per SF $56.25 $56,250* $129,375*
Pleasant Hill 2019 5% or 10% (3) 5 VL or Low Per Unit $118* $271,350 (4) (1) The inclusionary requirement in Richmond (Richmond Municipal Code Section 15.04.603.040) is dependent on income level targeting. For rental development, the developer shall provide either (1) 9% of units affordable to very low-income households, or (2) 10% of units affordable to low-income households. For ownership development, the developer shall provide either (1) 7% of units affordable to low-income households, or (2) 10% of units affordable to moderate-income households. (2) In El Cerrito, the inclusionary housing requirement (El Cerrito Municipal Code 19.30.040) establishes that at least five of the total dwelling units in the residential development shall be made available for rent at an affordable housing cost to moderate income households, and five percent of the total dwelling units in the residential development shall be made available for rent at an affordable housing cost to lower income households. (3) In Pleasant Hill, the inclusionary requirement (Pleasant Hill Municipal Code Section 18.20.060) varies based on income level targeting. At least 10% of the units shall be affordable to low-income households, or at least 5% of units shall be affordable to very low-income households. (4) Pleasant Hill’s in-lieu fee is updated annually by resolution “in an amount sufficient to represent a reasonable portion of the gap between the affordable sales prices (at the low income level of affordability) and the market rate sales price for single-family housing. In order to determine the in-lieu fee, the following amounts shall be calculated: (a) a developer’s cost to construct a dwelling less the affordable sales price (the “developer’s difference”) and (b) the market-rate purchase price less the affordable sales price (the “market-rate difference”). The in-lieu fee shall be based upon the average of the developer difference and the market-rate difference for each of the following home sizes:
a 1,200 square foot, two-bedroom home; an 1,800 square foot, three-bedroom home; and a 2,200 square foot, four-bedroom home.” Note: an asterisk (“*”) indicates that RSG estimated this in-lieu fee based on the corresponding in-lieu fee per square foot or per unit using the prototype square footage for the appropriate development prototype (single family residential or multifamily).

20 SECTION 5: ANALYSIS OF INCLUSIONARY HOUSING IN-LIEU FEE FOR THE CITY OF PINOLE
This section discusses the potential cost of compliance under the City’s existing Ordinance and concludes with RSG’s recommendations for an amended City Ordinance and in-lieu fee amounts.

RSG evaluated the existing Ordinance from two perspectives: (1) affordable housing development funding gaps (the true cost of on-site compliance), and (2) the impact of a potential fee on market rate housing development feasibility.

Affordable Housing Development Funding Gaps
RSG used the affordable housing development funding gap for each prototype from Table 8 to calculate equivalent in-lieu fees. First, RSG applied the City’s Ordinance income level targeting (two thirds of inclusionary units at very low-income, and one third at low-income) to the affordable housing gaps calculated in Table 8, resulting in a weighted affordable housing gap for each prototype. The calculation of weighted affordable housing gap for each prototype is presented in Table 10.

Table 10: Income Level Targeting Weighted Affordable Housing Gap

The weighted affordable housing gaps presented in Table 10 are further based on the on-site affordable unit production percentage (15%). The product resulting from multiplying the weighted affordable housing gaps by the affordable unit production percentage represents the weighted average per-market-rate-unit in-lieu fee that a project might be charged, as presented in Table

11. The in-lieu fee calculated in this way represents the full net cost to a developer of providing on-site inclusionary units.

RSG then converted the in-lieu fee per unit to an in-lieu fee per square foot for each of the prototype housing development types by dividing by the prototype unit square footage from Table

21 2. The quotient represents the “supportable” in-lieu fee per square foot, as illustrated in Table 11.

In other words, this fee amount is supported by the analysis of equivalent cost of compliance.

Table 11: Calculated Supportable In-Lieu Fee per Unit and per Square Foot RSG’s calculated supportable in-lieu fees are roughly equivalent to the cost of on-site compliance based on the on-site affordable unit production percentage of units, the income level targeting mix, and the projected funding gap specified in the City’s Ordinance. These costs will be different for each prototype due to their differing development economics. RSG recommends setting the in-lieu fee to be closely aligned with the estimated cost of on-site compliance so that the in-lieu fee is truly an equivalent alternative to on-site unit production.

Developers are typically motivated to seek the least costly path of compliance. When the adopted in-lieu fee is less than the actual projected cost to include affordable units on-site, developers are more likely to pay the in-lieu fee than provide units on site. Conversely, when the adopted in-lieu fee is greater than the actual projected cost to include units on-site, developers are more likely to include affordable units in their projects.

With an in-lieu fee that is closely aligned with the actual projected cost of including units on-site, developers will consider project-specific economics and other factors (such as community support and goodwill) to determine how they choose to comply with the Ordinance. Some cities may intentionally set an in-lieu fee amount that is lower than the actual projected cost of on-site compliance with the expectation that most developers will pay the fees rather than include affordable units on-site. Those cities will aggregate and contribute those funds towards projects that leverage regional, state, and federal funding sources to produce a greater number of affordable units at deeper affordability levels.

22 Prototype Feasibility
In the next phase of this Analysis, RSG evaluated the impact of the Ordinance on the feasibility of development. The City can modulate program requirements or reduce the in-lieu fee to mitigate the cost impacts on development.

As a measure of feasibility, RSG evaluated two common benchmarks used in real estate development investment decisions: projected “profit margin” and “yield on cost”. For evaluating ownership housing product type feasibility, profit margin is defined as development project surplus value divided by development costs. As a rule of thumb, projected profit margin for ownership housing should exceed market cap rates by 150 to 250 basis points. With capitalization rates for multifamily residential projects ranging from 4.5 to 6.7% in May 2025, projected profit margins should range from 6.0 to 9.2% for ownership prototypes to be deemed feasible after applying the in-lieu fee. For the purpose of this Analysis, RSG evaluated the feasibility of each for-sale housing prototype using a 7.25% minimum profit margin.

For multifamily rental product types, yield on cost is defined as stabilized net operating income as a percent of development costs. As a rule of thumb, the projected yield on cost for multifamily development should exceed market cap rates by 100 basis points. Based on May 2025 cap rates for multifamily residential projects, projected yield on cost should range from 5.5 to 7.7%. For the purpose of this Analysis, RSG evaluated the feasibility of the rental housing prototypes using a

6.25% minimum yield on cost.

Using the metrics described above, RSG evaluated the feasibility of each of the residential prototypes (a) without any inclusionary requirement, (b) under the existing Ordinance using the maximum supportable fee, and (c) using the weighted costs of compliance under each of the potential design options illustrated in Tables 10-11. RSG’s analysis resulted in the following findings, as further illustrated in Table 12.
• The maximum supportable fee, which is $25 for single family residential, $5 for condo/townhome, and $49 for small and large scale multifamily, represents an estimated cost of on-site compliance. Only the condo/townhome prototype is feasible based on the cost of on-site compliance under the City’s existing Ordinance. • The ownership prototypes are feasible when in-lieu fees range from $11 (single family residential prototype) to $12 per square foot (condo/townhome prototype). • Rental prototypes are feasible when in-lieu fees at $9 per square foot (large scale multifamily prototype).
• The mixed-use prototype was infeasible. Rather than imposing an in-lieu fee or inclusionary requirement on mixed use development, the commercial (retail or services) portion of the mixed-use proposal may be considered a community amenity in-lieu of any inclusionary requirements.

23 • The maximum in-lieu fee that is projected to allow for feasible development for all prototypes under current market conditions would be $11 per square foot for ownership prototypes and $9 per square foot for rental prototypes.

Table 12: Feasibility of Protypes, Existing Policy, and Recommended Policy

24 Based on this Analysis, RSG finds that an inclusionary housing ordinance with the following rates would optimize development feasibility:
• An in-lieu fee of $11 per square foot for ownership product types; and • An in-lieu fee of $9 per square foot for rental product types.

RSG also found that an inclusionary housing ordinance with the following in-lieu fees would be supportable based on the cost of producing an affordable unit. This approach to setting in-lieu fees would encourage on-site unit production rather than payment of the in-lieu fee; however it could also deter housing development if developers find the fee too high to make their project feasible:
• An in-lieu fee of $5 per square foot (condo/townhome) to $25 (single family residential) for ownership product types; and
• An in-lieu fee of $49 per square foot (small and large scale multifamily) for rental product types.

25 SECTION 6: CONCLUSIONS AND POLICY CONSIDERATIONS
The following presents a summary of RSG’s policy considerations and recommendations:

Policy Considerations and Recommendations
In-Lieu Fee RSG finds the following in-lieu fees would optimize development feasibility:
• An in-lieu fee of $11 per square foot for ownership product types; and
• An in-lieu fee of $9 per square foot for rental product types.

A higher fee will encourage on-site production and provide funds to cover the cost of producing an affordable unit; a lower fee will cover a lower portion of the cost of producing an affordable unit but optimize development.
• RSG recommends setting the fee per square foot of residential space. Per square foot in-lieu fees encourage smaller and more efficient units, while increasing density.
• RSG recommends revisiting the in-lieu fee on a periodic basis, such as every 3 to 5 years or concurrent with Housing Element updates, or if market conditions change significantly.
• The Ordinance should be updated by the City Council to include payment of an in-lieu fee as an alternative method of compliance, while the in-lieu fees should be adopted as a Resolution. This helps to streamline and separate future amendments to the fee alone without reconsidering the full Ordinance.
• The City may consider allowing payment of the in-lieu fee for developments with 10 units or less. At this level, a new development would generate an inclusionary requirement of between 0.15 and 1.5 units.
• The City may consider allowing developers planning to build more than 10 units to pay the in-lieu fee for the first 10 units. • The City may consider allowing payment of the in-lieu fee for developments greater than 10 units only if the developer provides compelling evidence (pro forma analysis) proving that on-site unit production is infeasible. Approval would be subject

26 to review by the Planning Commission (or City Council on appeal).
• The City may consider requiring applicants who opt to pay the in-lieu fee to present a public impact statement explaining why they chose to pay the fee over providing units on-site.

Inclusionary
Housing Dashboard
Government Code Section 65906.6(b) requires local agencies that collect inclusionary housing in-lieu fees to annually post the following information to its website beginning on January 1, 2026:
• The amount of inclusionary housing in-lieu fees collected in the previous year; and
• Whether the inclusionary housing in-lieu fees are intended to be used for a project, if any.

Government Code Section 65906.6(c) requires local agencies collecting inclusionary housing in-lieu fees to post the following information on its website beginning on January 1, 2026 and every five years thereafter:
• The amount of inclusionary housing in-lieu fees collected in the past five years; and
• The projects that the inclusionary housing in-lieu fees were spent on.

DRAFT
[DRAFT] Housing Asset Fund
Policy Guidebook
In Collaboration with:

DRAFT
Housing Asset Fund
Policy Guidebook

1. Introduction:............................................................................................................................................3

1.1 Housing Element Program 7:........................................................................................................... 3

2. Housing Successor Fund.......................................................................................................................4

2.1 Eligible Uses.....................................................................................................................................4 3 Housing Snapshot................................................................................................................................... 5

3.1 Summary of Housing Stock..............................................................................................................5

3.1.1 Existing Stock...................................................................................................................5

3.1.2 Recent, Active, and Prospective Development................................................................ 6

3.1.3 Preservation/At-Risk Units................................................................................................6

3.1.4 Fair Housing Requirements..............................................................................................6

3.2 Summary of Housing Needs.............................................................................................................7

3.2.1 RHNA/RHNA progress..................................................................................................... 7

3.2.2 Income level targets......................................................................................................... 7

3.2.3 Special needs targets.......................................................................................................8

3.2.4 Community Members Experiencing Homelessness.........................................................8

3.2.5 Evictions........................................................................................................................... 8

3.2.6 Rental v Ownership........................................................................................................ 11

3.2.7 Production v Preservation...............................................................................................11

3.2.8 Leveraging external resources....................................................................................... 11

3.2.9 High Resource Areas......................................................................................................11

4. Solutions................................................................................................................................................12

4.1 Active Uses.....................................................................................................................................12

4.1.1 Affordable Housing Consulting Services - Annual Renewal ($64,200 From Housing Asset Fund)................................................................................................. 12

4.1.2 Coordinated Outreach Referral & Engagement (CORE) Team: Annual Renewal ($51,137 from Housing Asset Fund)........................................................................................12

4.1.3 Fair Housing Trainings ($5,000 from General Fund, $1,000 from Housing Asset Fund)... 12 4.1.5 HomeMatch Program: Annual Renewal ($12,500 General Fund; $1,875 Housing Asset Fund)....................................................................................................................................... 13

4.1.6 Real Properties and Disposition Status............................................................ 13

4.1.7 Loans Receivable............................................................................................. 13

4.2 Prepared Initiatives.........................................................................................................................13

4.2.1 In-Lieu Fee Policy: One-off Ordinance (revenue generating).........................................14

4.2.2 Tenant Retention Program: Annual Renewal ($25,000 from Housing Asset Fund)....... 14

4.3 Emerging Initiatives........................................................................................................................ 15

4.3.1 Staffing Capacity............................................................................................................ 15

4.3.2 Downpayment Assistance Program............................................................................... 15

4.3.3 Community Land Trusts................................................................................................. 15

4.3.4 Rent Stabilization Ordinance..........................................................................................15

4.3.5 Just/Good Cause Eviction.............................................................................................. 15

4.3.6 Right to Legal Counsel................................................................................................... 16 References:................................................................................................................................ 17 2

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1. Introduction:

In compliance with Program 7 of the City of Pinole’s 2023-2031 Housing Element, the City is developing a Policy Guidebook for the City’s Housing Successor Asset Fund in collaboration with Northern California Land Trust through the Partnership for the Bay’s Future Fellowship program.

Since 1969, California has required that all local governments adequately plan to meet the housing needs of everyone in the community, at all income levels. Local governments meet this requirement by adopting housing plans as part of the general plan. Referred to as the Housing Element, this report sets forth the City’s overall housing objectives in the form of goals, policies, and programs. In order for “Housing to Meet the Needs of All Income Levels and Special Needs Groups”, Program 7 calls for the “Development of Housing Successor’s Low and Moderate Income Asset Fund Policy”. The Policy Guidebook will set priorities and goals for the use of affordable housing funds in the City’s as well as investigate the creation of an in-lieu fee as an alternative to the inclusionary housing requirement.

The City of Pinole is the Housing Successor to the former Redevelopment Agency of the City of Pinole, which was dissolved statewide in 2012. At the time of dissolution, a housing successor was to be selected to accept the transfer of and be responsible for the remaining assets and liabilities of a former redevelopment agency. Housing Asset Funds may be spent on administrative costs, homeless prevention and rapid rehousing services, Affordable housing development assisting households earning up to 80 percent of the Area Median Income.

The Partnership for the Bays Future (PBF) is a partnership between multiple organizations with the collective goal of advancing equitable, sustainable, and affordable housing solutions in the region. In 2024, the City submitted a joint application for their Housing Fellowship program with Northern California Land Trust (NCLT) and the Richmond Community Foundation (RCF). The PBF Housing Fellowship Program places fellows in local jurisdictions for two years with the goal of achieving specific housing program objectives for the jurisdiction in collaboration with the community based organizations in the joint application. In 2025, the City of Pinole was selected as one of the ten host agencies and in February, the Housing Fellow began work in collaboration with NCLT and RCF on multiple housing programs. One of the assigned projects is the development of the Housing Element Program 7 Policy Guidebook

1.1 Housing Element Program 7:
“To develop a Housing Successor’s Low and Moderate Income Housing Asset Fund Policy. The policy will set priorities and goals for the use of affordable housing funds in the City as well as investigate the creation of an in-lieu fee as an alternative to the inclusionary housing requirement. The policy guide will ensure efficient and productive use of the resources. The policy guide will consider RHNA requirements, local housing needs and demographics, and fair housing objectives, among other factors. To encourage housing mobility and choice across Pinole, the City will prioritize use of limited affordable funding to create affordable housing developments and provide ownership of housing for moderate and lower-income households in higher opportunity areas of the City, including those with healthy environment, access to transportation and resources, and higher education scores, more common in eastern Pinole. The City is also including a waiver of park impact fees for affordable units beyond the inclusionary housing requirement (per Program 8).
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“The City will continue to require 15 percent of the units located in new residential developments of four or more to be affordable, and of those units, 40 percent must be affordable to very low income households with the construction of units off-site as an alternative. The City will pursue creation of an in-lieu fee alternative for the inclusionary housing requirement to provide flexibility for smaller projects and to create a new funding source for affordable housing projects.

Implementing Agency: Community Development Department
Supporting Agency: Finance Department
Timeline: Three years after Housing Element adoption
Funding Source: Housing Successor Low and Moderate Income Housing Asset Fund; Contra Costa County, State and Federal funding programs as available.

Quantified Objective: Create a housing fund policy guide, create in-lieu fee alternative and funding source. For applicable development projects, maintain a minimum requirement of 15 percent inclusionary units, and of those 40 percent of units affordable to very low income households.

Geographic Targeting: Target 50 percent of affordable housing funding towards development of affordable housing and facilitating ownership of housing for moderate and lower-income households in higher opportunity areas.”

2. Housing Successor Fund
The City of Pinole is the housing successor to the former Redevelopment Agency of the City of Pinole, which was dissolved statewide in 2012. At the time of dissolution, a housing successor was to be selected to accept the transfer of and be responsible for the remaining assets and liabilities of a former redevelopment agency.

Upon the statewide dissolution of redevelopment in 2012, all rights, powers, committed assets, liabilities, duties, and obligations associated with the affordable housing activities of the former Agency were transferred to the Housing Successor.

A year after the dissolution of redevelopment began, the California State Legislature recognized the need to regulate and provide transparency on the use of the housing activities transferred from a former redevelopment agency. Senate Bill 341 (DeSaulnier, 2013) and subsequent legislation enacted several requirements for housing successor agencies contained in HSC Sections 34176-34176.1.In general, housing successors must comply with three major requirements pursuant to HSC Section 34176.1:

1. Housing Successor expenditures and housing production are subject to income and age targets.

2. Housing successors may not accumulate an “excess surplus,” or a high balance based on certain thresholds.

3. Properties must be developed with affordable housing or sold within five to ten years of being approved for transfer from the former redevelopment agency to the housing successor.

2.1 Eligible Uses
Pursuant to HSC Section 34176.1, Housing Asset Funds may be spent on:
1) Administrative costs for operation of the housing successor agency. The law allows a housing successor to spend the greater of:
● o $200,000 per year adjusted for inflation, or
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● o 5% of the statutory value of real property owned by that housing successor and the value of loans and grants receivable from the HAT (“Portfolio”).

HCD has annually published an adjusted limit amount for administrative costs, reflecting the change in the Consumer Price Index from the prior year. Although HCD has not yet published the update for FY 2024-25, applying the same methodology and index HCD has previously used would yield a limit adjusted for inflation for FY 2024-25 of $270,700. This is greater than the 5% portfolio value limit of $236,753, therefore this Annual Report applies the FY 2024-25 HCD limit. 2) Homeless Prevention and Rapid Rehousing Services up to $500,000 per year if the former redevelopment agency did not have any outstanding inclusionary housing or replacement housing production requirements as of 2012. Pinole is eligible for this expense because the former Agency did not have any outstanding inclusionary or replacement housing requirements upon dissolution. 3) Affordable Housing Development assisting households earning up to 80 percent of the Area Median Income (“AMI”), subject to specific income and age targets over a five-year period.

3. Housing Snapshot
Program and policy recommendations are based on the current housing context within the City of Pinole.

As this information evolves, so must the programs and policies used to support residents.

3.1 Summary of Housing Stock
Pinole's housing stock reflects a small, largely built-out Bay Area city where the pace of new development has historically sat somewhat behind regional growth. Its existing inventory is aging, owner-dominated, and heavily weighted toward single-family detached homes, with limited multifamily or rental supply. After falling short of its 5th Cycle production targets, the City entered the 2023–2031 planning period with a robust pipeline of entitled and pending projects. Since then, meaningful progress has been made: Vista Woods, the 179-unit affordable senior community, was completed in 2025 and is now accepting residents, and Valor Village, the 33-unit affordable veterans housing project by SAHA, was completed in September 2024. Several additional projects — including the 154-unit Appian Village for-sale development and the 223-unit Pinole Vista mixed-use project — remain in various stages of entitlement and construction plan check. The City continues to monitor its small inventory of affordable units for covenant compliance, and no currently assisted units are at risk of conversion during the planning period. Alongside this production and preservation work, the City is required under state law to affirmatively further fair housing — analyzing patterns of segregation, access to opportunity, and disproportionate need, and committing to programs that address identified impediments.

3.1.1 Existing Stock
Pinole's housing stock totals approximately 6,882 units, with single-family detached homes accounting for roughly 73% of all units. The stock is heavily owner-occupied: approximately 76% of households are owner-occupied, while 24% are renter-occupied — a slightly higher ownership share than noted in the Housing Element, reflecting continued stability in tenure composition. The stock remains significantly aged, with the majority of units built before 1990. The median property value in Pinole was $718,600 in 2024, up from $697,100 in 2023. The median household income in Pinole was $120,833 in 2023, meaning home prices remain well out of reach for many residents without significant equity or savings.

Median gross rent in 2024 was approximately $2,660 per month, up meaningfully from the $1,997 figure cited in the Housing Element, continuing to place pressure on cost-burdened renters. 5

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3.1.2 Recent, Active, and Prospective Development
There are 659 pending or entitled units in the development pipeline counting toward Pinole's 6th Cycle RHNA obligations, and two of the five major projects originally listed in the Housing Element have now been completed. Vista Woods, the 179-unit 100% affordable senior community, was completed in 2025 and is currently leasing. Valor Village, the 33-unit affordable veterans housing project by SAHA at 811 San Pablo Avenue, was completed in September 2024, earning a 2025 PCBC Golden Nugget Award of Merit for Best Affordable Housing Community. Of the remaining pipeline projects, Appian Village at 2151 Appian Way received unanimous Planning Commission approval of its final entitlements in April 2025; the City's project page lists it as "Nearing Completion and Under Construction" as of mid-2025, with developer DeNova Homes actively marketing units for sale. The BCRE Mixed-Use project at 2801 Pinole Valley Road (29 units) and the Pinole Vista development at 1500 Fitzgerald Drive (223 units) both remain in the entitlements approved/construction plan check phase. The City continues to project ADU production of approximately three permits per year toward its RHNA, and all deed-restricted affordable units carry 55-year covenants from certificate of occupancy.

Pinole has constructed 339 new housing units from 2021-2025. This is an increase of about 5% of the existing housing stock as of 2021 (which was 7,169 units). Out of 339 new units, Pinole has constructed 262 affordable (very-low to moderate) units since 2021. The City is 38% through the 6th RHNA cycle and has attained 20% of overall RHNA targets to date. Of the RHNA targets, the City has attained 24% of Very Low Income total, 17% Low income, 9% Moderate and 23% Above Moderate. This is an overall 20% attainment to date, however, does not include units under construction or that have received a certificate of occupancy. In addition, the City has a major condo project under construction (Appian Village) not included in this total. When finished this project alone will boost the City to over 51% overall attainment of 6th cycle RHNA. The first Phase of construction will be sold this summer, with the remaining units developed in additional phases.

3.1.3 Preservation/At-Risk Units
The preservation picture in Pinole remains relatively stable since the Housing Element was adopted. The City's inventory of monitored rent-restricted affordable units includes Pinole Grove Senior Housing (69 units), East Bluff (144 units), Westmont of Pinole (37 restricted senior beds), Fernandez Corner (16 restricted units), and Alvarez Court (19 special needs units), among others. Vista Woods Senior Apartments (179 units) and Valor Village/SAHA (32 units) are now leasing as newly completed properties, adding substantially to the deed-restricted inventory. The 37 restricted senior beds at Westmont of Pinole remain the only units identified in the Housing Element as approaching covenant expiration, with restrictions phasing out through December 2028. No other currently assisted units have been identified as at risk of conversion during the 6th Cycle planning period. The City's Low- and Moderate-Income Housing Asset Fund continues to serve as the primary local financing vehicle for preservation activity and compliance monitoring.

3.1.4 Fair Housing Requirements
Under Assembly Bill 686, the City is required to include an Affirmatively Furthering Fair Housing (AFFH) analysis that examines contributing factors to fair housing issues and commits to meaningful action. For Pinole, this analysis covers fair housing enforcement, integration and segregation patterns, racially and ethnically concentrated areas of poverty and affluence (R/ECAPs and RCAAs), disparities in access to opportunity by census tract, disproportionate housing needs, and the relationship between RHNA site locations and fair housing outcomes. Pinole has a moderate dissimilarity index of 31.86 (just above the low-segregation threshold of 30.0), well below the County's 47.32. There are no R/ECAPs or RCAAs 6

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within Pinole or in its immediate vicinity. Fair housing services are primarily provided through ECHO Housing and Bay Area Legal Aid. The City adheres to all applicable state and federal fair housing laws and has included programs (notably Programs 11, 19, and 21) aimed at affirmative marketing, place-based improvements in low-resource areas, and coordination with a fair housing service provider on tenant protections.

3.2 Summary of Housing Needs
Pinole faces housing needs in terms of producing more units, but also in terms of protecting current and prospective residents’ access to quality and affordable housing. On the production side, the City must plan for 500 new units across five income levels through 2031. Pinole's Housing Element has been certified by the California Department of Housing and Community Development for the current 2023–2031 planning cycle, and Pinole is among a small number of Bay Area jurisdictions whose pipeline projects alone are sufficient to meet lower-income RHNA targets. On the protection side, rising home values and rents have created widespread cost burden, particularly for renters and lower-income households, while several vulnerable populations, including seniors, persons with disabilities, large households, and individuals experiencing homelessness or housing precarity, face compounding barriers to finding stable, affordable housing. Understanding where production is needed most, what protections and resources are available, and how Pinole's neighborhoods compare on access to opportunity are all central to addressing these needs.

3.2.1 RHNA/RHNA progress
Pinole's 6th Cycle RHNA (2023–2031) remains 500 units, allocated across five income categories: 60 extremely low income (0–30% AMI), 61 very low income (30–50%), 69 low income (50–80%), 87 moderate income (80–120%), and 223 above moderate income (>120%). As of the most recent reporting period, Pinole has issued permits for 24% of its very low-income RHNA target and 17.4% of its low-income RHNA target. Notably, both Vista Woods (179 units, completed 2025) and Valor Village (33 units, completed 2024) are deed-restricted affordable units that contribute directly to lower-income RHNA credit. Pinole is among a small group of Bay Area jurisdictions whose pipeline projects alone are sufficient to meet lower-income RHNA targets. The three remaining pipeline projects — Appian Village, BCRE, and Pinole Vista — carry the bulk of moderate and above-moderate RHNA credit and are advancing through construction plan check and early construction phases.

3.2.2 Income level targets
The RHNA income band structure and affordability thresholds remain the governing framework, with income limits updated annually by HCD. As of June 2025, Contra Costa County's median family income is $159,800 for a four-person household. Extremely low-income households (30% AMI) earn up to $47,950; very low-income households (50% AMI) up to $79,900; low-income households (80% AMI) up to $125,050; and median-income households earn up to $159,800. These figures represent a substantial increase from the 2021 AMI of $125,600 cited in the Housing Element, reflecting continued wage and income growth in the Bay Area — though home prices and rents have risen commensurately, meaning affordability pressures for lower-income households remain acute. Citywide, 53% of households are rent-burdened, spending more than 30% of income on housing costs. Cost burden continues to fall most heavily on the lowest-income renters, with the gap between incomes and market rents having widened over the years.
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3.2.3 Special needs targets
The special needs populations identified in the Housing Element are seniors 65+, persons with disabilities, large households, female-headed households, and extremely low-income households These populations continue to represent the core of Pinole's underserved housing demand. The completion of Vista Woods (179 units restricted to seniors 62+) and Valor Village (33 units restricted to veterans) represents meaningful progress on two of these populations. The median household income in Pinole was $120,833 in 2023, reflecting overall household prosperity, but masking the acute need among the roughly 8% of households at extremely low income levels.

3.2.4 Community Members Experiencing Homelessness
The countywide homelessness picture has improved since the Housing Element was written. The 2025 Point-in-Time Count identified 2,118 people experiencing homelessness across Contra Costa County which constitutes a 26% reduction from 2024. The county also reported a 34% increase in temporary and permanent housing beds since 2023. City-level PIT data for Pinole is not published separately, but West County's strong overall decline suggests conditions in Pinole have similarly improved. The completion of Valor Village, providing 33 permanent affordable units for veterans, directly addresses one precarious population.

In July of 2025, as part of the Housing Successor Funds eligible use category “Homeless Prevention and Rapid Rehousing Services”, the Community Development Department contracted with Contra Costa Health’s Coordinated Outreach Referral and Engagement (CORE) program to support residents experiencing or at risk of experiencing homelessness (see Section 4.1.1). In addition to supporting residents, this has provided substantially improved data on these community members. Over the course of the ‘25-’26 fiscal year, the CORE program engaged with 44 unduplicated community members experiencing homelessness in Pinole. 84% of the community members engaged had roots in Pinole, 75% reported a disabling condition, and 68% reported being ‘first time homeless’.

3.2.5 Evictions
Pinole does not have a local rent control or just-cause-eviction ordinance, and no city-specific eviction filing data has been published since the Housing Element was adopted. Statewide tenant protections under AB 1482 (the California Tenant Protection Act) continue to apply to most multifamily rental units in Pinole, capping annual rent increases at 5% plus local CPI. The current maximum allowable annual increase for units subject to AB 1482 is 8.8% (5% plus 3.8% CPI), effective through July 2027. The COVID-era countywide eviction moratorium, which expired in September 2021, has not been renewed.

Fair housing inquiries and formal complaints remain the primary mechanism through which eviction-related discrimination is tracked; ECHO Housing and Bay Area Legal Aid continue to provide tenant assistance countywide.

Based on the available data provided by the Contra Costa Sheriff Department and the Bay Area Housing Finance Authority’s (BAHFA) Eviction Study, Contra Costa County (CCC) has the second highest eviction rate in the Bay Area nine counties and Pinole has the 4th highest eviction rate in the county on average over the last five years. From January 2025 to May 2026, Pinole has had the 5th highest eviction rate in Contra Costa County. Graphs and maps below map these findings. BAHFA attributes these trends to demographic shifts in the region. As folks have been priced out of the major metropolitan areas, demand for rental units has increased in Solano and Contra Costa counties – regions with far fewer rental protections established. Better understanding these patterns will be integral in creating impactful housing policies.These trends should be of additional importance to the City when considering that BAHFA’s 8

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Table 1: Sheriff Lockout order rate by City and County. Lockout data provided by Contra Costa Sheriff; Rental Stock data provided by PropertyRadar 05/02/2025 pull.

Table 2: Total Sheriff Lockouts by City and County. Lockout data provided by Contra Costa Sheriff. 9

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report also found that “renters in census tracts with majority renters of color were 78% more likely to experience a sheriff lockout than those in white-majority renter census tracts”.

While Pinole specific data is not available, BAHFA found that the most common reason for at-fault evictions is failure to pay rent. This highlights the value of City support programs for both renters and rental property operators, as evictions hurt both groups.

3.2.6 Rental v Ownership
Pinole's tenure split continues to lean heavily toward ownership. Approximately 76% of households are owner-occupied and 24% are renter-occupied, which represents a slightly higher ownership share than the 70/30 split cited in the Housing Element, possibly reflecting new for-sale units coming online and some loss of rental stock. The median property value reached $718,600 in 2024, and average rents have risen to approximately $2,339/month — both well above what lower-income households can afford without subsidy. The for-sale focus of Appian Village (154 units) and the rental nature of Vista Woods, Valor Village, and Pinole Vista (223 units) means the pipeline is reasonably balanced between tenure types, though the majority of pipeline affordable units are rentals.

3.2.7 Production v Preservation
With two major affordable projects now completed and three more in the pipeline, Pinole's current cycle strategy continues to prioritize new production. The addition of 212 new deed-restricted affordable units through Vista Woods and Valor Village alone represents more affordable housing production than the City achieved in the entire prior 8-year cycle. Preservation activity remains focused on compliance monitoring of existing restricted properties, supporting lower-income home owners, and the potential deployment of Housing Asset Fund resources for acquisition-rehabilitation.

3.2.8 Leveraging external resources
Pinole continues to access external housing resources through its participation in the Contra Costa Urban County CDBG and HOME programs. Contra Costa County is actively soliciting proposals for FY 2025/26 CDBG, HOME, Measure X Housing, and other housing development funds, all of which Pinole-based developers and nonprofits remain eligible to access. The ADU Grant Program (up to $40,000 per ADU) and CalHFA Multifamily Programs remain active state tools. The City was also awarded a Pro-Housing Initiative Program (PIP) of $650,000 and was able to use its Housing Successor Fund as a matching resource to unlock $1.3 million in investment dollars. The City has also been awarded the Partnership for the Bay’s Future Fellowship program capacity grant. This has provided the City with a full time policy fellow for 2025 and 2026 calendar year.

3.2.9 High Resource Areas
No changes to Pinole's TCAC/HCD opportunity area designations have been identified since the Housing Element was adopted. Pinole continues to fall entirely within Low or Moderate Opportunity categories under TCAC methodology, with no census tracts reaching High or Highest Resource designation.

Economic scores are stronger in the eastern, single-family portions of the City; education scores are weakest in the southwest; and environmental scores decline toward the north due to Interstate 80 proximity and industrial uses. Growth is being concentrated along the Three Corridors Specific Plan area (San Pablo Avenue, Pinole Valley Road, and Appian Way), where investment is intended to improve resource access in currently low-resource census tracts. 11

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4. Solutions

4.1 Active Uses
These are policy or program initiatives that the City of Pinole have passed or otherwise initiated under the scope of the Policy Guidebook and/or funded through the Housing Successor Fund.

4.1.1 Affordable Housing Consulting Services - Annual Renewal ($64,200 From Housing Asset Fund)
The City of Pinole contracts with RSG, Inc. to provide comprehensive affordable housing consulting services that support ongoing program compliance and implementation. These services include annual monitoring of 21 affordable housing properties with 433 income‑restricted units, preparation of the Housing Successor Agency Annual Report, and general advisory support on the use of Housing Successor Funds. RSG also assists with resale and refinance review for affordable ownership units and develops public‑facing educational materials as needed. This contract ensures that the City maintains compliance with State regulatory requirements and preserves the long‑term integrity of its affordable housing portfolio.

4.1.2 Coordinated Outreach Referral & Engagement (CORE) Team: Annual Renewal ($51,137 from Housing Asset Fund)
The Affordable Housing Division of the Pinole Community Development Department has contracted a dedicated CORE outreach team shared between the Cities of Pinole, Hercules, El Cerrito and San Pablo using the Housing Successor Funds. This team “works to engage and stabilize homeless individuals living outside through consistent outreach to facilitate and/or deliver health and basic need services and secure permanent housing. CORE teams serve as an entry point into Contra Costa's coordinated entry system for unsheltered persons and work to locate, engage, stabilize and house chronically homeless individuals and families. The outreach teams identify individuals living on the streets, assess their housing and service needs, and facilitate connection to shelter and services.” This contract renews annually and can have a lasting positive impact on Pinole residents.

4.1.3 Fair Housing Trainings ($5,000 from General Fund, $1,000 from Housing Asset Fund)
In July 2026, the City of Pinole will recruit a Fair Housing Intern to partner with the Northern California Land Trust (NCLT) in the development and facilitation of training seminars on Fair Housing Law. These trainings will provide information to tenants and landlords on rental housing issues such as evictions, rent increases, repairs and habitability, harassment, illegal entry, and other rights and responsibilities regarding the tenant/landlord relationship. In addition to the training, there will be an opportunity to connect residents to nonprofits such as the Eden Council for Hope and Opportunity (ECHO) who work to end discrimination in housing by providing counseling, investigation, mediation, enforcement, and education. The Counselors conduct investigations and enforcement in response to reports of housing discrimination complaints. ECHO also provides first-time homebuyer counseling and education, home seeking counseling, rent review and relocation programs, rental assistance programs and tenant/landlord services. Future explicit collaborations with this organization are worth exploring.

A portion of the A portion of the Housing Asset Fund will be used to facilitate the Fair Housing Summer Intern.The remaining costs of the intern were allocated in the approved 26-27 FY balanced CDD budget. 12

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4.1.5 HomeMatch Program: Annual Renewal ($12,500 General Fund; $1,875 Housing Asset Fund)
The City of Pinole partners with Front Porch Communities and Services to administer the Home Match Program, which connects community members seeking housing with older adults who have extra space in their homes. By creating personalized matches supported by program staff, the program expands affordable housing options at the local level while also reducing isolation and increasing housing stability for participating residents. Under the multi‑year consulting agreement, the City funds up to $25,000 annually to support program delivery and associated administrative actions. For FY 2026/27, the General Fund contribution is $12,500, supplemented by $1,875 from the Housing Successor Fund (15% of the total). This continued support allows the City to maintain a community‑centered, affordability‑focused resource that benefits both homeowners and renters.

4.1.6 Real Properties and Disposition Status
The Housing Successor oversees several real properties transferred from the former Redevelopment Agency and continues to manage them in accordance with legal requirements and long‑standing land use obligations. The Pinole Grove Senior Housing vacant parcel on Samuel Street is contractually required to remain undeveloped open space and, due to its steep topography, has no disposition potential. The Faria House parcel at 2100 San Pablo Avenue remains active park land, with the historic home currently listed for sale; should the site not be developed with affordable housing, any land‑related proceeds will be deposited into the Housing Asset Fund to support future affordability efforts. The Housing Successor has fulfilled disposition requirements for two additional sites: the Collins House property at 612 Tennent Avenue, rehabilitated into a fourplex with one affordable unit, and the 811 San Pablo Avenue parcel, which was conveyed under a Development and Disposition Agreement and successfully developed by SAHA into 33 affordable units, including homes prioritized for veterans. Collectively, the management and disposition of these properties ensure compliance with State housing successor laws while advancing the City’s long‑term affordable housing goals

4.1.7 Loans Receivable
As of FY 2024/25, the Housing Successor administers a portfolio of long‑term loans that support affordable housing development and homeownership opportunities within the community. Through FY24/25 the Housing Asset Fund held $4,380,000 in developer notes, representing four loans originally issued to affordable housing developers; these loans are repaid from residual receipts when properties generate sufficient annual cash flow. An allowance for uncollectable notes is applied to three of the four loans to account for the possibility of non‑repayment, consistent with standard accounting practice. The portfolio also includes $259,552 in outstanding first‑time homebuyer and housing rehabilitation loans with maturity dates extending through 2099, offering continued affordability support for Pinole households.

Collectively, these loan assets function as a long‑term reinvestment tool that strengthens the City’s ability to preserve and expand affordable housing

4.2 Prepared Initiatives
These are policies and programs that have been developed by City Staff based on existing council input, strong initial resident support, or Housing Element direction. Upon Council approval, City staff can present Council Resolutions to launch the policies and programs in this section. 13

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4.2.1 In-Lieu Fee Policy: One-off Ordinance (revenue generating) The purpose of an in-lieu fee is to provide property developers with an alternative option to the City's on-site affordable housing requirement. Program 7 of the Housing element requires the City “pursue [the] creation of an in-lieu fee alternative for the inclusionary housing requirement to provide flexibility for smaller projects and to create a new funding source for affordable housing projects”. Currently, the City requires all new residential developments of four or more units to price at least 15% of available units as affordable, with 40% of the affordable rental units reserved for deeply affordable units (PMC 17.32.020).

An In Lieu fee would be paid 'in-lieu' of developing those affordable units and is generally intended to cover the cost it would take to develop those units elsewhere. The goal of these fees are to be not so high that it halts development or so low that it doesn't adequately fund alternative affordable housing development.

In 2025, the City of Pinole commissioned a report on the feasibility of an in-lieu fee for the City’s Inclusionary Housing Policy. To evaluate the feasibility of an in-lieu fee, the City’s housing policy consultant firm RSG conducted a financial analysis of six different prototypical residential developments in Pinole. The analysis found that fees $9 to $25 per square foot for ownership style housing development, and $12 to $49 per square foot rental housing development were the feasible range of possible fees. This would mean that any fee higher than the proposed amounts would create too high a cost burden on development projects and render the programs no longer financially viable.

Because the maximum feasible fee would not adequately cover the cost of developing a comparable number of affordable housing units, City staff does not recommend moving forward with the development of an In-Lieu Fee for larger developments. However, following Planning Commission input, City Staff commissioned a report on the feasibility of replacing the under 4-unit exemption with an Under 10 Unit In Lieu Fee. This would better support “missing middle” development while also subsidizing the per-unit cost with In-Lieu fees generated from one and two unit developments.

Following Council approval of this guidebook. City staff can begin finalizing ordinances and resolutions to transition from the Under 4-unit exemption to the Under 10-Unit In Lieu Fee model.

4.2.2 Tenant Retention Program: Annual Renewal ($25,000 from Housing Asset Fund) The Tenant Retention Program would reserve funds from the Housing Successor Fund, dedicated for Pinole renters in need of financial assistance to maintain their housing. Modeled after other local tenant retention programs and emergency rental assistance programs (ERAP), this program’s eligibility criteria will prioritize residents that are at urgent risk of losing housing.

If the City pursues this type of program, the Policy Guidebook will recommend creating a Pinole set-aside fund within the Contra Costa County Housing Security Fund. The City of El Cerrito contributes an annual set-aside contribution to the County Housing Security Fund, which can be used to support tenants retain housing. The fund is flexible; it can be used for rent owed, or additional barriers to retaining housing such as bills, license renewal, medical costs. Applicants must demonstrate they will be able to retain their housing following the support, and each disbursement is approved by City Staff. The El Cerrito set-aside fund approves 6-8 applicants annually with an average disbursement of $2500. Similarly, the City of Richmond is also transitioning to this model of Tenant Retention Program.

Based on Pinole’s size, number of first-time homeless contacts made by the CORE team, and local and federal housing support trends, Contra Costa County Staff recommend an initial $25,000 contribution that can be assessed and renewed annually.
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Following Council approval of this guidebook. City staff can add a contract adjustment to the City Council Consent Calendar which will establish the Pinole Housing Trust Fund Set-Aside.

4.3 Emerging Initiatives
These are policies and programs that are recommended based on existing council input, strong resident support, or Housing Element direction.

4.3.1 Staffing Capacity
Adjusted for inflation, the City is permitted to spend $280,000 annually on the administrative costs related to pursuing the goals of the Housing Successor Fund. Historically this has been used to supplement existing staff capacities or commission consultant reports at an ad hoc capacity. Moving forward, this report recommends that the city establish a designated Housing Successor Fund management role that can capitalize this valuable resource and oversee its equitable and sustainable disbursement.

4.3.2 Downpayment Assistance Program
Down payment assistance programs can assist eligible first-time homebuyers with purchasing a home in Pinole. To serve as an example, the state CalHome program offers 30-year deferred loans of up to $200,000 at 3% simple interest per household. In the last year, NCLT has aided six first time homebuyers in securing a down payment assistance loan, totaling over one million dollars in below market-rate loans.

Down payment assistance programs like CalHome are crucial for increasing the purchasing power of low-income households amidst the highly competitive housing market. It has quickly become one of the most high-demand programs that NCLT offers, with over twelve households in the application pipeline.

4.3.3 Community Land Trusts
Under the CLT model, nonprofits can acquire, maintain, and permanently own the land underneath housing, insulating housing stock from the impacts of market speculation and ensuring long-term affordability of housing. Within the state’s Community Land Trust Network (CACLTN), there are at least fifty CLTs with a combined portfolio of 1,700 permanently affordable housing units.

A local example lies in Richmond LAND, an emerging Richmond-based CLT founded in 2020 with the mission of supporting community-controlled land. In addition to spearheading shared-equity housing projects in Richmond, the organization has also collaborated with the City of Richmond to create an Equitable Public Land Disposition Policy, allowing innovative community ownership models to be used to develop publicly-owned land.

4.3.4 Rent Stabilization Ordinance
A rent stabilization ordinance would implement limits on rent increases, only allowing for gradual and percentage-based increases. It would also aim to protect tenants from unaffordable rent increases.

Currently, the city of Pinole has no local rent control or rent stabilization ordinance. Statewide tenant protections under AB 1482 (the California Tenant Protection Act) continue to apply to most multifamily rental units in Pinole, capping annual rent increases at 5% plus local CPI. The current maximum allowable annual increase for units subject to AB 1482 is 8.8% (5% plus 3.8% CPI), effective through July 2027.
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Although often associated with larger municipalities like San Francisco and Oakland, smaller cities in the Bay Area such as Hayward, Half Moon Bay, and East Palo Alto have implemented rent stabilization programs as well. Currently, the City of Pinole does not have adequate data to determine the necessity and impact of a rest stabilization ordinance.

4.3.5 Just/Good Cause Eviction
Just Cause Eviction laws require landlords to provide a valid legal reason before evicting a tenant, preventing arbitrary or retaliatory evictions. Most cities in Contra Costa County defer to the state’s “Tenant Protection Act of 2019” (AB 1482), which applies to renters who have resided in their units for 12 months or more, and differentiates at-fault from no-fault evictions. Common examples of justified, or at-fault, evictions include failure to pay rent, violation of lease provision, criminal activity, or property disturbance.

The City of Oakland has developed their city’s own Just Cause Eviction law, which offers more stringent protections for tenants. The city’s policy covers all rental units built at least ten years ago, as opposed to the state policy’s 15-year exemption on units. Oakland’s law also requires relocation assistance provided by the landlord in the case of no-fault evictions, and prohibits no-fault evictions of teachers or students during the school year. As eviction rates continue to soar, tenant protections like these are increasingly crucial to housing equity.

4.3.6 Right to Legal Counsel
Right to Legal Counsel provides access to free or low-cost legal representation for tenants facing eviction - proven to dramatically reduce displacement rates. According to the ACLU, around 90% of landlords will have legal representation in U.S. eviction cases, compared to fewer than 10% of tenants having counsel.

To aid this issue, East Bay Area Cities and Counties often collaborate with local legal counsel organizations, including East Bay Community Law Center and Bay Area Legal Aid. San Francisco has also developed its own taxpayer-funded Eviction Defense Collaborative, which offers full-scope, and free, legal services to over 5,000 tenants facing eviction each year. 16

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References:

Baker International, Michael, and Daniel K Wery. Pinole, CA, 2023, City of Pinole Housing Element 2023-2031,
https://www.pinole.gov/wp-content/uploads/2024/07/PinoleHEU_Compliant_Clean-1.pdf. Accessed 2026.

Blount, Casey, et al. “Silhouette of Cityscape Redevelopment Agencies in California:” US Department of Housing and Urban Development, Jan. 2014,
www.huduser.gov/portal/publications/redevelopment_whitepaper.pdf. Accessed 30 June 2026. “CalHOME Program | California Department of Housing and Community Development.” Hcd.ca.Gov, California Department of Housing and Community Development, www.hcd.ca.gov/funding/calhome. Accessed 30 June 2026.

California Assembly Bill No. 1482, 2019-2020 Reg. Sess. (2019) https://leginfo.legislature.ca.gov/faces/billTextClient.xhtml?bill_id=201920200AB1482. Accessed 30 June 2026.
“Eden Council for Hope and Opportunity - Home.” Eden Council for Hope and Opportunity, www.echofairhousing.org/. Accessed 30 June 2026.
“Home Match – Front Porch.” FrontPorch, frontporch.net/live/home-match/. Accessed 30 June 2026. “Housing Security Fund.” Contra Costa Health,
www.cchealth.org/services-and-programs/homeless-services/how-to-help/donate/housing-securityfund. Accessed 30 June 2026. “Housing Successor Annual Report; City of Pinole; Fiscal Year 2024-2025.” Pinole.Gov, City of Pinole, Mar. 2026,
www.pinole.gov/wp-content/uploads/2026/02/Pinole-2024-25-HSA-Annual-Report_Final.pdf.

Accessed 30 June 2026.
“Just Cause for Eviction Ordinance.” City of Oakland,
www.oaklandca.gov/Community/Housing-Programs-Support/Evictions-and-Tenant-Rights/Managin g-Evictions-For-Landlords/Read-the-Just-Cause-for-Eviction-Ordinance. Accessed 30 June 2026. “Legal Assistance for Tenants | Eviction Defense Collaborative.” Eviction Defense, evictiondefense.org/legal-assistance-services/. Accessed 30 June 2026. “No Eviction without Representation | American Civil Liberties Union.” ACLU.Org, American Civil Liberties Union, May 2022, www.aclu.org/publications/no-eviction-without-representation. Accessed 30 June 2026.
“Northern California Land Trust — About.” Nclt.Org, Northern California Land Trust, www.nclt.org/about.

Accessed 30 June 2026.
“Redevelopment Agency Dissolution .” Department of Finance, California Department of Finance, dof.ca.gov/programs/redevelopment/. Accessed 30 June 2026. 17

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“Redevelopment Agency History.” Auditor Controller - Los Angeles County, County of Los Angeles, 2017, auditor.lacounty.gov/redevelopment-agency-history/. Accessed 30 June 2026. “Richmond Land.” RichmondLand.Org, Richmond Land, www.richmondland.org/. Accessed 30 June 2026.

Robbins, Jenny, and Shelby Ferguson. “Coordinated Outreach Referral and Engagement (CORE): Fiscal Year 2025-2026 Update - Pinole City Council.” Civic Clerk Agenda Minutes, 7 Apr. 2026, pinoleca.portal.civicclerk.com/. Accessed 30 June 2026.

Saver, Daniel. “Bay Area Eviction Study | Metropolitan Transportation Commission.” Metropolitan Transit Commission, Bay Area Housing Finance Authority, July 2025, mtc.ca.gov/about-mtc/authorities/bay-area-housing-finance-authority/bahfa-programs/bay-area-evi ction-study. Accessed 30 June 2026.
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