June 21, 2022
Community Development
DATE: June 21, 2022
TO: Mayor Butt and Members of the City Council
FROM:
Lina Velasco, Director of Community Development
Subject:
Resolution approving the Guidelines for Implementation of the Inclusionary Housing and Affordable Housing
Linkage Fee Ordinance
FINANCIAL IMPACT: There is no direct financial impact to the City’s General Fund from adoption of the proposed Guidelines.
PREVIOUS COUNCIL
ACTION:
In 2020, the City Council adopted Ordinance No. 24-20 to update the City’s inclusionary housing requirements and established a new commercial linkage fee. Resolution
No. 115-20 adopted inclusionary housing in-lieu fees for residential developments and non-residential linkage fees for non-residential developments.
STATEMENT OF THE
ISSUE:
Richmond Municipal Code Section 15.04.603.150
authorizes adoption of guidelines for the implementation of the Inclusionary Housing and Affordable Housing
Linkage Fee. Guidelines have been prepared for
consideration by the City Council.
RECOMMENDED ACTION:
ADOPT a resolution approving the guidelines for
implementation of the Inclusionary Housing and
Affordable Housing Linkage Fee Ordinance – Community
Development (Lina Velasco 510-620-6705).
AGENDA
REPORT
June 21, 2022
DISCUSSION:
The City Council adopted the Inclusionary Housing and Affordable Housing Linkage Fee Ordinance (“IH/AHLF Ordinance”) on November 10, 2020 (see Attachment 2). The IH/AHLF Ordinance updated the City’s existing inclusionary program and established a new commercial linkage fee. Fees were adopted and set by Resolution No. 115-20 (see Attachment 3). Richmond Municipal Code Section 15.04.603.150 provides for adoption of guidelines by the City Council to support implementation. These guidelines have now been prepared for consideration by the City Council.
The proposed Guidelines for Implementation of the Inclusionary Housing and Affordable Housing Linkage Fee Ordinance (“Guidelines”) specify implementation details for the program, including the following:
1) Affordable Housing Plan – New residential development projects must submit an Affordable Housing Plan to specify how the proposed project will comply with the IH/AHLF Ordinance. The Guidelines outline information that must be included with the Affordable Housing Plan submission to support the City’s review and approval. Requirements vary depending on the selected compliance option (on- site inclusionary units, off-site inclusionary units, property dedication, in-lieu fee).
2) Standards for Inclusionary Units – The Guidelines establish minimum standards for inclusionary units such as minimum unit sizes, required kitchen features, closets, laundry facilities, and access to the same amenities as market rate units.
3) Conditions for Off-site Inclusionary Units – The Guidelines establish conditions to help ensure a developer proposing off-site inclusionary units has a viable plan for development of the units. The ordinance requires off-site units be within one mile of the market rate project. The Guidelines further provide off-site units be in the same census tract as the market rate project, or if in a different census tract, one where median income is at least 80 percent (80%) of the market rate development census tract. This adds an objective criterion implementing the ordinance requirement that off-site units not cause concentrations of poverty.
4) Conditions for Property Dedication – The Guidelines include conditions for property dedication to help ensure the property is suitable for development of at least 10 percent (10%) more affordable housing units than otherwise required on- site.
5) Qualifying for Inclusionary Units – The Guidelines specify how household income is to be determined for purposes of qualifying for an inclusionary unit and how assets are taken into consideration. Minimum household sizes are included to ensure a match to an appropriate-sized unit.
June 21, 2022
6) Calculating Affordable Sales Prices – The Guidelines specify details regarding how affordable sales prices and re-sale prices for inclusionary units are to be calculated. Criteria for loans and the method for taking capital improvements into consideration as part of the resale price are defined. Inclusionary unit owners may sell the unit for the greater of: a) the calculated affordable price at the time of resale or b) their original cost of purchasing the unit adjusted for inflation, plus improvements made to the unit, plus seller paid commission or cost of sale. If there is damage to the unit at the time of sale, the cost of repairs may be deducted from the resale price. The approach balances the need to preserve affordability while allowing owners an ability to recover funds invested into the unit.
7) Requirements for Owners and Property Managers – inclusionary units must be used as a primary residence. Owners must provide an annual certification that they are occupying the unit as a primary residence. Property managers for rental inclusionary units must provide tenant income certifications, rent rolls for the property, and certify that tenants meet income requirements for occupancy of the units.
The Guidelines are consistent with existing ordinance requirements and provide that the adopted ordinance and resolution prevail if any conflict is identified. It is expected that the Guidelines will be amended from time-to-time, as necessary with Council approval.
If adopted, the Guidelines will serve as a reference for staff, developers, property managers, and owners of inclusionary units and will help provide consistency from project-to-project and over time.
CONCLUSION:
City staff recommends the City Council adopt the proposed resolution in Attachment 1 adopting the Guidelines for Implementation of the Inclusionary Housing and Affordable Housing Linkage Fee Ordinance, included as Exhibit A.
DOCUMENTS ATTACHED:
Attachment 1 – Draft Resolution adopting Guidelines
Exhibit A: Guidelines for Implementation of the Inclusionary Housing and Affordable Housing Linkage Fee Ordinance.
Attachment 2 – Ordinance No. 24-20
Attachment 3 – Resolution No. 115-20