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1 City Manager’s Office
Community & Economic Development Department
City Council
April 11, 2023
INCLUSIONARY HOUSING
WORKSHOP
RiversideCA.gov
2 WHAT IS AFFORDABLE AND TO WHOM?
• If you spend no more than 30% of your gross income on your housing (rent, mortgage, taxes, utilities, etc.), you can afford your housing.
• Income limits are set by Federal and State standards, based on Area Median Income (typically by county).
INCOME LIMIT INCOME
Very Low (50% AMI) $44,000
Low (80% AMI) $70,400
Moderate (120% AMI) $104,900
RIVERSIDE COUNTY, 2022:
$87,400/year (family of 4)
PURPOSE AND BACKGROUND
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3 WHY DOES THIS MATTER NOW?
INCOME LIMIT INCOME AFFORDABLE HOUSING COST
Very Low (50% AMI) $44,000 $1,100/month
Low (80% AMI) $70,400 $1,760/month
Moderate (120% AMI) $104,900 $2,622/month
Source: Rent.com Last updated: 3/27/2023
Source: RocketHomes Last updated: 02/2023
PURPOSE AND BACKGROUND
APARTMENT
TYPE
AVERAGE
RENT
ANNUAL
CHANGE
Studio $1,705 +13%
1 Bed $1,945 +9%
2 Beds $2,245 +9%
RiversideCA.gov
4 PURPOSE AND BACKGROUND
Federal
Grants and
funding
allocations
Tax credits
Vouchers and
assistance
programs
State
Grants and funding
allocations
Tax credits
RHNA allocation
Surplus Land Act
State-owned property
Density bonus
SB 35 streamlining
Housing Accountability
and Housing Crisis Acts
Local
RHNA sites inventory
City-owned property
Housing Authority
financing
Zoning and General
Plan
Assistance programs
RIVERSIDE’S HOUSING AFFORDABILITY TOOLBOX
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5 PURPOSE AND BACKGROUND
CURRENT HOUSING PRODUCTION PIPELINE
54 21
3 2
PROJECTS
Proposed
Conceptual
Proposed - Affordable
Conceptual - Affordable
3663
1411
243 297
UNITS
Proposed
Conceptual
Proposed - Affordable
Conceptual - Affordable
4,8616th Cycle RHNA
TOTAL
3,064 3,139 7,394
18,458
Very Low Low Moderate Above Moderate
RiversideCA.gov
6 PURPOSE AND BACKGROUND
Federal
Grants and
funding
allocations
Tax credits
Vouchers and
assistance
programs
State
Grants and funding
allocations
Tax credits
RHNA allocation
Surplus Land Act
State-owned
property
Density bonus
SB 35 streamlining
Housing
Accountability and
Housing Crisis Acts
Local
RHNA sites inventory
City-owned property
Housing Authority
financing
Zoning and General
Plan
Assistance programs
Inclusionary Housing
Inclusionary
Housing
Local policy that
requires new housing
development to
include affordable
units. Often includes
options for meeting
requirements off-site or
by paying a fee.
HOUSING AFFORDABILITY TOOLBOX
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7 PURPOSE AND BACKGROUND
Inclusionary programs exist in:
• 1,000+ jurisdictions nationwide
• 158 cities and counties in California
• Produce about 110,000 affordable units
Source: Grounded Solutions Network Last updated: 3/27/2023 OR
RiversideCA.gov
8 PURPOSE AND BACKGROUND
July 27, 2020
Housing &
Homelessness
Committee (HHC)
Inclusionary
Housing
overview
Sept. 15, 2020
City Council
IH Feasibility
Study RFP
HHC Inclusionary
Housing Updates
March 22, 2021
Sept. 27,2021
Feb. 28, 2022
May 23, 2022
Nov. 12, 2020
City Council
Award feasibility
bid to EPS
Aug. 18, 2022
Planning
Commission
Draft Ordinance
amendments
Planning
Commission
Workshops
Oct. 13, 2022
Nov. 10, 2022
Oct. 24, 2022
HHC
Inclusionary
Housing Update –
Final Direction
TODAY
April 11, 2023
City Council
Workshop
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9 COMMUNITY/STAKEHOLDER OUTREACH
• Two stakeholder workshops in November 2021
• Workshop #1 included housing advocates and developers of affordable housing projects. Seven stakeholders attended the meeting.
• Workshop #2 included developers of market-rate residential projects. Sixteen stakeholders attended the meeting.
• Presented to the Greater Riverside Chamber of Commerce’s Economic Development Council in January 2022, June 2022 and March 2023 • Community webinar held on January 12, 2022. Approximately 50 individuals signed on to meeting.
RiversideCA.gov
10 DISCUSSION
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11 INCLUSIONARY HOUSING FRAMEWORK
Housing & Homelessness Committee Policy
Direction (October 2022):
• Inclusionary requirements
• Exemptions
• Affordability terms
• Unit characteristics
• Off-site requirements
• In-lieu fee analysis and recommended amounts
RiversideCA.gov
12 INCLUSIONARY REQUIREMENTS
COMMITTEE
RECOMMENDATION
• Adopt a blend of demand-
based and nexus-based
inclusionary requirements
• Establish three tiers:
• low-density for-sale;
• high-density for-sale;
• rental
• Set income limits slightly
lower than HUD limits to
increase affordability
• For-sale single-family: (up to 10.9 units/acre):
5% affordable to Moderate-Income (110%
area median income)
• For-sale condo and townhome: (10.9-14.5
units/acre): 10% affordable to Lower Income
(70% AMI)
• All rental projects: 10% affordable to Lower-
Income (70% AMI)
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13 EXEMPTIONS
COMMITTEE
RECOMMENDATION
• Exempt small development
and individual single-family
homes
• Grandfather ongoing
projects and future
projects with financial
expectations in place
Requirements would not apply to:
• Projects of fewer than three units
• Properties destroyed by disaster and
reconstructed
• Additions and alterations
• Projects that have submitted an application
for processing by effective date of
Ordinance
RiversideCA.gov
14 AFFORDABILITY TERM
COMMITTEE
RECOMMENDATION
• Ensure long-term
availability of affordable
units
• Leverage City/Housing
Authority assets to
maximize affordable
housing stock
• Ensure that capital gains
from increased values are
recaptured
Duration of Affordability
• For-sale units
• 45-year affordability term
• Must be resold to income-qualified households
• Rental units
• 55-year affordability term
Requirements for Selling For-Sale Inclusionary Units
• Owner-occupant only, recertified annually
• The units:
• May be sold and resold to households of the income
levels for which the units were designated at an
affordable sales price for those households; or
• Shall be subject to an equity reimbursement
requirement pursuant to this Chapter
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15 UNIT CHARACTERISTICS
COMMITTEE
RECOMMENDATION
• Promote a diverse mix of
affordable units of all types
and sizes
• Ensure equity in the
provision of amenities,
finishes and fixtures
• Create some allowance for
flexibility in size and
appointment in view of
cost constraints
Development Standards
• Units must be distributed throughout the
project
• Mix of units (beds, baths) must be similar to
market-rate units
• Similar finishes, fixtures and appliances to
market-rate units
• Equal access to amenities and common
areas
• Floor plans can be up to 10% smaller than
average market-rate units
RiversideCA.gov
16 OFF-SITE REQUIREMENTS
COMMITTEE
RECOMMENDATION
• Allow requirements to be
met off-site
• Avoid creating an over-
concentration of
affordable units in a
particular area
• Require a greater
proportion of affordable
units for off-site than on-site
to encourage on-site units
• Off-site units subject to higher inclusionary
requirements (8% single family and 15%
condo/townhome and rental)
• Off-site project must be in same Council
ward as primary project
• Maximum 100 affordable housing units within
500 feet/400 within 1,500 feet
• Unit sizes, types, fixtures, finishes and
appliances must be roughly equivalent to
primary project
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17 IN-LIEU FEES
COMMITTEE
RECOMMENDATION
• Allow inclusionary
requirements to be met
with in-lieu fee payment
• Set in-lieu fees at higher
percentage to
encourage on-site units
• Inclusionary requirement may be satisfied by
payment of in-lieu fee
• In-lieu fees are equivalent to same higher-
percentage inclusionary requirement as off-
site units (8% single-family and 15%
condo/townhome and rental projects)
• Fees due at issuance of first building permit
• All fees collected to be deposited in an
Inclusionary Housing Fund and used to further
affordability
RiversideCA.gov
18 NEXT STEPS
HOW SHOULD THE CITY CONTINUE TO EXPLORE
INCLUSIONARY HOUSING AS A TOOL TO
IMPROVE HOUSING AFFORDABILITY?
Provide further
information
Present a draft
Ordinance
Define applicability
Determine required set-aside(s)
Set desired income level(s)
ALLOW OFF-SITE?
ALLOW IN-LIEU FEES?
No Yes
No Yes
Set requirements
Determine Amount(s)
• Feasibility study results
• Inclusionary requirements
• Exemptions
• Affordability terms
• Unit characteristics
• Off-site requirements
• In-lieu fee analysis and
recommended amounts
Topics for further
discussion/input:
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19 STRATEGIC PLAN ALIGNMENT
This item contributes to
Strategic Priority 2:
Community Well-Being and
Goal No. 2.1 – Facilitate the
development of a quality
and diverse housing supply
that is available and
affordable to a wide range
of income levels.
RiversideCA.gov
20 RECOMMENDATIONS
That the City Council direct staff on next steps
related to an Inclusionary Housing Policy.
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21 REFERENCE ONLY SLIDES
The following slides are included for reference only.
RiversideCA.gov
22 COMPARISON CITY IHPS – IN-LIEU FEES
City
Single-Family For-Sale Townhome/ Condo
For-Sale
Multifamily Rental Notes
Per Market-
Rate Unit
Per Market
Rate Sq. Ft.
Per Market-
Rate Unit
Per Market
Rate Sq. Ft.
Per Market-
Rate Unit
Per Market
Rate Sq. Ft.
Fontana $1,350 - $1,350 - - -
No inclusionary
requirement on rental
projects
Highland $3,750 - $3,750 - $3,750 -
Temecula No In-lieu fee option Applies only to Affordable Housing Overlay Zone
Pomona - $0.41-
$11.40 - $0.33-
$9.30 - $0.33-
$0.92
Fee charged based on size
of project
Jurupa Valley $5,000 $2.00 $2,400 $2.00 $1,900 $2.00
Per unit fees are only
illustrative; fee charged per
sq. ft.
Calimesa No In-lieu fee option Land donation
Irvine $17,000 - $17,000 - $17,000 -
Santa Ana - $6.00 -
$15.00 - $6.00 -
$15.00 - $6.00 -
$15.00
Fee charged based on size
of project
CITIES IN WESTERN RIVERSIDE COUNTY THAT HAVE NOT ADOPTED AN INCLUSIONARY POLICY: Banning | Beaumont | Canyon Lake | Corona | Eastvale | Hemet | Lake Elsinore | Moreno Valley | Murietta | Norco | Perris | San Jacinto | Wildomar | Riverside County 21 22
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23 FEASIBILITY ANALYSIS
• EPS identified prototype rental and for-sale market-
rate products that the City might see developed in
the future
• Tested development feasibility of several scenarios of developing on-site affordable units, using typical
return assumptions:
o 5.25% return on cost for rental projects
o 15% profit margin on for-sale projects
RiversideCA.gov
24 FEASIBILITY FINDINGS - RENTAL
Scenarios for multifamily rental feasibility included:
• 15% and 10% of units for low-income households
• 10% of units for very low-income households
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25 FEASIBILITY FINDINGS - FOR-SALE
Scenarios for for-sale
condos/townhomes include:
• 10% of units for low-income households
• 5% of units for very low-income households
Scenarios for for-sale single-family
include:
• 5% of units for moderate-income households
• 2% of units for low-income households
RiversideCA.gov
26 COMPARISON CITY IHPS – RENTAL UNITS
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27 COMPARISON CITY IHPS – TOWNHOME/CONDO UNITS
RiversideCA.gov
28 COMPARISON CITY IHPS – SINGLE-FAMILY UNITS
27 28