DATE: OCTOBER 20, 2026
DEPARTMENT: COMMUNITY DEVELOPMENT
FROM: LISA BRINTON, DIRECTOR
THROUGH: ORLANDO REYES, ASSISTANT DIRECTOR
BY: FRANCISCO BRAMBILA, MANAGEMENT ANALYST JOSEFINA AGUILAR, SENIOR COMMUNITY DEVEOPMENT ANALYST TITLE: INCLUSIONARY HOUSING ORDINANCE UPDATE
RECOMMENDED MOTION:
No action is required. The Housing and Land Use Committee will receive a report on the Inclusionary Housing Ordinance Update.
DISCUSSION:
The City is currently evaluating potential updates to its Inclusionary Housing Ordinance to ensure it continues to support the production of affordable housing opportunities for low- and moderate- income households. On February 1, 2026, the City entered into a Professional Services Agreement with Economic and Planning Systems, Inc. (EPS), a consulting firm contracted to provide technical analyses, stakeholder engagement, and policy recommendations to inform the ordinance update. This effort supports the City Council’s 2025-2028 Strategic Plan goal for the production of affordable housing to low- and moderate-income households in both for-sale and rental developments. Proposed amendments to the Inclusionary Housing Ordinance will be taken to the City’s decision-making body for consideration.
EPS is currently undertaking the following activities to support the update of the City’s Inclusionary Housing Ordinance:
Performed existing socioeconomic and demographic conditions analysis to inform the development of residential housing development prototypes and define the affordability gap. Socioeconomic analysis looks into household incomes, tenure (owner/renter), cost burden, workforce characteristics, housing demand, and target income groups, while Affordability gap analysis, quantifies what target-income households can afford and the cost of producing or acquiring housing; Developed draft inclusionary housing analysis assumptions for the housing development prototypes and seek approval of the prototypes from the City and Technical Advisory Committee (TAC) to move forward with the analysis; and Began a study of the affordable housing plan staff review costs to inform future fee recommendations. The goal is to establish a cost-recovery fee structure that is revenue-neutral and based on actual city staff time required to review affordable housing plans.
The following table identifies the various tasks needed to complete the Inclusionary Housing ordinance update:
Table 1 - Inclusionary Housing Ordinance Next Steps
Task
Description
Conduct Community Outreach
List of stakeholders to identify issues and areas of concern and conduct outreach. Formation of a TAC and outreach to area developers and housing advocates.
Conduct Community Outreach
List of stakeholders to identify issues and areas of concern and conduct outreach. Formation of a TAC and outreach to area developers and housing advocates.
Existing Conditions & Analysis
Prepare socioeconomic analysis & market assessment.
Existing Conditions & Analysis
Prepare socioeconomic analysis & market assessment.
Fee Study
Analyze the nexus between development of market-rate units and the need for affordable housing. Includes demand, affordability gap and impact fee per market-rate unit.
Housing in-lieu fee analysis.
Prepare fee level recommendations.
Municipal Code Revision
Recommend revisions for consideration.
Cost Recovery Analysis
Research the estimated cost to administer reviews to affordable housing development to propose fees that are in line with regional trends.
Draft & Final Presentations
Prepare reports & hold public hearings
Within the next two weeks staff will activate the TAC and inform the members of the time commitment and attendance expectations. This will be followed by a schedule of various outreach sessions to obtain advisory input. The TAC to be named includes three community-based organizations, three not-for-profit housing developers, three contractors and developers, and/or others as appropriate.
The purpose of the TAC is to review the effectiveness of existing requirements, assess the economic feasibility of potential ordinance revisions, evaluate alternative compliance mechanisms, and consider the implications of proposed changes for affordable housing production, market-rate housing development, and the City's housing objectives.
The TAC stakeholder group selected was due to their expertise and diverse perspective. The TAC will advise City staff on potential updates needed for the inclusionary housing ordinance. The shared perspective is to be based on available housing market data, development feasibility analysis, applicable legal requirements, and on the City of Salinas affordable housing needs. The TAC recommendations will inform the decision-making body, the City Council, of the proposed ordinance amendments for consideration. The TAC will serve in an advisory capacity and will not have the authority to adopt ordinance amendments or establish binding City policy. The frequency in which the TAC will meet is to be determined. The anticipated completion date to produce a draft Inclusionary Housing Ordinance is May 2027.
Next Steps
Over the next six months, staff and EPS will finalize TAC membership, conduct stakeholder outreach, complete financial feasibility and fee analyses, evaluate potential ordinance revisions, and return to the Housing and Land Use Committee with recommendations for consideration ATTACHMENTS:
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CITY OF SALINAS
HOUSING AND LAND USE COMMITTEE