HOUSING DEPARTMENT
PUBLIC HEARING FOR AMENDMENTS TO
THE MULTIFAMILY HOUSING INCENTIVE
PROGRAM
May 13, 2025 Item 8.3
City Council
Erik L. Soliván
Housing Director
Banu San
Deputy Director
• City Council approved MHIP on December 10, 2024.
• Reduction of the Inclusionary Housing Ordinance in lieu fee to $0 for approved multifamily housing developments that include at least 5% of units on-site at up to 100% area median income, for developments listed in the MHIP memorandum, which was previously granted only for high-rises located in the downtown area.
• Phase I expires December 31, 2025
50% reduction in the Building and Structure Construction Tax (B&S) and the Commercial-Residential-Mobile Home-Park Building Tax (CRMP)
• Phase II starts January 1, 2026
25% reduction in the B&S Tax
Multifamily Housing Incentive Program (MHIP)
Slide 2
1) Include the Affordable Housing Impact Fund (AHIF) as an allowable program under MHIP, which was the precursor program to IHO; and,
2) Include Federal Realty’s Santana Row Lot 12 development located at 358 Hatton Street in the attachment of the staff memorandum—updated list of eligible MHIP projects; and
3) Increase the number of units allowable for the 50% construction tax reduction from 1,500 to 1,800 units.
MHIP Amendments
Slide 3
The AHIF program applied to rental developments under the following conditions:
1) Developments that obtained a building permit before June 30, 2018; or 2) Developments that:
a) Received entitlements and paid planning applications fees before June 30, 2018; and b) Executed an Affordable Housing Compliance Plan with the Housing Department and paid administrative fees before June 30, 2018; and
c) Were issued a building permit before January 31, 2020 AHIF Program Overview
Slide 5
Santana Row Lot 12 Development (Federal Realty)
Originally permitted in
August 2016 and subject
to AHIF program
regulations.
Up to 258 market-rate
rental units.
The MHIP Program is currently projected
to be oversubscribed based on responses
from the developer community.
Slide 6
Increase of Eligible Units
• Previous Council Direction
If fewer than 1,000 high-rise residential units receive building permits by December 2025, return to Council with additional recommendations to incentivize the construction of downtown high-rise residential projects. • The Program will not issue building permits for more than 1,000 units The only development moving forward prior to December 31, 2025, will be Gateway Towers, an affordable high-rise residential development providing 220 units .
Slide 7
Downtown High-Rise Incentive Program
Progress Report
HOUSING DEPARTMENT
PUBLIC HEARING TO AMEND THE
MULTIFAMILY HOUSING INCENTIVE
PROGRAM
May 13, 2025 Item 8.3
City Council
Erik L. Soliván
Housing Director
Banu San
Deputy Director