ATTACHMENT 4
Housing Fund Details
Low and Moderate Income Housing Asset Fund – Fund 241
Purpose: Upon becoming the housing successor to the former RDA in February 2011, all former RDA housing assets were transferred to the City. As part of that transfer of housing assets, the City established the Housing Successor Fund (Fund 241). Revenues from rental housing properties, RDA funded loan repayments, and interest are deposited into Fund 241.
Use: The Fund can be used to develop housing or for any other purposes that advances the creation or preservation of affordable units, including new construction, rehabilitation, first time homebuyer loans, and staffing, as long as the uses are consistent with RDA law and Dissolution law. Currently, these funds are being used for housing related expenses, including staffing, rental assistance, maintenance, and other incidental expenses. The use of these funds is governed by Senate Bill 341 and is limited to households earning less than 80 percent of AMI.
Revenue and Projections: Fund 241 has an unencumbered cash balance of $2,463,000 million as of January 1, 2022. This fund will eventually be expended, as there are no new significant revenues being deposited into it. What little revenues it derives are from loan repayments and earned interest.
Housing Trust Fund – Fund 205
Purpose: The City’s Affordable Housing Trust Fund (Fund 205) was created to hold funds received as a result of developer agreements and in lieu payments from the City’s existing Inclusionary Housing Ordinance. If developers were unable to incorporate affordable units into their housing developments, the City in limited cases, accepted in-lieu fees (e.g. Terrabay). In other cases, the City required a housing fee in addition to the affordable units (e.g. Oak Farms).
Use: The fund monies shall be used in accordance with the city’s housing element, or subsequent plans adopted by the city council to maintain or increase the quantity, quality, and variety of affordable housing units or assist other governmental entities, private organizations or individuals to do so. Permissible uses include, but are not limited to, land acquisition, debt service, parcel assemblage, gap financing, housing rehabilitation, grants, unit acquisition, new construction, and other pursuits associated with providing affordable housing. The Fund may be used for the benefit of both rental and owner-occupied housing.
Revenue and Projections: Fund 205 has an unencumbered cash balance of $892,000 as of January 1, 2022. This fund derives revenue from developer in lieu fees and community benefit payments.
If a developer has an inclusionary housing requirement (a below market rate unit set-aside) and is able to pay an in lieu fee, this is where those funds are deposited. City Council set the in lieu fee for affordable housing units quite high – $308,000 per required below market rate unit – so it is
unlikely that many developers will pay the fee rather than build the affordable units. As a result, this fund is unlikely to grow significantly in the coming years.
Commercial Linkage Fees – Fund 823
Purpose: Commercial linkage fees are a type of impact fee assessed on the construction or conversion of commercial buildings to mitigate the increased demand created for affordable housing. New commercial development creates new jobs and attracting new workers to the City.
Workers employed and providing services to this new commercial development need housing, and many of them work in jobs that pay wages too low to afford market rate housing. New commercial development creates a need for housing for new, lower income workers, but does not directly contribute to addressing this need. Based on a nexus study that examines the relationship between affordable housing and new development, a fee is established that requires developers of new commercial development to contribute to a dedicated fund to offset the demand for affordable housing in the City.
Use: The City Council may adopt guidelines prioritizing how the money may be spent on renovating existing units, land purchase, or construction funding for new units. The fees are subject to the Mitigation Fee Act reporting requirements, which require annual updates on collection and expenditure of fees, as well as identification of projects for funding. Every five years, specific findings must be made regarding unspent fees with estimates for future funding commitments.
Revenue and Projections: Fund 823 has an unencumbered cash balance of $5,568,000 as of January 1, 2022. As our biotech cluster continues to grow, this fund is expected to grow substantially in the coming years. Currently, the charge on biotech and office development is $16.55 per square foot. Hotel and retail uses pay a lower fee. It is estimated that the Commercial Linkage Fee will generate at least $122,000,000 over the next 15 years.
The graph and table on the following page show the expected fees collected in each fiscal year, as well as the cumulative total over the next 15 years.
Fiscal Year Fees Per Year Fees Cumulative
20-21 $ 32,649 $ 32,649
21-22 $ 5,460,120 $ 5,492,769
22-23 $ 3,522,637 $ 9,015,406
23-24 $ 21,397,100 $ 30,412,506
24-25 $ 20,260,992 $ 50,673,498
25-26 $ 25,487,565 $ 76,161,062
26-27 $ 8,442,500 $ 84,603,562
27-28 $ 17,664,250 $ 102,267,812
28-29 $ 6,296,750 $ 108,564,562
29-30 $ 1,500,000 $ 110,064,562
30-31 $ 1,500,000 $ 111,564,562
31-32 $ 4,500,000 $ 116,064,562
32-33 $ 1,500,000 $ 117,564,562
33-34 $ 1,500,000 $ 119,064,562
34-35 $ 1,500,000 $ 120,564,562
35-36 $ 1,500,000 $ 122,064,562
$-
$20,000,000
$40,000,000
$60,000,000
$80,000,000
$100,000,000
$120,000,000
$140,000,000
Projected Commercial Linkage Fee Revenue
Fees Per Year Fees Cumulative