Fees and Incentives

High Density Multi-Family Residential Incentive Program

Approved by City Council on August 25, 2018.

High Density Multi-family Residential Incentive Program Staff Report

Council Presentation

The City has implemented an aggressive fee reduction program to incentivize and encourage high-density housing development in the Downtown. The Program has 2 main elements:

  1. Reduction of Capital Facilities Impact Fees and Park Impact Fees based on height
  2. Deferral of Water and Wastewater Impact fees

Market Rate CFF and Park Impact Fee Reduction

In addition, the city is prepared to allow a ceiling for fees on high-rise, high-density housing development in an effort to bring down per-door fees. Current fees for high-density residential projects pencil out to about $29,057 per unit.

For market rate high-rise multifamily properties, the city is proposing capping fees to the first two or three floors (depending on zoning) dedicated to residential housing on a given property conforming with the boundaries of the Downtown Station Area Specific Plan and the General Plan Downtown Core Boundary. Zoning restrictions are as follows:

  • In the Downtown, with CD-7 or CD-10 Zoning: Four or more stories in height, with at least three floors dedicated to residential use.
  • In the Downtown with CD-5, TV-M, TV-R, R-3-18, or R-3-30 Zoning: Three or more stories in height, with at least two floors dedicated to residential use.

Examples of how those costs would look are as follows:

MarketRate_10Stories

MarketRRate_Stories


Affordable Housing CFF and Park Impact Fee Reduction

A proposed Incentive Program has an additional fee incentive specific building affordable housing units on a site pursuant to the City’s Inclusionary Policy. The additional incentives would consist of a temporary reduction in Park Impact and Capital Facilities fees for affordable units to $2 per square foot for Park Impact Fees and $2 per square foot for Capital Facilities.

Assuming an average unit size of 800 square feet, affordable and inclusionary projects would cost $3,260 per unit under the Incentive Program versus $13,167 per unit under the existing fee schedule, illustrated here:

AHRate_10Stories


Water and Sewer Impact Fee Deferral

In addition, the City will offer a water and sewer impact fee deferral program for eligible downtown housing that have a minimum of three floors dedicated to housing. That program will have two options:

  • Option 1:  Deferral of water and wastewater demand fees for eligible projects until 75% of the residential units are occupied or for 6-months after final inspection, whichever is sooner.
  • Option 2: Finance the water and wastewater fees for 5-years with interest.

Deferral offers an estimated $1,700 per unit incentives.


Deadline

For any development to receive these per-room fee incentives, it must break ground before August 2023. “Breaking ground” is defined as securing a foundation permit.