San Rafael officials are questioning whether the city’s affordable housing requirements are scaring off developers.
The city is lagging behind on its progress toward a state-mandated quota for new housing developments. In an effort to incentivize new construction, officials are considering a proposal to ease the affordable housing rules.
The city requires that 20% of homes be sold or rented at below-market rates in new housing developments with 21 or more residences. The requirement drops to 15% for projects with 11 to 20 homes and 10% for projects with 10 or fewer homes.
A developer can pay a fee of $343,969 per home to avoid the rule, known as the inclusionary housing requirement, if the project would otherwise be financially unfeasible. The money goes into a city fund to help pay for affordable housing projects.
But a new proposal calls for cutting the affordable housing requirement to as low as 10% of homes for large housing projects.
“Sure, we’d have fewer affordable units at one location,” said Mayor Gary Phillips. “But in the aggregate, if it’s more affordable to developers we may have two developments instead of one, which would actually result in more units being produced.”
The San Rafael Planning Commission is set to discuss the proposal and provide input to city staff at its meeting at 7 p.m. Tuesday. The city also sent out a poll this month to gauge residents’ interest in the proposal. The results of the survey and the Planning Commission’s input will be presented to the City Council for a discussion later this year, officials said.
“The main goal is to find ways to incentivize developments,” said San Rafael’s principal analyst, Ethan Guy.
San Rafael is expected to permit 1,007 new residences between 2015 and 2023, based on the state’s Regional Housing Needs Assessment. That includes 240 homes for very-low-income residents, 148 for low-income and 181 for moderate-income.
But the city is struggling to meet the quota, which is based on population growth projections. Since 2015, the city has permitted just 242 residences and 171 of them are for households with above-moderate income levels. Three homes have been permitted for residents with very-low incomes, 57 for low-income and 11 moderate-income.
“From the state level, there’s continued pressure to increase housing development,” Guy said.
In April, the City Council agreed to lower the affordable housing requirement from 20% to 13% for a stalled housing development at the Loch Lomond Marina. The 81-home project was approved in 2007, but only 44 residences have been built, including 11 of the 17 required affordable homes. In an effort to speed the project along, the council has allowed developer Marina Village Associates to build and sell all of the remaining homes at market rates and pay a $3.6 million fee to the city to do so.
Affordable housing advocates say the city’s inclusionary housing requirement helps to ensure that affordable housing is spread throughout the city. Allowing developers to pay fees to avoid the rule can result in excluding low-income residents from certain areas, some say.
Caroline Peattie, executive director of Fair Housing Advocates of Northern California, said she doesn’t buy the argument that more affordable housing would be built in San Rafael if the city cuts back its requirement. She said the city’s proposal only “encourages market-rate housing.”
“More development per se isn’t necessarily good if it’s not going to provide badly needed affordable housing and help integrate the already racially and ethnically segregated housing in San Rafael and Marin County,” Peattie said.
