New Developer Fee To Fund Low-Income Housing Fund

The Sacramento City Council has unanimously approved a fee for developers that could raise $110 million for low-income housing over the next 20 years.

The fee of $2.58 per square-foot will be assessed on any new residential development unless it's designed with low-income housing.  

Greg Sandlund is with the City of Sacramento Community Development Department.

He says the city can not legally require low-income housing as part of a development, but it can offer incentives.

"This ordinance is not the silver bullet for the city's affordable housing needs," he says. "Historically, it's produced a quarter of our affordable housing. Projects like La Valentina, The Wall, 700 K that are going up. Those are not inclusionary housing units. Those were built with other subsidies and other programs the city has."  

Gabby Trejo is with the group Sacramento Area Congregations Together. She opposed the plan. She says the fee should be at least $4.
 
"We want to make sure that our city commits to reviewing and revising this ordinance every year so that we can take a look at how much money we've actually accumulated and how much development have we actually created," she says. "Because we're afraid that the fees are too low to actually build real housing in the future."

Sandlund says a developer will get a credit toward the fee depending on how much low-income housing is included in a project.

"The benefit of this ordinance is that we're going to generate critical local housing subsidies while at the same time encouraging overall market-rate housing development, because we need to do both," he says.

Developers of properties larger than 100 acres must pay the fee unless their projects include ten percent low-income housing.

Projects smaller than 100 acres would require 15 percent low-income housing for the fee to be waived.

Sacramento County began charging developers the same amount last year.

It is the highest fee of its kind in the Sacramento region.