HomeMy WebLinkAboutItem 6.2 Dublin Municipal Code Amendments to the Inclusionary Zoning Regulations Chapter 8.68 PLPA-2023-00032STAFF REPORT
Planning Commission
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Agenda Item 6.2
DATE:December 12, 2023
TO:Planning Commission
SUBJECT:Dublin Municipal Code Amendments to the Inclusionary Zoning Regulations
(Chapter 8.68) (PLPA-2023-00032)
Prepared by: Jason Earl, Senior Management Analyst
EXECUTIVE SUMMARY:
The City Council’s Two-Year Strategic Plan includes a review of the Inclusionary Zoning
Regulations. The City Council received a report on September 19, 2023, and directed Staff to
prepare amendments to the Inclusionary Zoning Regulations. Staff has prepared amendments to
the Inclusionary Zoning Regulations based on this direction. These amendments include lowering
the applicability of the regulations to residential development projects of 10 or more units,
creating separate affordability requirements for ownership and rental units, resetting the 55-year
affordable resale restriction upon transfer of ownership, and applying selection criteria to resale
of ownership units. The Planning Commission is being requested to review the proposed
amendments to the Inclusionary Zoning Regulations and make a recommendation to the City
Council.
STAFF RECOMMENDATION:
Conduct the public hearing, deliberate and adopt a Resolution recommending City Council
approval of amendments to Dublin Municipal Code Chapter 8.68 (Inclusionary Zoning
Regulations).
DESCRIPTION:
Background
The City of Dublin Two-Year Strategic Plan includes Strategy 2: Housing Affordability, which
includes the following two objectives:
Objective 2b: Ensure the City’s inclusionary zoning regulations incentivize targeted housing
production;and
Objective 2c: Prepare a nexus study to evaluate the affordable housing commercial linkage
fee and affordable housing in-lieu fee for for-sale and rental housing.
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The consulting firm Economic and Planning Systems (EPS) was selected through a competitive
process to assist Staff with addressing these Strategic Plan Objectives. The subject of this Staff
Report is the proposed amendments to the Inclusionary Zoning Regulations addressing the City
Council Strategic Plan Objective 2b. These amendments require a review and recommendation to
the City Council by the Planning Commission. Staff and EPS are also working with the City Council
to address Strategic Plan Objective 2c and potential amendments to the Affordable Housing In-
Lieu Fee and Commercial Linkage Fee. Please refer to Attachments 4 and 5 for additional
background information regarding these efforts.
The City’s current Inclusionary Zoning Regulations (DMC Chapter 8.68) was adopted by the City
Council in 2002 (Ordinance No. 08-02). The Inclusionary Zoning Regulations (IZR) have been
amended from time to time. These regulations help to achieve the stated purpose of contributing
to the attainment of the City’s housing goals, including the production of units to satisfy the
Regional Housing Needs Allocation (RHNA), by increasing the production of residential units
affordable to very low-, low-, and moderate-income households. This includes successfully
leveraging in-lieu fees collected through this program to facilitate the production of lower income
rental units, including units for special needs populations, and requiring the production of on-site
units where feasible. The City’s current inclusionary requirement applies to ownership and rental
residential development projects of 20 or more units, and requires 12.5% of the units in a market-
rate residential project to be set aside as affordable to lower-income households. A developer may
satisfy 40% of this obligation through the payment of in-lieu fees. Table 1 provides an overview of
key aspects of these current regulations. The current Affordable Housing In-Lieu Fee is $241,131
per affordable unit.
Table 1. Dublin Current Inclusionary Zoning Regulations
Project Size
Threshold
Overall
Inclusionary
Requirement
Income Targets
(Ownership)
Income Targets
(Rental)
Must Build
Requirement
20 Units 12.5%60% Moderate
40% Low
50% Moderate
20% Low
30% Very Low
60% of Inclusionary
Requirement
Staff and EPS prepared an analysis of the development economics, best practices, and a review of
inclusionary regulations in the surrounding Tri-Valley Cities, and a nexus study of the need for
affordable housing generated by non-residential development to formulate recommendations to
the City Council. On August 15, 2023, the City Council received an informational report on the
Inclusionary Zoning and Affordable Housing In-Lieu Fee Feasibility Study and the Commercial
Linkage Fee Nexus Study (Attachment 4). The City Council provided initial feedback and direction
regarding updates to these programs. On September 19, 2023, the City Council received an
informational report (Attachment 5) and directed Staff to prepare the following amendments to
the IZR:
Lower the Inclusionary Zoning Regulations applicability threshold to projects of 10+ units;
and
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Establish separate regulations for ownership and rental developments as presented in the
report.
Staff has prepared amendments to the IZR. The Planning Commission is being requested to review
the proposed amendments and make a recommendation to the City Council. A draft Planning
Commission Resolution recommending that the City Council approve the proposed amendments
to the IZR is included as Attachment 1 with the Draft Ordinance included as Attachment 2. Please
refer to Attachment 3 for the proposed amendments in redline format where underlined text is
proposed to be added and text with a strikethrough is proposed to be deleted.
Analysis
The following is an overview of the proposed amendments to the Inclusionary Zoning Regulations
shown in Attachments 2 and 3. These amendments address the direction received from the City
Council and additional amendments to facilitate implementation of these regulations.
The current regulations do not differentiate the overall inclusionary requirement between
projects with ownership and rental units. However, the economics of these two types of
development vary dramatically. The average for-sale, single-family development requires a
subsidy of $620,000 to produce an affordable unit under the City’s current inclusionary program.
The current in-lieu fee of $241,131 is lower than the subsidy required to build an affordable unit
and thus incentivizes the payment of in-lieu fees. However, there is room to increase this fee while
continuing to incentivize payment of in-lieu fees. The average subsidy to produce an affordable
rental unit under the City’s current inclusionary program is $187,000. Even without the
inclusionary requirement, multifamily rental development is at the limits of feasibility, and the
subsidy required for affordable rental units pushes that limit even further. Reducing the
inclusionary requirement and in-lieu fees would help improve the financial feasibility of such
projects. Therefore, the proposed amendments create separate regulations for ownership and
rental developments. Separately, the City Council will consider amending the in-lieu fees for rental
and ownership units.
The proposed allocation of affordable ownership units remains unchanged. However, the
allocation of affordable rental units is proposed to focus on low-income households. The subsidy
required to achieve units affordable to very low-income households is significant and typically
achieved through development of affordable housing by non-profit housing developers who can
leverage the City’s Affordable Housing Fund and state and federal subsidies to construct these
units. The rent for units affordable to moderate-income households is essentially equal to market
rate rent and, thus, does not provide much benefit in the current market. Table 2 summarizes
these proposed regulations.
Table 2. Ownership and Rental Policy Recommendations
Project
Size
Threshold
Overall
Affordability
Requirement
Very
Low
Low Moderate
Ownership 10 Units 12.5%0%40%60%
Rental 10 Units 10%0%100%0%
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The IZR (Section 8.68.020.E) requires resale controls to ensure that affordable ownership units
remain affordable for a total of 55 years. Staff proposes to amend the regulations to reset the 55-
year period with each transfer of ownership of future for sale units created through the
inclusionary program.
The implementation procedures for the IZR include selection criteria that provide for the use of
preference points by the developer upon the initial sale of units (Section 8.68.050.D). Staff is
proposing to amend this section to require the use of preference points with the resale of
ownership units.
The proposed amendments to the Inclusionary Zoning Regulations align the economics of
developing affordable housing and the efforts of the City Council to prioritize the collection of fees
that can be leveraged to facilitate the production of lower income units to satisfy the City’s RHNA
while providing on-site units.
ENVIRONMENTAL DETERMINATION:
The California Environmental Quality Act (CEQA), together with State Guidelines and City of
Dublin CEQA Guidelines and Procedures require that certain projects be reviewed for
environmental impacts and that environmental documents be prepared. The proposed Zoning
Ordinance Amendments are exempt from the requirements of CEQA pursuant to CEQA Guidelines
Section 15061(b)(3) as the amendments would not result in any physical changes and it can be
seen with certainty that the amendments would not have a significant effect on the environment.
NOTICING REQUIREMENTS/PUBLIC OUTREACH:
In accordance with State law, a public notice was published in the East Bay Times and posted at
several locations throughout the City. The public notice was provided to all people who have
expressed an interest in being notified of meetings. The Staff Report for this public hearing was
also made available on the City’s website.
ATTACHMENTS:
1) Resolution Recommending City Council Approval of Amendments to Dublin Municipal Code
Chapter 8.68 (Inclusionary Zoning Regulations)
2) Exhibit A to Attachment 1 – Ordinance Approving Amendments to the Dublin Municipal Code
Chapter 8.68 (Inclusionary Zoning Regulations)
3) Redlined Version of Amendment to Inclusionary Zoning Regulations
4) City Council Staff Report dated August 15, 2023
5) City Council Staff Report dated September 19, 2023
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Attachment 1
Reso. No. XX-23, Item X.X, Adopted XX/XX/2023 Page 1 of 2
RESOLUTION NO. XX – 23
A RESOLUTION OF THE PLANNING COMMISSION
OF THE CITY OF DUBLIN
RECOMMENDING CITY COUNCIL APPROVAL OF AMENDMENTS TO DUBLIN MUNICIPAL
CODE CHAPTER 8.68 (INCLUSIONARY ZONING REGULATIONS) EFFECTIVE CITYWIDE
PLPA-2023-00032
WHEREAS,the City occasionally initiates amendments to the Dublin Municipal Code to
clarify, add, or amend certain provisions to ensure that it remains current with federal and state
law, internally consistent, simple to understand and implement, and relevant to changes occurring
in the community; and
WHEREAS,Staff initiated amendments to Dublin Municipal Code Chapter 8.68
(Inclusionary Zoning Regulations) consistent with the City of Dublin Two-Year Strategic Plan,
which includes Strategy 2: Housing Affordability, Objective 2b: Ensure the City’s inclusionary
zoning regulations incentivize targeted housing production and Objective 2c: Prepare a nexus
study to evaluate the affordable housing commercial linkage; and
WHEREAS,the City selected the consulting firm Economic and Planning Systems (EPS)
to prepare an Inclusionary Zoning and Affordable Housing In-Lieu Fee Feasibility Study and
Commercial Linkage Fee Nexus Study to inform the proposed amendments; and
WHEREAS,on August 15, 2023, and September 19, 2023, the City Council received
informational reports on the Commercial Linkage Fee and Inclusionary Zoning and In-Lieu Fee
programs and provided direction to staff to prepare updates to the programs; and
WHEREAS,proposed amendments to Dublin Municipal Code Chapter 8.68 (Inclusionary
Zoning Regulations) include changes to the affordability requirements for rental and ownership
development projects, modifications to the provisions for the payment of fees in-lieu of
constructing affordable units, revisions to the allocation of units to income levels, and revisions to
the exceptions to the affordability requirements; and
WHEREAS,the California Environmental Quality Act (CEQA), together with the State
Guidelines and City of Dublin CEQA Guidelines and Procedures require that certain projects be
reviewed for environmental impacts and that environmental documents be prepared; and
WHEREAS,the Planning Commission recommends that the City Council find the proposed
amendments exempt from the requirements of CEQA pursuant to CEQA Guidelines Section
15061(b)(3) as the amendments would not result in any physical changes and it can be seen with
certainty that the amendments would not have a significant effect on the environment; and
WHEREAS,the Planning Commission held a duly noticed public hearing on December 12,
2023, during which all interested persons were heard; and
WHEREAS, proper notice of said hearing was given in all respects as required by law; and
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Reso. No. XX-23, Item X.X, Adopted XX/XX/2023 Page 2 of 2
WHEREAS,a Staff Report dated December 12, 2023, was submitted to the Dublin
Planning Commission recommending approval of the proposed amendments to Dublin Municipal
Code Chapter 8.68; and
WHEREAS,the Planning Commission did hear and consider all said reports,
recommendations and testimony herein above set forth and used its independent judgment to
evaluate the recommendations.
NOW, THEREFORE, BE IT RESOLVED that the foregoing recitals are true and correct
and made a part of this Resolution.
BE IT FURTHER RESOLVED that the City of Dublin Planning Commission does hereby
recommend that the City Council adopt the Ordinance attached hereto as Exhibit A,and
incorporated herein by reference.
PASSED, APPROVED AND ADOPTED this 12th day of December 2023, by the following
vote:
AYES:
NOES:
ABSENT:
ABSTAIN:
______________________________
Planning Commission Chair
ATTEST:
______________________________________
Assistant Community Development Director
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Attachment 2
Ord. No. XX-23, Item X.X, Adopted XX/XX/2023 Page 1 of 10
ORDINANCE NO. XX – 23
AN ORDINANCE OF THE CITY COUNCIL
OF THE CITY OF DUBLIN
APPROVING AMENDMENTS TO DUBLIN MUNICIPAL CODE CHAPTER 8.68
(INCLUSIONARY ZONING REGULATIONS)
PLPA-2023-00032
The Dublin City Council does ordain as follows:
SECTION 1. RECITALS
A. The City occasionally initiates amendments to the Dublin Municipal Code to clarify, add, or
amend certain provisions to ensure that it remains current with federal and state law, internally
consistent, simple to understand and implement, and relevant to changes occurring in the
community.
B. Staff initiated amendments to Dublin Municipal Code Chapter 8.68 (Inclusionary Zoning
Regulations) consistent with the City of Dublin Two-Year Strategic Plan, which includes
Strategy 2: Housing Affordability, Objective 2b: Ensure the City’s inclusionary zoning
regulations incentivize targeted housing production and Objective 2c: Prepare a nexus study
to evaluate the affordable housing commercial linkage.
C. The City selected the consulting firm Economic and Planning Systems (EPS) to prepare an
Inclusionary Zoning and Affordable Housing In-Lieu Fee Feasibility Study and Commercial
Linkage Fee Nexus Study to inform the proposed amendments.
D. On August 15, 2023, and September 19, 2023, the City Council received informational reports
on the Commercial Linkage Fee and Inclusionary Zoning and In-Lieu Fee programs and
provided direction to staff to prepare updates to the programs.
E. The proposed amendments to Dublin Municipal Code Chapter 8.68 (Inclusionary Zoning
Regulations) include changes to the affordability requirements for rental and ownership
development projects, modifications to the provisions for the payment of fees in-lieu of
constructing affordable units, revisions to the allocation of units to income levels, and revisions
to the exceptions to the affordability requirements.
F. The Planning Commission held a duly noticed public hearing on December 12, 2023, during
which all interested persons were heard, and adopted Resolution No. 23-xx recommending
that the City Council approve the proposed amendments to Dublin Municipal Code Chapter
8.68 (Inclusionary Zoning Regulations).
G. A Staff Report was submitted to the Dublin City Council recommending approval of the
proposed amendments to Dublin Municipal Code Chapter 8.68 (Inclusionary Zoning
Regulations).
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Ord. No. XX-23, Item X.X, Adopted XX/XX/2023 Page 2 of 10
H. The City Council held a public hearing on the proposed amendments to Dublin Municipal Code
Chapter 8.68 (Inclusionary Zoning Regulations) on _________, at which time all interested
persons had an opportunity to be heard.
I. Proper notice of said hearing was given in all respects as required by law.
J. The City Council did hear and consider all said reports, recommendations and testimony herein
above set forth and used its independent judgement to evaluate the project.
SECTION 2. FINDINGS
A. Pursuant to Dublin Municipal Code Section 8.120.050.B., the City Council hereby finds that
the amendments to Dublin Municipal Code Chapter 8.68 (Inclusionary Zoning Regulations)
are consistent with the General Plan and any applicable Specific Plan in that they would
provide an update to the City’s affordable housing requirements. Specifically, the
amendments would implement Housing Element Program B.4, which calls for a review of the
Inclusionary Zoning Regulations and preparation of a nexus study reviewing the affordable
housing in-lieu fee.
B. The California Environmental Quality Act (CEQA), together with the State Guidelines and City
of Dublin CEQA Guidelines and Procedures require that certain projects be reviewed for
environmental impacts and that environmental documents be prepared. The City Council
hereby finds that the amendments to Dublin Municipal Code Chapter 8.68 (Inclusionary Zoning
Regulations) are exempt from the requirements of CEQA pursuant to CEQA Guidelines
Section 15061(b)(3) as the amendments would not result in any physical changes and it can
be seen with certainty that the amendments would not have a significant effect on the
environment.
SECTION 3. AMENDMENT OF CHAPTER 8.68.
Dublin Municipal Code Chapter 8.68 (Inclusionary Zoning Regulations) is amended to read as
follows:
“Inclusionary Zoning Regulations”
8.68.010 Purpose.
The purpose of this Chapter is to:
A. Enhance the public welfare and assure that further housing development contributes to
the attainment of the City’s housing goals by increasing the production of residential units
affordable by households of very low, low, and moderate income.
B. Assure that the limited remaining developable land in the City’s planning area is utilized
in a manner consistent with the City’s housing policies and needs.
8.68.020 Definitions.
As used in this Chapter, each of the following terms shall be defined as follows:
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A.“Affordable unit” means an ownership or rental-housing unit, affordable to households with
very low-, low-, or moderate-incomes as defined in this Chapter.
1.Rental units are deemed affordable units if the annual rent does not exceed 30% of
maximum income level for very low-, low- and moderate-income households, adjusted for
household size and as defined below.
2.Owner-occupied units are deemed affordable units if the sales price results in annual
housing expenses that do not exceed 35% of the maximum income level for very low-, low-,
and moderate-income households, adjusted for household size and as defined below.
B. “Applicant” means any person, firm, partnership, association, joint venture, corporation, or
any entity or combination of entities that seeks city real property development permits or
approvals.
C.“Dwelling unit” means a dwelling designed and intended for occupancy by one household.
D. “Very low-, low-, and moderate-income levels” means those income and eligibility levels
determined periodically by the California Department of Housing and Community
Development based on Alameda County median income levels adjusted for family size. Such
levels shall be calculated on the basis of gross annual household income considering
household size and number of dependents, income of all household members eighteen years
of age and older, and all other sources of household income and will be recertified as set forth
by local standards, and state and federal housing law.
1.“Very low-income” means 50% or less of the median income, adjusted for actual household
size.
2.“Low-income” means more than 50% and up to 80% of the median income, adjusted for
actual household size.
3.“Moderate-income” means more than 80% and up to 120% of the median income, adjusted
for actual household size.
E. “Resale controls and/or rent restrictions” means legal restrictions by which the affordable
units shall be restricted to ensure that the unit remains affordable to very low-, low-, or
moderate-income households, as applicable, for a period of not less than 55 years. The 55
year period will reset each time ownership of the unit is transferred through a bona fide sales
transaction with a third party during the resale restriction period. With respect to rental units,
such rent restrictions shall be in the form of a regulatory agreement recorded against the
applicable property. With respect to owner-occupied units, such resale controls shall be in the
form of resale restrictions, deeds of trust, and/or other similar documents recorded against the
applicable property.
F. “Residential development” includes, without limitation, detached single-family dwellings,
multiple-dwelling structures, groups of dwellings, condominium or townhouse developments,
condominium conversions, cooperative developments, mixed use developments that include
housing units, and residential land subdivisions intended to be sold to the general public.
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8.68.030 General Requirements.
A. Affordability Requirement for Rental Units.All new rental residential development
projects with 10 units or more designed and intended for permanent occupancy shall construct
10.0% of the total number of dwelling units within the development as affordable units, except
as otherwise provided by this Chapter, and except when all of the dwelling units (excluding
units reserved for property management) within the project are affordable. The foregoing
requirement shall be applied no more than once to an approved residential development (and
generally at the tentative map stage), regardless of the changes in the character or ownership
of the development, except as provided by this Chapter, provided the total number of units
does not change. In applying and calculating the affordability requirement, any decimal fraction
less than or equal to 0.50 may be disregarded, and any decimal fraction greater than 0.50
shall be construed as one unit.
B. Affordability Requirement for Ownership Units.All for-sale (ownership) residential
development projects of 10 units or more designed and intended for permanent occupancy
shall construct 12.5% of the total number of dwelling units within the development as
affordable units, except as otherwise provided by this Chapter. The foregoing requirement
shall be applied no more than once to an approved residential development (and generally at
the tentative map stage), regardless of the changes in the character or ownership of the
development, except as provided by this Chapter, provided the total number of units does not
change. In applying and calculating the affordability requirement, any decimal fraction less
than or equal to 0.50 may be disregarded, and any decimal fraction greater than 0.50 shall be
construed as one unit.
C. Allocation of Units to Income Levels.Affordable units provided pursuant to this section
shall be allocated as follows:
Rental Units Owner-Occupied Units
Very low-income households 0%0%
Low-income households 100%40%
Moderate-income households 0%60%
Where the calculation of the allocation results in fewer units than would otherwise be required,
one additional unit should be allocated to the income level with a decimal fraction closest to
0.50.
D. Conditions of Approval:Any tentative map, conditional use permit, or site development
review approving residential development projects subject to this Chapter shall contain
conditions sufficient to ensure compliance with the provisions of this Chapter. Such conditions
shall detail the number of affordable units required, set forth the applicant’s manner of
compliance with this Chapter, and require the execution of an agreement imposing appropriate
resale controls and/or rental restrictions on the affordable units.
E. Concurrent Construction.All affordable units in a project or phase of a project shall be
constructed concurrently with market-rate units, unless the City Manager determines in writing
that extenuating circumstances exist that make concurrent construction infeasible or
impractical.
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Ord. No. XX-23, Item X.X, Adopted XX/XX/2023 Page 5 of 10
F. Design and Distribution of Affordable Units.All affordable units shall reflect the range
of numbers of bedrooms provided in the project as a whole and shall not be distinguished by
exterior design, construction, or materials. Affordable units may be of smaller size than the
units in the project and may have fewer amenities than the market rate units in the project. All
affordable units shall be reasonably dispersed throughout the project.
8.68.040 Exceptions to Affordability Requirement.
Developers of projects subject to Sections 8.68.030A and 8.68.030B shall construct the total
number of affordable dwelling units within the development, unless subject to an exception set
forth in this section. All exceptions require City Council approval.
A. Payment of Fees In Lieu of Constructing Affordable Units. Upon request, the applicant
shall be permitted to pay a fee in lieu of constructing up to 40% of the affordable units that the
developer would otherwise be required to construct pursuant to Sections 8.68.030A and
8.68.030B. The amount of the fee shall be as set forth in a resolution of the City Council, which
may be amended from time to time to reflect inflation and changed conditions in the City and
the region. In lieu fees shall be paid at the time and in the amount set forth in the in lieu fee
resolution in effect at the time of issuance of the building permit.
B. Off-Site Projects.An applicant may construct the affordable units not physically within
the development in lieu of constructing some or all of the affordable units within the
development, with the approval of the City Council, if the City Council finds:
1. Construction of the units off-site in lieu of constructing units on-site is consistent with the
Chapter’s goal of creating, preserving, maintaining, and protecting housing for very low-, low-
and moderate-income households.
2. Units to be constructed off site are consistent with Section 8.68.030F above.
3. Would be infeasible or impractical to construct affordable units on-site.
4. Conditions of approval for the project require that the off-site affordable units would be
governed by the terms of a deed restriction and, if applicable, rental restrictions similar to that
used for the on-site affordable units.
5. Conditions of approval for the project, or other security such as a cash deposit, bond, or
letter of credit, are adequate to require the construction of the off-site affordable units
concurrently with the completion of the construction of the residential development or within a
reasonable period (not to exceed five years).
C. Land Dedication.An applicant may dedicate land to the City or city-designated local non-
profit housing developer in lieu of construction of some or all of the required affordable units,
if the Council finds:
1. Dedication of land in lieu of constructing units is consistent with the Chapter’s goal of
creating, preserving, maintaining, and protecting housing for very low-, low- and moderate-
income households.
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Ord. No. XX-23, Item X.X, Adopted XX/XX/2023 Page 6 of 10
2. The dedicated land is useable for its intended purpose, is free of toxic substances and
contaminated soils, and is fully improved, with infrastructure, adjacent utilities, grading, and all
development-impact fees paid excluding any inclusionary zoning ordinance fees.
3.The proposed land dedication is of sufficient size to meet the following requirements:
a.The dedication includes land sufficient to construct the number of units that the applicant
would otherwise be required to construct by Section 8.68.030.A, based on the size of lots in
the subdivision for which the applicant is meeting its obligation; and
b.In addition, the dedication includes such additional land the market value for which is equal
to or exceeds the difference between the value of a market-rate, 1200-square foot unit and
the price at which such a unit could be sold as an Affordable Unit (which amount shall be set
forth in a resolution adopted from time to time by the City Council) times the number of units
required.
D. Credit Transfers.An applicant may fully or partially satisfy the requirements of Sections
8.68.030A and 8.68.030B through the use of transfer credits created pursuant to
Section 8.68.060. Credit certificates shall be presented to the Community Development
Director, who shall note at the time of project approval the credit certificate by number. Credit
certificates may only be used to satisfy the requirements for Inclusionary Units for the income
category (i.e., very low-, low-, or moderate-income) and number of bedrooms for which they
are issued.
E. Waiver of Requirements.The City Council, at its discretion, may waive, wholly or partially,
the requirements of this ordinance and approve alternate methods of compliance with this
Chapter if the applicant demonstrates, and the City Council finds, that such alternate methods
meet the purposes of this Chapter.
8.68.050 General Procedures for Implementing Inclusionary Zoning Requirements.
A. Agreements.Prior to the issuance of a building permit for an affordable unit, resale
restrictions or rental controls, or both, as the case may be, shall be set forth in an agreement
between the City and the developer, in a form consistent with the City Council-adopted form
agreement, which agreement shall be recorded against the property containing the affordable
units. The agreement shall be executed by the City Manager, and its requirements shall run
with the land and bind the applicant’s successors.
B. Rental Units; Occupancy; Annual Report.Agreements involving rental units shall
require the owner of the affordable units to ensure that the units are occupied by tenants whose
monthly income levels do not exceed very low-, low-, or moderate-income levels, as the case
may be, and shall preclude tenants from subletting or subleasing the unit. The agreement shall
also require the owner of the affordable unit to submit an annual report to the City Manager, in
a format approved by the City. The report shall include, but not be limited to the following
information: an identification of the affordable units within the project; the monthly rents
charged and proposed to be charged; vacancy information for the prior year; and the monthly
income for tenants of each affordable unit throughout the prior year.
C. Ownership Units; Occupancy; City’s Right of First Refusal.Agreements for ownership
units shall specify that the inclusionary units must be occupied by the owner or owners and
may not be leased or rented without the written approval of the City. The resale restrictions
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shall provide that in the event of the sale of an affordable unit, the City shall have the right to
purchase any affordable owner-occupant unit at the maximum price that could be charged to
an eligible household.
D. Selection Criteria.No household shall be permitted to occupy a unit that is required under
this Chapter to be affordable unless the City or its designee has approved the household’s
eligibility. Eligible potential occupants of affordable units will be qualified on the basis of
household income as defined by this Chapter. The selection criteria for a qualified household
may not distinguish between adults and children. Selection of qualified person should be based
on priorities established using the point system described below:
• Employed within the boundaries of the City of Dublin (3 points maximum, one per
household member)
• Public Service employee working in the City of Dublin (1 point)
• Dublin resident (3 points maximum, one per household member)
• Seniors (1 point, one per household)
• Permanently disabled (1 point, one per household)
• Immediate family member of Dublin resident (1 point, one per household)
• Required to relocate from current Dublin residence due to demolition of dwelling or
conversion of dwelling from rental to for-sale unit (1 point, one per household)
To qualify as a “Public Service Employee”, the person shall be employed by a Public Agency.
To qualify as “Employed within the boundaries of the City of Dublin”, the person shall have
been employed within the City of Dublin for at least six months.
To qualify as a “Dublin resident,” the person shall have been a resident of the City of Dublin
for at least a one-year period prior to the eligibility determination.
8.68.060 Affordable Unit Credits.
A. Creation.Affordable unit credits may be created by the City Council. One affordable unit
credit certificate shall be issued for each affordable unit constructed in excess of the number
of affordable units required to be constructed for the project by Sections 8.68.030A and
8.68.030B. The certificate shall designate a specific income category (i.e., very low-, low-, or
moderate-income) and number of bedrooms for which they are issued.
B. Ownership and Use of Credits.Affordable unit credit certificates are issued to and
become the possession of the project owner, who may use them to satisfy the requirements
of this Chapter for another project in the City. If a project owner proposes to sell credit
certificates, the parties shall first obtain the consent of the Finance Director, who will document
the transfer by certificate number.
8.68.070 Incentives to Encourage On-Site Construction of Affordable Units.
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Ord. No. XX-23, Item X.X, Adopted XX/XX/2023 Page 8 of 10
The City may, but shall not be required to, offer incentives or financial assistance to encourage
the on-site construction of affordable units in excess of the total number of affordable units
required by this Chapter to be included in the project to the extent resources for this purpose
are available and approved for such use by the City Council or City Manager. Such incentives
may include, but shall not be limited to, the following:
A. Fee Deferral.
1. Development Processing Fees.The City Manager may approve deferred payment of
City processing fees applicable to the review and processing of the project. The terms and
payment schedule of the deferred fees shall be subject to the approval of the City Manager.
2. Development Impact Fees.The City Council may authorize the deferred payment of
development impact fees applicable to the affordable units. Approval of this incentive requires
demonstration by the Applicant that the deferral increases the project’s feasibility. The
applicant must provide appropriate security to ensure future payment of such fees.
B. Design Modifications.The City Council may approve design modifications to affordable
units that increase the feasibility of the construction of affordable units, including but not limited
to, the following:
1.Reduced lot size.
2.Reduced setback requirements.
3.Reduced open space requirements.
4.Reduced landscaping requirements.
5.Reduced interior or exterior amenities.
6. Reduction in parking requirements.
7. Height restriction waivers.
Section 8.68.080 Inclusionary Zoning In Lieu Fees.
The fund previously known as the “Inclusionary Zoning In Lieu Fee fund” is hereby renamed
the “Affordable Housing Fund” (“Fund”) and all In Lieu Fees shall be deposited into the Fund.
A. Use.All monies in the Fund, together with any interest earnings on such monies less
reasonable administrative charges, shall be used or committed to use by the City for the
purpose of providing very low-, low-, and moderate-income ownership or rental housing in the
City of Dublin.
B. Annual Report.The City Manager shall prepare an annual report to the City Council
identifying the balance of monies in the Fund and the affordable units provided and any monies
committed to providing very low-, low-, and moderate-income housing. The annual report shall
also include a review of administrative charges.
Section 8.68.090 Violations.
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Ord. No. XX-23, Item X.X, Adopted XX/XX/2023 Page 9 of 10
It shall be unlawful for any person, firm, corporation, partnership or other entity that is subject
to this ordinance pursuant to Sections 8.68.030A and 8.68.030B to violate any provision or to
fail to comply with any of the requirements of this Chapter. A violation of any of the provisions
of or failure to comply with any of the requirements of this Chapter shall constitute a
misdemeanor; except that notwithstanding any other provisions of this Code, any such
violation constituting a misdemeanor under this Chapter, may in the discretion of the enforcing
authority, be charged and prosecuted as an infraction. Any person convicted of an infraction
under the provisions of this Code shall be punishable as provided by the Government Code of
the State of California.
8.68.100 Enforcement.
A. General.The City Manager shall enforce this Chapter, and its provisions shall be binding
on all agents, successors, and assigns of an applicant. The City Manager may suspend or
revoke any building permit or approval upon finding a violation of any provision of this Chapter.
No land-use approval, building permit, or certificate of occupancy shall be issued for any
residential development unless exempt from or in compliance with this Chapter. The City may
institute any appropriate legal actions or proceedings necessary to ensure compliance
herewith, including, but not limited to, actions to revoke, deny, or suspend any permit or
development approval.
B. Excessive Rents/Legal Action.If the City Manager determines that rents in excess of
those allowed by operation of this Chapter have been charged to a tenant residing in an
affordable unit, the City may take appropriate legal action to recover, and the project owner
shall be obligated to pay to the tenant, or to the City in the event the tenant cannot be located,
any excess rents charged.
Section 8.68.110 Appeals.
Decisions of the City Manager under this Chapter may be appealed as provided in
Chapter 8.136.
SECTION 4. EFFECTIVE DATE. This Ordinance shall take effect and be enforced 30 days
following its final adoption.
SECTION 5. SEVERABILITY. The provisions of this Ordinance are severable and if any
provision, clause, sentence, word or part thereof is held illegal, invalid, unconstitutional, or
inapplicable to any person or circumstances, such illegality, invalidity, unconstitutionality, or
inapplicability shall not affect or impair any of the remaining provisions, clauses, sentences,
sections, words or parts thereof of the Ordinance or their applicability to other persons or
circumstances.
SECTION 6. POSTING.The City Clerk of the City of Dublin shall cause this Ordinance to be
posted in at least three public places in the City of Dublin in accordance with Section 36933 of the
Government Code of the State of California.
PASSED, APPROVED AND ADOPTED this __th day of _______ 2024, by the following
vote:
709
Ord. No. XX-23, Item X.X, Adopted XX/XX/2023 Page 10 of 10
AYES:
NOES:
ABSENT:
ABSTAIN:
______________________________
Mayor
ATTEST:
_________________________________
City Clerk
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INCLUSIONARY ZONING REGULATIONS
8.68.010 Purpose.
The purpose of this cChapter is to:
A. eEnhance the public welfare and assure that further housing development contributes to
the attainment of the City’s housing goals by increasing the production of residential units
affordable by households of very low, low, and moderate income.
B.aAssure that the limited remaining developable land in the City’s planning area is utilized in
a manner consistent with the City’s housing policies and needs. Rev. Ord. 1-03 (January 2003);
Ord. 8-02 (May 2002)
8.68.020 Definitions.
As used in this cChapter, each of the following terms shall be defined as follows:
A.“Affordable unit” means an ownership or rental-housing unit, including senior housing,
affordable to households with very-low-, low-, or moderate-incomes as defined in this Chapter.
1.Rental units are deemed affordable units if the annual rent does not exceed 30% of
maximum income level for very low-, low- and moderate-income households, adjusted for
household size and as defined below.
2.Owner-occupied units are deemed affordable units if the sales price results in annual
housing expenses that do not exceed 35% of the maximum income level for very-low-,
low-, and moderate-income households, adjusted for household size and as defined
below.
B.“Applicant” means any person, firm, partnership, association, joint venture, corporation, or
any entity or combination of entities that seeks city real property development permits or
approvals.
C.“Dwelling unit” means a dwelling designed and intended for occupancy by one household.
D.“Very-low-, low-, and moderate-income levels” means those income and eligibility levels
determined periodically by the California Department of Housing and Community Development
based on Alameda County median income levels adjusted for family size. Such levels shall be
calculated on the basis of gross annual household income considering household size and
number of dependents, income of all wage earners household members eighteen years of age
and older, elderly or disabled family members, and all other sources of household income and
will be recertified as set forth by local standards, and state and federal housing law.
Attachment 3
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1. “Very-low-income” means 50% or less of the median income, adjusted for actual
household size.
2. “Low-income” means more than 50% and up to 80% of the median income, adjusted
for actual household size.
3. “Moderate-income” means more than 80% and up to 120% of the median income,
adjusted for actual household size.
E. “Resale controls and/or rent restrictions” means legal restrictions by which the affordable
units shall be restricted to ensure that the unit remains affordable to very-low-, low-, or
moderate-income households, as applicable, for a period of not less than 55 years. The 55 year
period will reset with each time ownership of the unit is transferred through a bona fide sales
transaction with a third party during the resale restriction period sale of the unit. With respect
to rental units, such rent restrictions shall be in the form of a regulatory agreement recorded
against the applicable property. With respect to owner-occupied units, such resale controls
shall be in the form of resale restrictions, deeds of trust, and/or other similar documents
recorded against the applicable property.
F. “Residential development” includes, without limitation, detached single-family dwellings,
multiple-dwelling structures, groups of dwellings, condominium or townhouse developments,
condominium conversions, cooperative developments, mixed use developments that include
housing units, and residential land subdivisions intended to be sold to the general public. Rev.
Ord. 43-08 (December 2008); Ord. 8-05 (March 2005); Ord. 1-03 (January 2003); Ord. 8-02 (May
2002)
8.68.030 General Requirements.
A. 12.5% Affordability Requirement for Rental Units. All new rental residential rental
development projects of with 20 10 units or more designed and intended for permanent
occupancy shall construct 12.5 10.0% of the total number of dwelling units within the
development as affordable units, except as otherwise provided by this cChapter, and except
when all of the dwelling units (excluding units reserved for property management) within the
project are affordable. The foregoing requirement shall be applied no more than once to an
approved residential development (and generally at the tentative map stage), regardless of the
changes in the character or ownership of the development, except as provided by this Chapter,
provided the total number of units does not change. In applying and calculating the
affordability requirement, any decimal fraction less than or equal to 0.50 may be disregarded,
and any decimal fraction greater than 0.50 shall be construed as one unit.
B. Affordability Requirement for Ownership Units. All for-sale (ownership) residential
development projects of 10 units or more designed and intended for permanent occupancy
shall construct 12.5% of the total number of dwelling units within the development as
affordable units, except as otherwise provided by this Chapter. The foregoing requirement shall
712
be applied no more than once to an approved residential development (and generally at the
tentative map stage), regardless of the changes in the character or ownership of the
development, except as provided by this Chapter, provided the total number of units does not
change. In applying and calculating the affordability requirement, any decimal fraction less than
or equal to 0.50 may be disregarded, and any decimal fraction greater than 0.50 shall be
construed as one unit.
BC. Allocation of Units to Income Levels. Affordable units provided pursuant to this section
shall be allocated to households with very-low, low-, and moderate-income levels as follows:
Rental Units Owner-Occupied Units
Very-low-income households 030% 0%
Low-income households 10020% 40%
Moderate-income households 050% 60%
Where the calculation of the allocation results in fewer units than would otherwise be required
pursuant to subsection A of this section, one additional unit should be allocated to the income
level with a decimal fraction closest to 0.50.
CD. Conditions of Approval: Any tentative map, conditional use permit, or site development
review approving residential development projects subject to this cChapter shall contain
conditions sufficient to ensure compliance with the provisions of this cChapter. Such conditions
shall detail the number of affordable units required, specify the schedule of construction of
affordable units, set forth the applicant’s manner of compliance with this cChapter, and require
the execution of an agreement imposing appropriate resale controls and/or rental restrictions
on the affordable units.
DE. Concurrent Construction. All affordable units in a project or phase of a project shall be
constructed concurrently with market-rate units, unless the City Manager determines in writing
that extenuating circumstances exist that make concurrent construction infeasible or
impractical.
EF. Design and Distribution of Affordable Units. All affordable units shall reflect the range
of numbers of bedrooms provided in the project as a whole and shall not be distinguished by
exterior design, construction, or materials. Affordable units may be of smaller size than the
units in the project and may have fewer amenities than the market rate units in the project. All
affordable units shall be reasonably dispersed throughout the project. Rev. Ord. 43-08
(December 2008); Ord. 1-03 (January 2003); Ord. 8-02 (May 2002)
8.68.040 Exceptions to 12.5% Affordability Requirement.
713
Developers of projects subject to Sections 8.68.030A and 8.68.030B shall construct 12.5% of the
total number of affordable dwelling units within the development as affordable units, unless
subject to an exception set forth in this section. All exceptions require City Council approval,
which shall be obtained at or prior to the last discretionary approval for the project.
A. Payment of Fees In Lieu of Creation of Affordable Units. Upon request of the applicant,
the City Council shall permit the applicant to pay a fee in lieu of constructing up to 40% of the
affordable units that the developer would otherwise be required to construct pursuant to
Sections 8.68.030A and 8.68.030B. The amount of the fee shall be as set forth in a resolution of
the City Council, which may be amended from time to time to reflect inflation and changed
conditions in the City and the region. In lieu fees shall be paid at the time and in the amount set
forth in the in lieu fee resolution in effect at the time of issuance of the building permit.
B. Off-Site Projects. An applicant may construct the affordable units not physically within the
development in lieu of constructing some or all of the affordable units within the development,
with the approval of the City Council, if the City Council finds:
1. that cConstruction of the units off-site in lieu of constructing units on-site is consistent
with the cChapter’s goal of creating, preserving, maintaining, and protecting housing for
very low-, low- and moderate-income households.
2. that the uUnits to be constructed off site are consistent with Section 8.68.030EF
above.
3. that it wWould be infeasible or impractical to construct affordable units on-site.
4. that cConditions of approval for the project require that the off-site affordable units
would be governed by the terms of a deed restriction and, if applicable, rental restrictions
similar to that used for the on-site affordable units.
5. that the cConditions of approval for the project, or other security such as a cash
deposit, bond, or letter of credit, are adequate to require the construction of the off-site
affordable units concurrently with the completion of the construction of the residential
development or within a reasonable period (not to exceed 5 five years).
C. Land Dedication. An applicant may dedicate land to the City or city-designated local non-
profit housing developer in lieu of construction of some or all of the required affordable units, if
the Council finds that:
1. that dDedication of land in lieu of constructing units is consistent with the cChapter’s
goal of creating, preserving, maintaining, and protecting housing for very-lowvery low-,
low- and moderate-income households.
714
2. that tThe dedicated land is useable for its intended purpose, is free of toxic
substances and contaminated soils, and is fully improved, with infrastructure, adjacent
utilities, grading, and all development-impact fees paid excluding any inclusionary zoning
ordinance fees.
3. that tThe proposed land dedication is of sufficient size to meet the following
requirements:
a. tThe dedication includes land sufficient to construct the number of units that the
applicant would otherwise be required to construct by Section 8.68.030.A, based on the
size of lots in the subdivision for which the applicant is meeting its obligation; and
b. iIn addition, the dedication includes such additional land the market value for which is
equal to or exceeds the difference between the value of a market-rate, 1200-square foot
unit and the price at which such a unit could be sold as an Affordable Unit (which amount
shall be set forth in a resolution adopted from time to time by the City Council) times the
number of units required.
D. Credit tTransfers. An applicant may fully or partially satisfy the requirements of Sections
8.68.030A and 8.68.030B through the use of transfer credits created pursuant to
Section 8.68.060. Credit certificates shall be presented to the Community Development
Director, who shall note at the time of project approval the credit certificate by number. Credit
certificates may only be used to satisfy the requirements for Inclusionary Units for the income
category (i.e., very low-, low-, or moderate-income) and number of bedrooms for which they are
issued.
E. Waiver of Requirements. The City Council, at its discretion, may waive, wholly or partially,
the requirements of this ordinance and approve alternate methods of compliance with this
Chapter if the applicant demonstrates, and the City Council finds, that such alternate methods
meet the purposes of this Chapter. Rev. Ord. 1-03 (January 2003); Ord. 8-02 (May 2002)
8.68.050 General Procedures for
Implementing Inclusionary Zoning Requirements.
A. Agreements. Prior to the issuance of a building permit for an affordable unit, resale
restrictions or rental controls, or both, as the case may be, shall be set forth in an agreement
between the City and the developer, in a form consistent with the City Council-adopted form
agreement, which agreement shall be recorded against the property containing the affordable
units. The agreement shall be executed by the City Manager, and its requirements shall run
with the land and bind the applicant’s successors.
B. Rental Units; Occupancy; Annual Report. Agreements involving rental units shall require
the owner of the affordable units to ensure that the units are occupied by tenants whose
monthly income levels do not exceed very low-, low-, or moderate incomemoderate-income
715
levels, as the case may be, and shall preclude tenants from subletting or subleasing the unit.
The agreement shall also require the owner of the affordable unit to submit an annual report to
the City Manager, in a format approved by the City. The report shall include, but not be limited
to the following information: an identification of the affordable units within the project; the
monthly rents charged and proposed to be charged; vacancy information for the prior year;
and the monthly income for tenants of each affordable unit throughout the prior year.
C. Ownership Units; Occupancy; City’s Right of First Refusal. Agreements for ownership
units shall specify that the inclusionary units must be occupied by the owner or owners and
may not be leased or rented without the written approval of the City. The resale restrictions
shall provide that in the event of the sale of an affordable unit, the City shall have the right to
purchase any affordable owner-occupant unit at the maximum price that could be charged to
an eligible household.
D. Selection Criteria. No household shall be permitted to occupy a unit that is required
under this cChapter to be affordable unless the City or its designee has approved the
household’s eligibility. Eligible potential occupants of affordable units will be qualified on the
basis of household income, the median combined household income statistics for Alameda
County published periodically by the California Department of Housing and Community
Development, all sources of household income and assets, the relationship between household
size and the size of available units, and any further criteria required by law as defined by this
Chapter. The developer shall use an equitable selection method established in conformance
with the terms of this chapter. The selection criteria for a qualified household may not
distinguish between adults and children. Selection of qualified person should be based on
priorities established using the point system described below:
• Employed within the boundaries of the City of Dublin (3 points maximum, one per
household member)
• Public Service employee working in the City of Dublin (1 additional point)
• Dublin resident (3 points maximum, one per household member)
• Seniors (1 point, one per household)
• Permanently disabled (1 point, one per household)
• Immediate family member of Dublin resident (1 point, one per household)
• Required to relocate from current Dublin residence due to demolition of dwelling or
conversion of dwelling from rental to for-sale unit (1 point, one per household)
To qualify as a “Public Service Employee”, the person shall be employed by a Public Agency.
716
To qualify as “Employed within the boundaries of the City of Dublin”, the person shall have been
employed within the City of Dublin for at least six months.
To qualify as a “Dublin resident,” the person shall have been a resident of the City of Dublin for
at least a one-year period prior to the eligibility determination. Rev. Ord. 8-05 (March 2005);
Ord. 1-03 (January 2003); Ord. 8-02 (May 2002)
8.68.060 Affordable Unit Credits.
A. Creation. Affordable unit credits may be created by the City Council. One affordable unit
credit certificate shall be issued for each affordable unit constructed in excess of the number of
affordable units required to be constructed for the project by Sections 8.68.030A and
8.68.030B. The certificate shall designate a specific income category (i.e., very-low-, low-, or
moderate-income) and number of bedrooms for which they are issued.
B. Ownership and uUse of cCredits. Affordable unit credit certificates are issued to and
become the possession of the project owner, who may then use them to satisfy the
requirements of this cChapter for another project in the City. If a project owner proposes to sell
credit certificates, the parties shall first obtain the consent of the Community
DevelopmentFinance Director, who will document the transfer by certificate number. Rev. Ord.
1-03 (January 2003); Ord. 8-02 (May 2002)
8.68.070 Incentives to Encourage On-Site Construction of
Affordable Units.
The City may, but shall not be required to, offer incentives or financial assistance to encourage
the on-site construction of affordable units in excess of 12.5% of the total number of affordable
units required by this Chapter to be included in the project to the extent resources for this
purpose are available and approved for such use by the City Council or City Manager. Such
incentives may include, but shall not be limited to, the following:
A. Fee Deferral.
1. Development Processing Fees. The City Manager may approve deferred payment of
City processing fees applicable to the review and processing of the project. The terms and
payment schedule of the deferred fees shall be subject to the approval of the City
Manager.
2. Development Impact Fees. The City Council may authorize the deferred payment of
development impact fees applicable to the affordable units. Approval of this incentive
requires demonstration by the Applicant that the deferral increases the project’s
feasibility. The applicant must provide appropriate security to ensure future payment of
such fees.
717
B. Design Modifications. The City Council may approve design modifications to affordable
units that increase the feasibility of the construction of affordable units, including but not
limited to, the following:
1. Reduced lot size.
2. Reduced setback requirements.
3. Reduced open space requirements.
4. Reduced landscaping requirements.
5. Reduced interior or exterior amenities.
6. Reduction in parking requirements.
7. Height restriction waivers. Rev. Ord. 1-03 (January 2003); Ord. 8-02 (May 2002)
8.68.080 Inclusionary Zoning In Lieu Fees Fund.
The fund previously known as the “Inclusionary Zoning In Lieu Fee fund” is hereby renamed the
“Affordable Housing Fund” (“Fund”) and all In Lieu Fees shall be deposited into the Fund. In Lieu
Fees shall be deposited into a fund known as the “Inclusionary Zoning In Lieu Fees Fund”
(“Fund”).
A. Use. All monies in the Fund, together with any interest earnings on such monies less
reasonable administrative charges, shall be used or committed to use by the City for the
purpose of providing very low-, low-, and moderate-income ownership or rental housing in the
City of Dublin.
B. Annual rReport. The City Manager shall prepare an annual report to the City Council
identifying the balance of monies in the Fund and the affordable units provided and any
monies committed to providing very low-, low-, and moderate-income housing. The annual
report shall also include a review of administrative charges. Rev. Ord. 1-03 (January 2003); Ord.
8-02 (May 2002)
8.68.090 Violations.
It shall be unlawful for any person, firm, corporation, partnership or other entity that is subject
to this ordinance pursuant to Sections 8.68.030A and 8.68.030B to violate any provision or to
fail to comply with any of the requirements of this cChapter. A violation of any of the provisions
of or failingure to comply with any of the requirements of this Chapter shall constitute a
misdemeanor; except that notwithstanding any other provisions of this Code, any such
violation constituting a misdemeanor under this cChapter, may in the discretion of the
718
enforcing authority, be charged and prosecuted as an infraction. Any person convicted of an
infraction under the provisions of this Code shall be punishable as provided by the Government
Code of the State of California. Rev. Ord. 1-03 (January 2003); Ord. 8-02 (May 2002)
8.68.100 Enforcement.
A. General. The City Manager shall enforce this cChapter, and its provisions shall be binding
on all agents, successors, and assigns of an applicant. The City Manager may suspend or revoke
any building permit or approval upon finding a violation of any provision of this cChapter. No
land-use approval, building permit, or certificate of occupancy shall be issued for any
residential development unless exempt from or in compliance with this cChapter. The City may
institute any appropriate legal actions or proceedings necessary to ensure compliance
herewith, including, but not limited to, actions to revoke, deny, or suspend any permit or
development approval.
B. Excessive rRents/lLegal aAction. If the City Manager determines that rents in excess of
those allowed by operation of this cChapter have been charged to a tenant residing in an
affordable unit, the City may take appropriate legal action to recover, and the project owner
shall be obligated to pay to the tenant, or to the City in the event the tenant cannot be located,
any excess rents charged. Rev. Ord. 1-03 (January 2003); Ord. 8-02 (May 2002)
8.68.110 Appeals.
Decisions of the City Manager under this Chapter may be appealed as provided in
Chapter 8.136. Rev. Ord. 1-03 (January 2003); Ord. 8-02 (May 2002)
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Attachment 4
STAFF REPORT
CITY COUNCIL
Page 1 of 3
Agenda Item 7.1
DATE:August 15, 2023
TO:Honorable Mayor and City Councilmembers
FROM:Linda Smith, City Manager
SUBJECT:Inclusionary Zoning and In-Lieu Fee Feasibility Study and Commercial Linkage Fee Nexus StudyPrepared by:Jason Earl,Senior Management Analyst
EXECUTIVE SUMMARY:The City Council will receive a report on the Inclusionary Zoning and Affordable Housing In-Lieu Fee Feasibility Study and the Commercial Linkage Fee Nexus Study. The City Council will be requested to provide feedback and direction on key policy decisions. This feedback will be used to prepare updates to the Inclusionary Zoning Regulations, Affordable Housing In-Lieu Fee, and Commercial Linkage Fee programs in accordance with the City’s Two-Year Strategic Plan. The updates to these programs will be considered for adoption at a future meeting.
STAFF RECOMMENDATION:Receive the report and provide feedback and direction.
FINANCIAL IMPACT:The cost for this project will be charged to the City’s Affordable Housing Fund. There are sufficient funds allocated in the Fiscal Year 2023-24 Adopted Budget for this purpose.
DESCRIPTION:BackgroundThe City of Dublin Two-Year Strategic Plan includes Strategy 2: Housing Affordability, with the following two specific objectives:
Objective 2.b: Ensure the City’s inclusionary zoning regulations incentivize targetedhousing production;and
Objective 2.c: Prepare a nexus study to evaluate the affordable housing commercial linkagefee and affordable housing in-lieu fee for for-sale and rental housing.
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Page 2 of 3
The consulting firm Economic and Planning Systems (EPS) was selected through a competitive process to assist Staff with addressing these Strategic Plan Objectives. The City’s current Inclusionary Zoning Regulations (DMC Chapter 8.68) and Affordable Housing In-Lieu Fee were adopted by the City Council on May 21, 2002 (Ordinance 08-02 and Resolution 56-02 respectively). The Inclusionary Zoning Regulations (IZR) has been amended from time to time, while the In-Lieu Fee is adjusted annually on July 1 based on an inflationary index. The IZR apply to projects with 20 or more units. The City’s current inclusionary requirement is 12.5%, meaning that 12.5% of the units in a market-rate residential project are to be set aside as affordable to lower-income households. A developer may satisfy 40% of this obligation through the payment of in-lieu fees. The current Affordable Housing In-Lieu Fee is $241,131 per affordable unit. The Commercial Linkage Fee was adopted by the City Council on May 03, 2005 (Resolution 70-05) and is adjusted each year by an inflationary index. The current fees are shown in Table 1 below. The Commercial Linkage Fee serves to increase funding for affordable housing due to the nexus between non-residential development and the need it generates for affordable housing. Table 1: Commercial Linkage FeeLand Use Category Commercial Linkage FeeIndustrial$0.65Office$1.68Research & Development $1.09Retail$1.35Services & Accommodations $0.57Staff and the consultant team have reviewed these programs, interviewed market-rate and affordable housing developers who are active in the City and the region, and conducted a survey of the inclusionary requirements, In-Lieu Fees, and Commercial Linkage Fees in other jurisdictions to provide context. Market conditions have changed, and development costs have increased since these programs were initially adopted. As a result, it appears that the inclusionary requirements and the in-lieu fee levels are no longer aligned, and the commercial linkage fees are below what other cities are charging.The City Council will receive a presentation that outlines the findings from this review. The presentation will also highlight how the inclusionary requirement and in-lieu fee programs work from a market and economic perspective, and the implications and tradeoffs of updating these programs. Additionally, the results of the Commercial Linkage Fee nexus analysis, current land use categories, and potential changes to the land use categories will be discussed. This will include a review of the maximum fees that the City could charge, a comparison of fees in peer cities, and a discussion of potential approaches to setting these fees since the nexus-based maximums often exceed what most cities want to charge. The City Council will be requested to provide feedback and direction on key policy decisions. This feedback will be used to prepare updates to the Inclusionary Zoning Regulations, Affordable
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Page 3 of 3
Housing In-Lieu Fee, and Commercial Linkage Fee programs for future consideration and adoption.
ENVIRONMENTAL REVIEW:Receiving this informational report and providing direction is not subject to the requirements of the California Environmental Quality Act (CEQA), pursuant to CEQA Guidelines Section 15306 (Information Collection).
STRATEGIC PLAN INITIATIVE:Strategy 2: Housing Affordability.Objective 2B: Ensure the City’s inclusionary zoning regulations incentivize targeted housingproduction.Objective 2C: Prepare a nexus study to evaluate the affordable housing commercial linkage fee and affordable housing in-lieu fee for for-sale and rental housing.
NOTICING REQUIREMENTS/PUBLIC OUTREACH:The City Council Agenda was posted.
ATTACHMENTS:None.
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Attachment 5
STAFF REPORT
CITY COUNCIL
Page 1 of 5
Agenda Item 7.1
DATE:September 19, 2023
TO:Honorable Mayor and City Councilmembers
FROM:Linda Smith, City Manager
SUBJECT:Inclusionary Zoning and In-Lieu Fee Feasibility Study and Commercial Linkage Fee Nexus StudyPrepared by:Jason Earl, Senior Management Analyst
EXECUTIVE SUMMARY:The City Council’s Two-Year Strategic Plan includes a review of the Commercial Linkage Fee and the Inclusionary Zoning and In-Lieu Fee programs. On August 15, 2023, the City Council received an informational report and provided feedback regarding updates to these programs. Staff has further refined this information and is seeking the City Council’s feedback and direction regarding the recommendations. This feedback will be used to prepare updates to the programs that will be brought back to the City Council for consideration at a future public hearing.
STAFF RECOMMENDATION:Receive the report and provide feedback and direction regarding the recommendations presented in this report.
FINANCIAL IMPACT:There are sufficient funds allocated in the Fiscal Year 2023-24 Adopted Budget in the Affordable Housing Funds for this purpose.
DESCRIPTION:BackgroundThe City of Dublin Two-Year Strategic Plan includes Strategy 2: Housing Affordability, which includes the following two objectives:
Objective 2b: Ensure the City’s inclusionary zoning regulations incentivize targeted housingproduction;and
Objective 2c: Prepare a nexus study to evaluate the affordable housing commercial linkagefee and affordable housing in-lieu fee for for-sale and rental housing.
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The consulting firm Economic and Planning Systems (EPS) was selected to assist Staff with addressing these objectives. On August 15, 2023, the City Council received an informational report on the Inclusionary Zoning and Affordable Housing In-Lieu Fee Feasibility Study and the Commercial Linkage Fee Nexus Study. The City Council provided initial feedback and directed Staff to do the following:
Review the overall impact fee burden on non-residential development with adjustments tothe Commercial Linkage Fee.
Provide comparative information about the affordable housing requirements and their impact on production in the Tri-Valley cities.
Lower the threshold for projects that are subject to the Inclusionary Zoning Regulations.The City Council has also prioritized the collection of fees that can be leveraged to facilitate the production of lower income units to satisfy the City’s Regional Housing Needs Assessment (RHNA) while providing on-site units where feasible. The recommendations presented in this Staff Report seek to align the Commercial Linkage Fee, Inclusionary Zoning, and In-Lieu Fee programs with those priorities.AnalysisCommercial Linkage FeeThe Commercial Linkage Fee is a fairly modest tool, in terms of fee revenue generation, the City uses to collect money that can be used towards affordable housing and related programs. The fee is based on the nexus between non-residential development and the need it generates for affordable housing. The maximum amount the City could assess is based on that nexus, while the actual amount assessed is set at the City Council’s discretion. The current fee was adopted by the City Council in 2005 (Resolution 70-05) and is adjusted annually based on an inflationary index. The amount was set to ensure that it does not overburden the economic development priorities set by the City Council. New non-residential development is assessed this fee on a per-square-foot basis at the time a building permit is issued. The amount collected is based on the category of development. Since 2015, the City has collected $779,141, the majority of which ($470,114) is attributed to just two projects: the Kaiser Medical Office Building and the Zeiss Innovation Center projects. Table 1reflects the current fee by use category along with the maximum amount the City could assess.
Table 1. Commercial Linkage FeeCategoryMaximum Fee per Sq. Ft.Current FeeCommercial$344 $1.35Lodging$57 $0.57R&D / Office $183 $1.09 / $1.68Industrial$115 $0.65
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The current fee represents 4% to 7% of the total impact fee burden for a commercial project. Table 2 below provides a hypothetical example of increasing the Commercial Linkage Fee to $5 per square foot for a new office development and the impact to the overall impact fee burden.Table 2. Impact Fee Burden
Category ExistingCommercial Linkage Fee
HypotheticalNew Commercial Linkage Fee Existing Impact Fee Burden Hypothetical New Impact Fee Burden Percentage IncreaseOffice$1.68 $5.00 $23.50 $26.80 14%Staff Recommendation:1) Retain the existing Commercial Linkage Fee amount and annual inflationary index; and 2) Combine the Research & Development and Office use categories and set the fee at $1.39 per square foot, which is the average of the current fee for those two use categories. Inclusionary Housing Requirements and In-Lieu Fee AnalysisThe Inclusionary Zoning Regulations (Zoning Ordinance Chapter 8.68) were first adopted by the City Council in 2002 and have been amended periodically. These regulations help to achieve the stated purpose of contributing to the attainment of the City’s housing goals, including the production of units to satisfy the RHNA, by increasing the production of residential units affordable to very low-, low-, and moderate-income households. This includes successfully leveraging in-lieu fees collected through this program to facilitate the production of lower income rental units, including units for special needs populations, and requiring the production of on-site units where feasible. Table 3 provides an overview of key aspects of these regulations.Table 3. Dublin Inclusionary Zoning Regulations Overall Inclusionary Requirement Income Targets(Ownership)Income Targets (Rental)Project Size Threshold Must Build Requirement In-Lieu Fee
12.5%60% Moderate40% Low 50% Moderate20% Low30% Very Low 20 Units 60% of Inclusionary Requirement $241,131 per Inclusionary unitThe current program does not differentiate the overall inclusionary requirement (12.5% or the affordable housing in-lieu fee of $241,131) between projects with ownership and rental units. However, the development economics of these two types of development vary dramatically. The average for-sale, single-family development requires a subsidy of $620,000 to produce an affordable unit under the City’s current inclusionary program. The current in-lieu fee of $241,131 is lower than the subsidy required to build an affordable unit and thus incentivizes the payment of in-lieu fees. However, there is room to increase this fee while continuing to incentivize payment of in-lieu fees. The average subsidy to produce an affordable rental unit under the City’s current inclusionary program is $187,000. Even without the inclusionary requirement, multifamily rental development is at the limits of feasibility, and the subsidy required for affordable rental units pushes that limit even further. Reducing the inclusionary requirement and in-lieu fees would help improve the financial feasibility of such projects.
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Each of the Tri-Valley cities has unique inclusionary zoning regulations which helps it achieve the goals of its community. However, there are certain commonalities, including an average project size threshold of approximately 10+ units, collection of in-lieu fees on a per-square-foot basis, and separate regulations for ownership and rental developments including more of a focus on producing ownership units affordable to moderate income households and production of rental units affordable to very low- and low- income households. Each of the Tri-Valley cities has had unique experience with the production of affordable housing, but generally each has found that itsinclusionary zoning regulations, combined with State laws such as Density Bonus Law, SB 35 and SB 330, have resulted in the production of on-site units and the collection of in-lieu fees.Staff Recommendation:1) Lower the Inclusionary Zoning Regulations applicability threshold to projects of 10+ units; 2) Assess in-lieu fees on a per-square-foot basis for each market-rate unit; 3) Establish separate regulations for ownership and rental developments as follows in Table 4: Table 4. Ownership and Rental Policy RecommendationsOverallVery Low Low Moderate Fee per Sq. Ft. Market-Rate UnitOwnership12.5%0%5%7.5%$9.08 (equivalent to $400,000 per affordable units)Rental 10%0%10%0%$9.17 (equivalent to $236,915 per affordable units)These recommendations align the Inclusionary Zoning and In-Lieu Fee program with the City Council’s priorities. They also continue to incentivize both on-site production of housing affordable to low- and moderate-income households and collection of in-lieu fees that can be leveraged to produce units affordable to lower income and special needs households. The City Council is being asked to provide feedback and direction regarding Staff’s recommendations to be used to prepare updates to the Commercial Linkage Fee and theInclusionary Zoning and Affordable Housing In-Lieu Fee programs. The amendments to the Inclusionary Zoning Regulations require a review and recommendation by the Planning Commission. The updates to these programs will then be brought back to the City Council foradoption at a future public hearing.
ENVIRONMENTAL REVIEW:Receiving this informational report and providing direction is not subject to the requirements of the California Environmental Quality Act (CEQA), pursuant to CEQA Guidelines Section 15306 (Information Collection).
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STRATEGIC PLAN INITIATIVE:Strategy 2: Housing OpportunitiesObjective 2B: Ensure the City’s inclusionary zoning regulations incentivize targeted housing production.Objective 2C: Prepare a nexus study to evaluate the affordable housing commercial linkage fee and affordable housing in-lieu fee for for-sale and rental housing.
NOTICING REQUIREMENTS/PUBLIC OUTREACH:The City Council Agenda was posted.
ATTACHMENTS:None.
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