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Council delays enactment of fee promoting affordable units

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Managing Editor

JULY 13, 2011

Despite the approval of an affordable housing ordinance by the Berkeley City Council last month, a fee that would be imposed on developers unless they create a certain amount of affordable units will not be implemented until at least the end of this year.

The council decided at its meeting Tuesday night not to establish a fee until it can be assessed in the context of other fees — including fees for transportation and child care — with city staff in October, after which a public hearing will likely be held in December.

“You can’t establish one fee out of context from other fees that you are considering,” said Councilmember Laurie Capitelli. “My position has been consistently that until we put the entire package together, we will not be able to give any certainty to a housing provider of what the fees will be.”

At its June 14 meeting, the council approved an ordinance that allows for the creation of an affordable housing fee, though the amount of the fee was not determined at that time because city regulations prohibit the council from imposing a fee without a public hearing.

In 1986, the city adopted an inclusionary housing ordinance, which required that developers make 20 percent of their housing units affordable in new projects. However, this ordinance was struck down for apartments as the result of a 2009 state court ruling prohibiting the city of Los Angeles from mandating that developers provide affordable housing.

In response to the ruling, Berkeley’s new ordinance requires developers to pay a mitigation fee — which could be as high as $34,000 per unit — unless the developers make 10 percent of their units accessible to low-income citizens, in which case the fee would be waived. Money generated from the fee will go toward the city’s Housing Trust Fund, which provides funds for the construction of affordable housing.

Though the affordable unit requirement is lower than it was under the original ordinance, Councilmember Kriss Worthington said it could generate more low-income units because developers will need to make those units affordable to those making at or below 50 percent of the area’s median income, whereas the previous ordinance set the threshold at 80 percent.

Yet Worthington said establishing a fee has been delayed too much.

“There’s no way it should take this long,” Worthington said. “When a policy gets wiped out by a court, you should be able to replace the policy with a legally defensible alternative in a reasonable time.”

Councilmember Jesse Arreguin, who advocated for immediate action on establishing a fee at the meeting, said he was disappointed with the decision.

“The sky is not going to fall,” Arreguin said. “Yes, we certainly need to take into account feasibility, but I believe based on past practice, based on looking on the success of projects … that we have enough info for us to make a decision on whether to proceed with a fee or not.”

Additionally, the council approved the inclusion of conditional language into developers’ use permits stating that any new projects will be subject to the fee once it is established.

Still, Arreguin said it is important to get a fee in place as soon as possible.

“We as a city government have a moral obligation to try and make sure that we have policies to make sure that people with limited means — and all people — can live in our community, and that’s what we’re trying to accomplish with an affordable housing fee,” Arreguin said.

J.D. Morris is an assistant news editor.

JULY 13, 2011