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City Council exempts Berkeley Student Cooperative from Affordable Housing Mitigation Fee

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OCTOBER 17, 2012

Berkeley City Council voted Tuesday to set a $28,000 Affordable Housing Mitigation Fee that will be imposed on developers unless they create a certain number of affordable units in all new rental housing in the city.

At the meeting, the council heard from more than a dozen members of the Berkeley Student Cooperative, who advocated that the cooperative be exempt from the Affordable Housing Mitigation Fee due to established low housing costs. The council then voted to amend certain aspects of the resolution and establish the amount of the fee for developers.

“Co-ops are unique situations,” said Mayor Tom Bates at the meeting. “When you go to a UC, it costs so much money that being able to have affordable rent is really special and unique … we should be encouraging this kind of development.”

In June 2011, the council approved the creation of an affordable housing mitigation fee ordinance but did not determine the fee at the 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 requires that developers make 20 percent of their housing units affordable in new projects. However, a 2009 state court ruling prohibiting the city of Los Angeles from mandating that developers provide affordable housing struck down Berkeley’s inclusionary housing ordinance.

Berkeley’s new ordinance requires developers to pay the $28,000 mitigation fee unless they make at least 10 percent of the market rate units in new rental housing accessible to low-income citizens, in which case the fee would be waived.

The fee revenue generated will go toward the city’s Housing Trust Fund, which provides funds for the construction of affordable housing.

To be exempt from the fee, documentation of low-income status of tenants must also be provided, which the student cooperatives do not do, according to Abby Simons, vice president of external affairs for the cooperative.

The cooperative does give priority to students who are part of the Educational Opportunity Program — a program that serves low-income Californians who are first-generation college students — through which the financial aid office verifies their income, Simons said.

“Expansion is crucial to fulfilling our mission,” said Phoebe Schmidt, vice president of capital affairs for the cooperative, at the meeting. “This fee would inhibit our ability to expand and be counterproductive to the spirit of the resolution.”

While the majority of the council supported exempting the student cooperative from the fees, they also recommended establishing a general criteria to clarify which groups would be exempted in the future.

Daphne Chen covers city government. Contact her at [email protected].

OCTOBER 17, 2012

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