Berkeley City Council lowers affordable housing fee

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After lengthy discussion, Berkeley City Council voted nearly unanimously to set a new, reduced Affordable Housing Impact Fee at Tuesday night’s meeting.

The fee, which passed by a 6-1 vote, lowers the amount of the previous Affordable Housing Mitigation fee approved by the council last October from $28,000 to $20,000 per apartment unit, which some council members hope will provide a further incentive for development in Berkeley and bolster the city’s fund for low-income housing development.

Currently, developers in Berkeley must make 10 percent of their apartment units affordable to low-income tenants or pay a fee to the Housing Trust Fund, a pool of federal, state and local funds for financing the development of long-term affordable housing.

Since the previous $28,000-per-unit fee was implemented, all of the six new rental housing developments have chosen to include affordable housing in their project proposals rather than pay into the fund.

Mayor Tom Bates noted that he was aware of one development that plans to include an affordable housing component but would rather pay the fee if it were less cost-prohibitive.

Under the terms of the old fee, the more economically sound choice for developers was to include the housing units, according to statistics provided by Berkeley City Planning Director Eric Angstadt.

Without the addition of new fees, the Housing Trust Fund is steadily being depleted and could be bankrupt in a matter of months or years, according to Councilmember Laurie Capitelli.

“If you allow for a reasonable fee and people actually pay it, you could develop more units in a setting where you could provide more services,” Bates said.

Another concern is that these projects will exceed the scale and character of their neighborhoods. Currently, developers can receive a density bonus under state law, an incentive to include low-income housing in project proposals, allowing building heights to exceed zoned limits.

“I would tell developers to take the density bonus,” Capitelli said. “But then we’ll be sitting here with angry residents saying the building is too tall, too wide.”

At the meeting, Housing Advisory Commissioner Marian Wolfe asked the council to wait before reducing the fee, as it had only been in effect for four months.

“This process felt very rushed,” said Commissioner Igor Tregub of the Housing Advisory Commission. “This was an imperfect, piecemeal solution to a problem that does need to be addressed.”

The majority of the council members remain hopeful that the new, lowered fee — which extends to those who submit their plans to the city by October 2014 and are approved by the Zoning Adjustments Board by October 2016 — will make the economics of the choice more equal and encourage some developers to pay into the fund.

Megan Messerly covers city government. Contact her at [email protected].