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Berkeley City Council set to consider new housing density bonus rules

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APRIL 26, 2015

Berkeley City Council will consider a recommendation Tuesday that intends to give residential developers more incentive to build housing in the city.

The recommendation — put forth by Mayor Tom Bates and Councilmember Laurie Capitelli — would provide developers with another option to the state density bonus law. California law allows developers to surpass the maximum allowed density of a proposed building if they meet certain requirements.

Implementation of state law in Berkeley specifies that residential projects of five or more units qualify for increased density bonuses by meeting one of the three following requirements: reserving 20 percent of total units for lower-income households, 10 percent of units for very low income households or 50 percent of units as specially designed accessible housing for senior citizens.

The proposed recommendation adds to this law by also giving developers who want density bonuses the option of paying an in-lieu fee to the city’s Housing Trust Fund, which sets aside money for affordable housing.

Charles Burress, assistant to Bates, said that under the mayor’s recommendation, developers would have stronger financial incentives to build in the city because by paying the in-lieu fee, they could receive the density bonus while still being able to rent out all the units in their development at the market rate.

This is in contrast to the state density bonus, which, by requiring affordable housing to be incorporated into new developments, requires a number of units be rented out at rates lower than market rates.

According to the recommendation, developers of rental and condominium projects would pay $10,000 per base unit in addition to the $20,000 affordable housing mitigation fee; the fees wouldn’t apply to the density bonus units.

The affordable housing mitigation ordinance requires developers to pay a fee to the Housing Trust Fund if they don’t provide a minimum amount of affordable housing.

Councilmember Kriss Worthington criticized the proposed ordinance for not requiring fees to apply beyond a development’s base units and urged amendments to the recommendation.

“It’s tragic because the concept of a city density bonus could be such a good thing, but the way that it’s proposed … is a travesty,” Worthington said.

But according to Burress, the proposed ordinance provides a new avenue for funds to go toward affordable housing by creating a new way for money to go into the Housing Trust Fund.

Under the state bonus law, developers who opt to qualify for the bonus by adding affordable housing units to their development become exempt from paying the city’s existing affordable housing mitigation fee. As a result, the Housing Trust Fund generally does not receive many fees, Burress said.

The council is set to discuss the recommendation at its Tuesday meeting.

Contact Lenin Silva at [email protected] and follow him on Twitter @LeninSilvaNunez.
LAST UPDATED

APRIL 26, 2015


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