Union City will discuss this week an affordable housing nexus study that purports to support fees on new residential development ranging from $25.50 per sq. ft. to $42.50 per sq. ft., depending on housing type. The Union City City Council will discuss the analysis during a public hearing on Feb. 28, 2017, and decide whether or not to change the way it collects affordable housing subsidies from residential developers. However, the city’s existing costly inclusionary program means the proposed fee structure will not necessarily result in higher costs for market-rate residential developers. Staff recommends the city maintain its existing 15 percent inclusionary requirement for market-rate projects of seven or more units but convert the in-lieu fee of $180 per sq. ft. charges on only the affordable units that would have been built to a fee of $20 to $22 per sq. ft. levied on all units. Developers would still have the option to build the units or pay the fee. For a 100-unit single-family subdivision with 2,000 sq. ft. homes, this would mean a drop in total optional in-lieu fees from $5.4 million to $4.4 million. The proposed fee also matches that of neighboring cities Fremont and Newark. Staff is also recommending the city adopt a fee of $12 per sq. ft. on all new rental residential development, which currently pays no fee. However, despite a companion commercial nexus study that supports fees as high as $250 per sq. ft. on new retail projects, staff is not recommending the city establish an affordable housing impact fee on new business construction. For questions or comments, contact BIA’s Lisa Vorderbrueggen at lvorderbrueggen@biabayarea.org or 925-348-1956. Click here to view and download the agenda and staff report.
