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Welcome!
Single-family redevelopment in the city often removes a smaller, relatively affordable home and replaces it with a large expensive home. Similarly, substantial additions effectively replace more affordable smaller homes with larger more expensive homes, reducing affordability. This type of development is not subject to the city’s existing Inclusionary Housing (IH) regulations and are not required to contribute toward affordable housing in the community. An impact fee could address shortcomings in the IH program and would ensure equity in how residential development and additions contribute to affordable housing in the community.
The recently completed Nexus Study finds that replacement homes and substantial additions in the community contribute to the need for affordable housing. Based on these findings the consultant recommends implementing an impact fee on these types of development.
What is Being Considered?
Demolition and Replacement of Single-Family Homes
Establishing one per-square-foot fee for housing demolition and replacements projects under four units.
The fee would be no more than $15 per square foot of newly added floor area.
An impact fee would result in equity between homes built on a vacant lot and replacement homes. (Someone who builds a home on a vacant lot in the city is required to pay a contribution to the city’s affordable housing fund at the rate of $15.34 per square foot based on 2025 rates).
Substantial Additions to Single-Family Homes
Establishing one per-square-foot fee for significant additions to homes.
The fee should be no more than $15 per square foot of newly added floor area.
Exemptions for smaller projects resulting in less than 500 net new square feet.
Affordable Housing Fund
Funds collected from a possible impact fee would be placed in the city’s affordable housing fund. Monies received into this fund are restricted solely for the construction, purchase, and maintenance of affordable housing and for the costs of administering programs related to affordable housing.
Project History
The need to examine demolitions and replacements of single-family homes and/or significant additions was discussed as a priority by City Council in 2023. The city selected Gruen Gruen + Associates in October of last year to provide research and analysis services to explore the extent that replacement homes and substantial additions to homes contribute to the need for affordable housing.
Impact fees are used in the city to address the impacts of new development. An impact fee must be based on a study that establishes the nexus between the impact of development, amount of the fee, and how the funds will be spent. An impact fee is sometimes referred to as a linkage fee since they attempt to link the production of market-rate real estate to the production of affordable housing.
Staff is specifically looking for feedback on the following questions:
An addition for an accessory dwelling unit (ADU) of less than 500 square feet would be exempt. Should an impact fee apply to an accessory dwelling unit (ADU) if it is part of a replacement home or large addition of more than 500 square feet?
Should homes under a certain size be exempt? If yes, what size should that be?
Should small home additions be exempt? The consultant recommends 500 square feet. Does that feel too high or too low? Why?
The consultant also recommends a maximum fee of $15 per square foot. For comparison, the affordable housing linkage fee on new office space is $32.46 per square foot. Does this seem reasonable? If not, why?
Welcome!
Single-family redevelopment in the city often removes a smaller, relatively affordable home and replaces it with a large expensive home. Similarly, substantial additions effectively replace more affordable smaller homes with larger more expensive homes, reducing affordability. This type of development is not subject to the city’s existing Inclusionary Housing (IH) regulations and are not required to contribute toward affordable housing in the community. An impact fee could address shortcomings in the IH program and would ensure equity in how residential development and additions contribute to affordable housing in the community.
The recently completed Nexus Study finds that replacement homes and substantial additions in the community contribute to the need for affordable housing. Based on these findings the consultant recommends implementing an impact fee on these types of development.
What is Being Considered?
Demolition and Replacement of Single-Family Homes
Establishing one per-square-foot fee for housing demolition and replacements projects under four units.
The fee would be no more than $15 per square foot of newly added floor area.
An impact fee would result in equity between homes built on a vacant lot and replacement homes. (Someone who builds a home on a vacant lot in the city is required to pay a contribution to the city’s affordable housing fund at the rate of $15.34 per square foot based on 2025 rates).
Substantial Additions to Single-Family Homes
Establishing one per-square-foot fee for significant additions to homes.
The fee should be no more than $15 per square foot of newly added floor area.
Exemptions for smaller projects resulting in less than 500 net new square feet.
Affordable Housing Fund
Funds collected from a possible impact fee would be placed in the city’s affordable housing fund. Monies received into this fund are restricted solely for the construction, purchase, and maintenance of affordable housing and for the costs of administering programs related to affordable housing.
Project History
The need to examine demolitions and replacements of single-family homes and/or significant additions was discussed as a priority by City Council in 2023. The city selected Gruen Gruen + Associates in October of last year to provide research and analysis services to explore the extent that replacement homes and substantial additions to homes contribute to the need for affordable housing.
Impact fees are used in the city to address the impacts of new development. An impact fee must be based on a study that establishes the nexus between the impact of development, amount of the fee, and how the funds will be spent. An impact fee is sometimes referred to as a linkage fee since they attempt to link the production of market-rate real estate to the production of affordable housing.
Staff is specifically looking for feedback on the following questions:
An addition for an accessory dwelling unit (ADU) of less than 500 square feet would be exempt. Should an impact fee apply to an accessory dwelling unit (ADU) if it is part of a replacement home or large addition of more than 500 square feet?
Should homes under a certain size be exempt? If yes, what size should that be?
Should small home additions be exempt? The consultant recommends 500 square feet. Does that feel too high or too low? Why?
The consultant also recommends a maximum fee of $15 per square foot. For comparison, the affordable housing linkage fee on new office space is $32.46 per square foot. Does this seem reasonable? If not, why?
