“We have a homeless crisis, but let make building houses more expensive just because” - Commifornian politicians.
With an eye on raising capital to fight the local affordability crisis, Burlingame officials agreed to establish an additional fee which developers must pay when building a new residential project.
The Burlingame City Council reached consensus Monday, March 4, that residential development fees should be charged, but temporarily stopped short of formally adopting the policy to make time for additional clarification.
While details over appropriate uses for the revenue collected still need to be hashed out, officials broadly shared their support for the fees which they believe will be a valuable resource in making Burlingame a more affordable place to live.
“It’s a lot of work that we have done to get to this point and I’m pleased with what we have ended up with,” said Councilman Ricardo Ortiz, according to video of the meeting, referencing the months of deliberation which preceded the most recent meeting.
Mayor Donna Colson concurred, and said the money raised also will be useful in maintaining some below-market units.
“It’s a really important tool in the actionable work we’ve done to preserve affordable housing,” she said.
Under the proposal, rental developers seeking to build up to 50 units per acre would be required to pay $17 per square foot; those proposing up to 70 units per acre would be required to pay $20 per square foot; and those proposing more than 70 units per acre would be required to pay $30 per square foot. Condominium developers proposing seven units or more would be required to pay $35 per square foot.
Discounts would be available to developers willing to pay prevailing wage, and exemptions are offered to both rental and condominium projects with fewer units than the threshold triggering the fee obligation.
Developers will also be given an option to construct affordable units in lieu of paying the fees, which officials have emphasized as the preferred outcome of approving the policy. The fee would be waived if 10 percent of a project’s units were set aside at a below-market rate.
Officials focused on setting the correct rate which would encourage builders to construct the affordable units rather than pay the in-lieu fees, since the city’s ability to build units is limited.
With hundreds of units in the development pipeline, officials expect the fees could generate as much as $11 million. That estimated sum would drop if many builders select to build the affordable units rather than pay the fees.
The money generated will be spent in tandem with the revenue brought in with linkage fees, which are similar charges for commercial builders, to construct below-market rate units, finance affordable projects or offer other forms of assistance.
A key reason councilmembers stopped short of formally adopting the fees was Colson seeking clarification to assure that the revenue could be used as emergency rent support for those displaced.
Officials agreed the specific use should be identified in the policy before a decision was made, so the proposal will return for an official decision in a couple weeks.
“It’s better to be more precise and clear on these matters,” said Colson, in her encouragement of staff to clarify specific details of the proposal before its return before councilmembers for final approval.
While officials did not adopt the proposal, consensus was reached that the fees could generate enough money to help those struggling to afford to continue living in Burlingame.
For her part, Vice Mayor Emily Beach expressed optimism over the opportunity presented by the additional income.
“We will see how this works,” she said.
