OCEANSIDE — The City Council will soon decide on raising in-lieu fees for developers who don’t meet the minimum threshold of affordable units in a housing project.
A split majority of the Planning Commission voted in support of the staff’s recommendation on Nov. 21 to make several changes to its Inclusionary Housing Ordinance, including raising the city’s in-lieu fee rate from $8.96 to $15 per square foot.
The ordinance, which serves as a tool for the city to help meet its regional and state housing goals, requires developers building residential projects with three or more units must reserve 10% of those units for low or moderate income residents.
However, a developer may opt to pay an in-lieu fee as an alternative to building more affordable units.
The proposal, which would nearly double the current in-lieu fee rate, will happen over a two-year phase by raising the price in the first year to $10 and then to $15 the second year.
Prior to the Planning Commission’s recommendation, the city’s Housing Commission recommended raising the in-lieu fees to $25 per square foot without a phased approach. The Housing Commission also recommended increasing the term of affordability from the standard 55 years to 99 years.
An analysis by consultant David Paul Rosen & Associates justified increasing the in-lieu fees to between $30 and $45 per square foot. According to city staff, current in-lieu fees in North County range from $15 in Carlsbad to $32 in Del Mar.
While some commissioners were amenable to increasing the in-lieu rate to $25, the majority of commissioners opted to go with staff’s recommendation.
Commissioners Louise Balma, Thomas Morrissey, Jeff Symons and Susan Custer voted in support of supporting staff’s recommendations while Tom Rosales, Kevin Dodds and Jay Malik voted no.
The overall goal of the Inclusionary Housing Ordinance is to encourage developers to build more affordable housing throughout the city.
“We can’t just rely on people who can afford to stay here,” Dodds said. “We need to do more.”
Oceanside follows Carlsbad, which increased its in-lieu fees to $15 per square foot earlier this year.
The ordinance also allows other alternatives to developers like joint ventures of multiple parties, purchasing of credits in another development, and purchasing and rehabilitating existing market rate housing. Staff also recommended additional changes to the ordinance, such as ADUs and preserving existing affordable housing set to expire, as more alternatives for developers to build new affordable units.
“The current ordinance doesn’t provide a lot of pathways to building more affordable housing,” said Housing and Neighborhood Services Director Leilani Hines.
Staff is also recommending zoning and code amendment changes that would remove concessions to residential projects that are larger than the city’s base density as the State Density Bonus Law now covers them.
“We want our Inclusionary Housing to be consistent with all of the different programs that are out there and consistent with state law,” Hines said.
The City Council will decide on the changes Dec. 7.
