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Sacramento waives fees on affordable housing projects; how much will it cost?

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Sacramento City Council voted Tuesday to stop charging most city-imposed fees to developers who build new affordable housing.

Starting Dec. 30, developers and nonprofits that build new affordable apartment units and single-family homes will no longer need to pay city fees that go toward services like infrastructure, parks, water and sewer, a city staff report said.

City officials say the measure, which the council passed unanimously, will help aid the city’s housing crisis.

“This is a major fee waiver program but the idea is simple,” Mayor Darrell Steinberg said during a news conference Tuesday. “If you’re willing to come on in and help us build desperately needed workforce and affordable housing, we’re going to give you a significant break on your fees and, in fact, in many instances we’re going to waive the fees.”

The city needs “thousands and thousands” of new affordable housing units to meet the need, according to Tom Pace, planning director.

In the coming weeks, the council plans to consider additional actions aimed to help the city’s housing crisis, such as speeding up the permitting process, Steinberg said.

The change approved Tuesday will save the Capitol Area Development Authority about $400,000 on its new 159-unit development on S Street between 17th and 18th streets called 1717 S Street, said Wendy Saunders, executive director of the authority.

“For me at CADA, we want to be able to take advantage of this many times over,” Saunders said. “We’re hoping we can bring more and more housing to Sacramento with the assistance of the City Council.”

CADA plans to start construction on the project this fall or summer, Saunders said.

Mutual Housing California will save about $450,000 on Lavender Courts, its long-awaited project to build a 53-unit affordable housing development geared toward LGBT seniors between 16th and F streets, said Holly Wunder Stiles of Mutual Housing California.

“We’ve been paused for quite a while due to lack of funding while we look under the bed and in the cooking jar,” Stiles said.

On Tuesday, city staff updated the proposed resolution to include single-family homes, such as the ones Habitat for Humanity builds. They also expanded the opportunity to units not just for low-income tenants, but those with moderate earnings – incomes at 120 percent of the area median or less.

Vice Mayor Steve Hansen said it was important to include those making a moderate income to not leave out the “missing middle.”

“If you’re not extremely low income and you want to live in this community, you work in a restaurant, you have a family, this housing is for you,” Hansen said.

In order to have the fees waived, developers would have to show documentation to prove the rents are going to be restricted for at least 30 years, a staff report said.

The measure will lose the city $900,000 to $1.3 million in revenue annually, based on a projection of 100 new affordable units per year, said Ryan DeVore, director of the city’s community development department.

The staff report suggests the staff re-evaluate the resolution and its financial impacts every three years. Councilman Jay Schenirer suggested the council revisit it more frequently, even annually.

Hansen urged the Sacramento City Unified School District and the Sacramento Regional County Sanitation District and other government agencies to follow suit by waiving their fees for new affordable housing.

“We all as government agencies need to do what we can to slash the barriers to building this important housing so we can get these projects out of the ground and make sure everyone has a home,” Hansen said at the news conference.

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