The Sacramento City Council on Tuesday night enacted new fees on developers aimed at subsidizing affordable housing projects.
Developers will pay $2.58 per square foot of new construction under a new ordinance that revamps the city’s mixed-income housing regulations. Those fees will go into a housing trust fund that city officials said would accumulate $110 million for affordable housing projects over the next 20 years.
The ordinance would apply citywide and supporters said it would lead to affordable housing being constructed throughout the city. The previous ordinance had only applied to “new growth areas,” such as North Natomas, and required developers to build low-income housing in their projects in those areas.
City Manager John Shirey said the old ordinance had the unintended consequence of developers building large low-income housing complexes segregated from the rest of new developments, especially in North Natomas.
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Building organizations and business groups supported the change, saying it will bring consistency to low-income housing rules and would help the city fund projects that might not otherwise get financed after the end of redevelopment subsidies. The fees are the same as those approved last year in Sacramento County.
However, some affordable housing advocates criticized the fee structure, saying it would not generate the revenue needed to construct an adequate affordable housing stock in the city. Those advocates urged the council to impose higher fees, with some arguing developers should be charged at least $4 per square foot.
Darryl Rutherford, director of the Sacramento Housing Alliance, called the new fee “meager” and said it would “fall short of meeting the need of those who make this city strong.”
“This is a sad day for the city of Sacramento,” he said.