Orinda holds study session on inclusionary housing; consultants flag trade-offs between 15% target and project feasibility

The Orinda City Council on July 15 held a study session on whether to adopt an inclusionary housing ordinance (IHO) as part of the city's housing-element commitments and heard a consultant's market and feasibility analysis.

Dave Bergman of Lisa Wise Consulting presented the study, which modeled typical developable projects and tested a 15% inclusionary requirement with affordable units set at 80% of Contra Costa County area median income (AMI). Bergman said the 15% at 80% AMI would meet the Metropolitan Transportation Commission's Transit-Oriented Communities (TOC) policy, a key regional discretionary-funding criterion, but noted that structured parking and the cost of for-sale projects could make some developments financially infeasible. "The study recommends that a 15% inclusionary requirement at 80% AMI is compliant with the MTC TOC policy," he said, while also cautioning that "some individual projects could be financially infeasible, particularly in the downtown core with structured parking requirements." (Dave Bergman)

Consultant and staff discussion also addressed the in-lieu fee used as an alternative compliance mechanism. The analysis identified a theoretical maximum in-lieu fee near $550,000 per required affordable unit (about $69 per net rentable square foot under the modeling assumptions), but noted that MTC's TOC guidance would expect a minimum of about $100,000 per unit for fee-out options. Staff and the consultant advised caution: a very high in-lieu fee could suppress development and a very low fee would generate insufficient funds for off-site or nonprofit affordable projects.

Developers and local stakeholders attending the session urged caution and local calibration. Lafayette-based developer Brian Griggs said Orinda needs projects and cautioned that underwriting assumptions used in the model should reflect Bay Area construction and financing realities. Developer Jeff Stone said the presentation's cost assumptions appeared low compared with recent project experience in the region and urged the council to validate model inputs.

Council reaction was mixed. Some members expressed support for adopting an IHO, within carefully chosen parameters and with flexibility to respond to project feasibility on a case-by-case basis. Council member Iverson said he was inclined to move forward but wanted provisions that allowed project-specific exceptions and careful calibration of the in-lieu fee. Council member Riley asked for more data and suggested the council had to balance community goals for affordable housing with not making development infeasible.

Council did not adopt an ordinance. Staff proposed next steps: prepare a formal recommendations memo incorporating public and Planning Commission feedback, draft a proposed ordinance for council review and return with more detailed options (including a range of inclusionary percentages, recommended thresholds for project size, and draft in-lieu fee calculations). Council members asked staff to consult further with the school district and housing practitioners and to schedule additional briefings before any formal ordinance hearings.

Ending: The study session clarified the trade-off the city faces: aligning with regional TOC goals would push toward a 15% target at 80% AMI, but several council members want flexibility so projects that would not be financially viable can be evaluated without blocking housing production.