Soledad council weighs land donation and higher in‑lieu fee after developer proposal would cut moderate‑income ownership units

Soledad City Council members and staff spent an extended portion of their meeting debating a developer proposal to donate land called Parcel B to the city in exchange for reducing the number of required moderate‑income for‑sale units in a larger residential project.

The proposal would dedicate roughly 0.33 acres of Parcel B to Soledad and accept an in‑lieu fee instead of requiring the original set aside of moderate‑income homeownership units. Beatrice (staff), who presented the plan, said the in‑lieu approach “doesn't have a direct impact to the general fund” and would generate funds for the city's affordable housing goals while giving the city discretion over how the donated land is developed.

Council members said the developer's current cash offer—$300,000, calculated as 12 units × $25,000—was insufficient because it would convert 23 planned moderate‑income ownership units to market rate. Council member Anzaldu Sanchez said, “we're losing 23 moderate units,” and said the city should seek a larger in‑lieu payment and protections for Soledad residents.

Why this matters: the change would shift units originally slated as moderate‑income ownership into market rate or rental product, removing long‑term purchase opportunities for households that do not qualify for lower‑income programs but cannot afford market prices. Several council members framed the proposal as a test of how the city protects the “missing middle” of earners who need moderate‑cost homeownership.

What the council and developer discussed - Land and density: The developer proposed the parcel donation and an access easement; staff said the parcel as proposed could accommodate roughly 12 units under the current layout but could hold more under a future density bonus or if redesigned as three‑story townhomes. The developer's representative (Tom Bridal) told the council a for‑sale, three‑story townhome product of about 10–12 units “is very doable in that space.” - In‑lieu fee math: The developer's proposal set the in‑lieu fee at $300,000 (12 units × $25,000). Council members pressed staff to re‑calculate the fee using the 23 moderate units that would no longer be designated as moderate, which equals $575,000 using the $25,000 per‑unit formula that appears in the staff packet. - Use of funds and marketing: Council members requested that any in‑lieu funds be designated to the city's existing first‑time homebuyer program and that the city work with the developer and potential builders to pre‑market the reallocated ownership opportunities to Soledad residents so local households have first notice. - Timing and related approvals: Council members and staff emphasized the difference between amending the affordable housing plan (a separate, required action) and the current in‑lieu/donation concept; staff said the in‑lieu approach would trigger an amendment to the affordable housing plan and that the specific changes would be documented when that amendment is brought forward.

Council direction and next steps Council gave staff direction—by general consensus rather than a formal roll‑call vote—to return to the City Council on June 4 with a revised in‑lieu proposal. Staff was asked to "ground‑truth" feasibility and to present a number that falls between figures mentioned during the meeting (repeatedly referenced verbally as a range between $4.60 and $5.75 in the discussion). Council also asked staff to show calculations both using the developer's land credit proposal and using the 23‑unit denominator; staff will present the analyses and recommended language for how any approved in‑lieu funds would be allocated, including earmarking for the first‑time homebuyer program and a pre‑marketing plan for Soledad residents.

Dissent and concerns Several council members said the proposed $300,000 would not produce the needed units in a timely way and emphasized that state and federal housing funds are uncertain in the near term. Council members asked staff to return with feasible alternatives, including revised fee formulas and possible product redesigns that could yield for‑sale moderate units.

What was not decided No formal vote to amend policy or to accept the in‑lieu payment occurred at this meeting. The council's direction instructed staff to return with a formal recommendation and supporting economic feasibility analysis for council action on June 4.

Next steps Staff will return to council on June 4 with the requested fee calculations, revised agreement language options, and a proposed mechanism for pre‑marketing or prioritizing purchase opportunities for Soledad residents. If council approves an in‑lieu fee and land dedication later, staff said the action would require an amendment to the city's affordable housing plan and additional implementation steps before any units or funds are deployed.