Loomis planning commission adopts in-lieu fee study for inclusionary housing, asks council to consider broader fee option

The Loomis Planning Commission voted to adopt an in-lieu fee study for the town's inclusionary housing ordinance and sent a separate recommendation to the Town Council asking staff to prepare an amendment to allow in-lieu payments for larger projects.

The study, prepared by AECOM and presented to the commission by consultant Matthew Gurkin, recommends an in-lieu fee calculated by an affordability-gap method: $17 per square foot for for-sale required affordable units and $22 per square foot for rental required affordable units. Christie (last name not provided), Planning Director for the Town of Loomis, told commissioners the fees were developed to apply only to the portion of a development that represents the mandatory affordable units or fractions of units, not to the entire project.

The fee matters because the town's 2021 Housing Element (policy 9) and Ordinance 288 (added as section 11.16 to the municipal code on March 8, 2022) require 10% of units in developments of 10 or more units to be deed-restricted affordable; for projects that create fractional requirements (for example, a 15-unit project requires 1.5 units), the in-lieu fee covers the fractional portion. Christie explained that the ordinance permits payment of an in-lieu fee for projects between five and nine units and for fractional portions above the 10-unit thresholds.

Gurkin said the study used the affordability-gap method, which measures the difference between market-rate unit value and the restricted affordable unit value. He described that approach as lower than an alternative method that would base fees on construction cost: "Another option would be figure out, what it would cost to construct a housing unit and make it affordable. That's a much higher fee. That's a much more expensive, in-lieu fee." He warned the commission the fees established by this methodology likely would not fully fund new construction of affordable units but could be used to preserve or contract with existing properties for long-term affordability.

The consultants and staff illustrated the fee mechanics with examples from the packet: for a for-sale development with an average unit size of 1,800 square feet and a 0.5 fractional obligation, the $17-per-square-foot number would amount to roughly $15,300 for that fractional obligation; for subdivisions where lots are created, a 3-acre lot in the study produced a base fee of $39,100 that applied pro rata to the fractional requirement (a 0.5 fraction would yield $19,550 in that example).

Commissioners asked about application timing, waivers, off-site options, monitoring and how the fee compares with neighboring jurisdictions. Christie said fee payment would be required as part of project approval and affordable housing agreements, and could be timed before map recordation or as specified in the agreement for an individual project. She clarified off-site compliance should produce benefits within Loomis. On exemptions, Gurkin noted the ordinance already contains a feasibility-based exemption and suggested other possible exemptions (for example, very small units or naturally lower-cost multifamily that meets affordability thresholds) for council consideration.

Public comment included a letter and a live Zoom comment from Jeff Short, who said he had reviewed staff materials and withdrew his written objection for now. Short also urged the commission to consider a larger subsidy-based approach for affordable multifamily production and wrote that many multifamily affordable builders estimate per-unit gaps far larger than what an affordability-gap per-square-foot fee would cover: "I would still philosophically object to the consultants using the affordability gap as the nexus ... I would submit that the more housing is built, that would lessen the affordability gap," he said, and noted multifamily affordable funding gaps he has seen run much higher per unit.

Commission action and next steps: the commission moved and approved the staff recommendation to adopt the in-lieu fee study and fee structure for presentation to the Town Council. The commission also approved a recommendation asking the Town Council to consider amending the ordinance to allow in-lieu payments by projects larger than the current guidance, advancing that amendment to council as a separate, follow-up item. The item will go to the Town Council in March for public advertising and consideration.

Gurkin and Christie said the study includes two memos in the packet (February 2024 and January 2025) explaining fee calculation and application scenarios, and staff noted potential methods to index or update the fee over time (for example, tying to the Consumer Price Index or a construction-cost index).

The commission discussion also noted limits of local authority: paying in-lieu fees does not by itself satisfy state housing production requirements (RHNA) or substitute for building actual affordable units unless the town or a housing partner uses the funds to produce units that count toward those obligations. Christie and commissioners discussed monitoring responsibilities for deed-restricted for-sale units (the ordinance contains a five-year affordability-preservation goal and monitoring obligations), and staff confirmed the town would oversee compliance and monitoring obligations.

The commission adjourned the public hearing after approving the fee study and forwarding the ordinance-amendment recommendation to council. The package the commission approved will be transmitted to the Town Council for formal action and any ordinance changes would require council review and adoption.