Cotati adopts three‑year pilot waiving development impact fees for deed‑restricted multifamily units and incentives for qualifying hotels

Cotati — On Aug. 26 the City Council voted unanimously to adopt a package of development‑impact fee policies intended to accelerate housing production and attract higher‑quality lodging.

The council first approved a three‑year pilot that waives city impact fees for deed‑restricted inclusionary multifamily projects that meet defined criteria including a minimum project size (10 units), a 55‑year deed restriction on affordable units and a cap on eligible waived units (amended by council from 15% to 25% of total units). The policy sets the waiver period to three years from the city’s fee effective date (Oct. 13), requires projects to meet the city’s unmet housing needs and directs staff to use inclusionary/linkage funds to backfill forgone fees where feasible.

Omar Lopez of Generation Housing, who participated by Zoom, urged the council to adopt the change and suggested raising the cap to 20–25% to incentivize more deeply affordable units. “We support resolution A and the 3‑year pilot to eliminate those impact fees for the deed‑restricted inclusionary units,” Lopez said. Several council members agreed to increase the eligible cap to 25 percent to make the incentive more attractive to developers.

The council also adopted a targeted waiver for “high‑quality lodging” projects — defined in the policy as hotels of 25 rooms or more meeting a triple‑diamond (AAA) equivalent and excluding extended‑stay or low‑quality motel products. Staff said the city would track transient‑occupancy‑tax (TOT) revenue and consider TOT as a means to backfill waived impact fees; staff also presented scenario tables showing impact fee payback to the city under different occupancy and ADR assumptions.

Council heard strong public comment on the package. Laurie Alderman objected to using city funds and warned against recurring waivers; union and housing advocates urged the council to use the pilot to deliver more affordable units. "We already have $1,600,000 in the city land fund for the Freebird project... and you're going to waive it," Alderman said during public comment. Generation Housing recommended raising the eligible cap; Council ultimately approved 25% after debate.

The actions carry administrative follow‑ups: staff will detail how fee waivers are validated and tracked, draft administrative procedures for hotel quality validation (including possible third‑party or lender covenants), and present a mechanism for accounting and backfill reporting to council.

Next steps: Staff will implement the pilot program and report back to council on use of inclusionary/linkage funds and the program’s uptake; the pilot will include a 3‑year sunset and administrative reporting requirements.