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Mill Valley planning commission weighs lowering inclusionary housing rates, exempting very small projects
Summary
Planning staff presented a draft ordinance that would exempt projects of 2–6 units from building affordable units (instead requiring an impact fee), set an inclusionary threshold at seven units and propose scaled percentages (e.g., 15% for smaller multifamily); commissioners generally favored lowering the current 25% requirement and asked staff for further data and options including fee waivers and rezoning.
Planning staff led a study session on June 10 to solicit commission and public input on proposed changes to Mill Valley’s inclusionary housing regulations, framing the discussion around how to produce more multifamily units while balancing developer feasibility and affordable housing goals.
Planner Danielle Dowdy reviewed local housing context, noting that about three‑quarters of Mill Valley’s housing stock is single‑family and that the city has historically produced few multifamily permits. She recounted the current inclusionary standard—25% of units for projects of four or more units, with half of that 12.5% required at low income and the remainder at moderate—and described a draft ordinance that would: exempt projects with 2–6 units from building affordable units but require an affordable housing impact fee (staff described a 1% of construction valuation fee for opt‑out scenarios); set a higher threshold of 7 or more units for a build‑inclusionary requirement; and explore scaled percentages (Dowdy presented 15% for projects of 7–9 units and 20% for larger projects as discussion points).
Commissioners pressed staff on how the proposed percentages align with state density‑bonus law and other state incentives, asked for evidence that such changes spur actual construction in comparable jurisdictions, and requested more granular data (for example, multifamily building‑permit trends, post‑2021 changes in other cities, and AMI rent levels tied to market rents). Several commissioners and public commenters argued that the current 25% rate is too high for Mill Valley’s small‑site market and favored a lower rate—many suggesting 15%—and keeping the threshold at seven units so that the regulation still applies to the town’s available parcels.
Members of the public urged bolder measures to increase housing production, recommended linking AMI rent levels to market rent data and suggested considering fee waivers or other incentives to improve project economics. Commissioners expressed support for removing the micro‑unit cap, considering impact fee waivers for small projects (2–6 units), and returning with a package of options and more data, including nexus/build‑permit comparisons from other jurisdictions.
The session was explicitly advisory; no formal ordinance vote occurred. Staff said it would revise the draft ordinance and return with additional analysis and recommended next steps, including potential council items on rezoning and process streamlining to facilitate multifamily construction.
