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Council narrows in-lieu housing fee to encourage smaller for-sale units, adopts 1,500 sq ft threshold
Summary
The council approved a resolution establishing per-square-foot inclusionary in-lieu fees and adopted a 1,500-square-foot threshold to incentivize 'missing middle' for-sale housing, with annual fee adjustments tied to construction cost indices and an exemption continuing for rental projects.
The City Council approved a resolution establishing new in-lieu fees for for-sale residential development and set a policy to encourage smaller for-sale 'missing middle' housing. Planning manager Desmond Perrington presented the study and staff recommendations, and council adopted a 1,500-square-foot threshold to reduce fees for smaller for-sale units.
Perrington told the council the city hired Economic & Planning Systems to analyze fee levels and feasibility across prototype housing products. Staff recommended shifting the in-lieu fee to a per-square-foot basis, aligning with historical practice (roughly 1% of sale price equivalent), and updating the fee annually with the…
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