Newark council adopts inclusionary housing ordinance, codifies local "live‑work" preference and lowers small‑project exemption

Newark —s City Council on the evening of the meeting introduced and adopted amendments to the city—s affordable housing code to require inclusionary housing and to formalize a local "live‑work" preference aimed at reducing residential displacement.

Housing policy and programs manager Michael Coolum opened the public hearing with a presentation linking the changes to the city—s sixth‑cycle housing element and a displacement study staff commissioned. The study, Coolum said, documented a job‑housing mismatch in Newark from 2010 to 2020, rising rents (for example, asking rent for a two‑bedroom was about $2,300 in 2019) and a loss of lower‑income households. "For every three jobs created from 2010 to 2020, only one home was permitted," Coolum said, summarizing a key finding staff used to justify the proposed preference and inclusionary requirements.

The ordinance package does two things. First, it incorporates a local preference (sometimes described as "live‑work" preference) into the municipal code so that where the city funds or entitles below‑market‑rate (BMR) units, applicants who live or work in Newark will be prioritized "to the extent permissible under the law and any funding source," Coolum said. Staff emphasized this is a preference, not an exclusion: if insufficient eligible applicants come forward, the market‑rate waiting list is used next.

Second, after a feasibility study prepared by Community Planning Collaborative and Century Urban, staff recommended applying a default on‑site inclusionary requirement to residential projects above a size threshold with a 10% set‑aside. Consultants told the council the 10% figure best matched current market conditions while offering a reasonable chance of producing affordable units without broadly stalling development. The draft ordinance also prescribes AMI averaging for rental projects with an average target of 50% area median income (AMI) for rental affordable units and an average up to about 110% AMI for for‑sale affordable units, subject to case‑by‑case adjustments.

Council members raised feasibility concerns, particularly for rental projects, and questioned whether the city—s existing housing impact fee would adequately replace lost affordable units when smaller projects use the in‑lieu fee. Councilmember Bridal said the proposed 20‑unit threshold for the build requirement risked creating an incentive to design 19‑unit projects to avoid on‑site obligations.

After debate, councilmember Bridal moved to amend the small‑project in‑lieu provision so that projects with nine or fewer dwelling units would be eligible to pay an in‑lieu fee rather than build on‑site. Councilmember Jorgens seconded; the motion passed unanimously. The council then introduced and approved the ordinance as amended.

Staff told the council the ordinance would not change existing approvals for projects that had already submitted complete applications; it would become effective in early February 2026 for new applications and include mechanisms for alternative means of compliance (clustered affordable units, off‑site development, site dedication, or a large‑project in‑lieu fee at council discretion). Affordable units subject to the ordinance would be protected by recorded affordability restrictions (staff cited a 99‑year encumbrance) and the city would use Hello Housing and other partners for monitoring and technical assistance.

The council also asked staff to return with additional information, including a progress report to the California Department of Housing and Community Development by April 1 and follow‑up analysis on cumulative fee impacts. Coolum and the consultants said the ordinance would be reassessed every three years and council could approve project‑level alternatives as needed.

The ordinance was adopted unanimously with the amended small‑project threshold; staff said there is roughly $28.8 million remaining in the city—s housing impact fee fund and that the city had already committed funds to several projects, including Timber Senior Housing and other 100% affordable developments.

What happens next: staff will prepare implementing regulations, continue outreach to developers and affordable‑housing partners, and return to council with updates on feasibility, monitoring procedures and any proposed changes to the housing impact fee.