San Rafael staff warn trust fund revenue is diminished; subcommittee asks for study on alternative funding
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Summary
Housing manager Alexis Taftanian told the subcommittee that revenue to the Affordable Housing Trust Fund has fallen as developers use the state density bonus to build on-site units, limiting in-lieu fee receipts; members asked staff to study alternative funding pathways and to present options to the full council.
Alexis Taftanian, housing manager for the City of San Rafael, told the Economic Development and Housing Subcommittee on March 24 that the city's Affordable Housing Trust Fund has diminished as large projects use the state density bonus to provide on-site affordable units rather than paying in-lieu fees.
"Recently what we've been seeing is that the revenue in that fund has diminished and the pipeline is... diminished," Alexis said, adding that one expected fee source (from projects at build-out) is deferred until certificate of occupancy, leaving staff and council uncertain when revenue will arrive.
Taftanian outlined four funding pathways the city uses: a notice of funding availability (NOFA) through the Affordable Housing Trust Fund, a rolling acquisition application for certain acquisitions, a case-by-case planning/building fee waiver resolution, and an automatic traffic mitigation fee waiver for affordable units. She said last year the council awarded $600,000 to three projects through a NOFA and that prevailing-wage rules can be triggered by certain funding instruments.
Councilmembers pressed staff on alternatives. One member noted the traffic mitigation fee waiver for a recent project amounted to $750,000 and asked whether staff could identify lower-cost ways to show local commitment (letters of support, smaller contributions, or policy changes) without pulling from the general fund. Alexis said staff would research options and bring ideas to the council.
Members also discussed residual-receipts loans and other leverage tools as ways to help projects secure outside financing. Paul Novazio, interim city manager and finance director, and staff emphasized that using general-fund dollars for the trust fund would be a policy change requiring council-level discussion; several subcommittee members said they were hesitant to reallocate general-fund money now but supported a study session.
No formal funding decision was made during the meeting; staff said they will return with additional analysis and staff recommendations for the council to consider.
