Campbell hears housing options: fee waivers, longer entitlements and ADU simplification proposed

City staff presented a study session to the Campbell City Council on Aug. 19 outlining policy options to accelerate housing production amid rising costs and tighter financing.

Community Development Director Robbie told the council Campbell retains a strong housing element and a pro‑housing designation but is permitting fewer high‑density units than planned because of higher interest rates, construction costs and reduced regional and state funding. Staff reported 207 units permitted to date, including 86 below‑market‑rate units, but said the current pipeline is unlikely to meet the city’s allocation under existing assumptions.

To respond, staff proposed three buckets of actions: (1) targeted support for 100% affordable projects — e.g., extend approval/entitlement periods from three to five years, consider deeper park or building‐permit fee subsidies beyond the current 50% reduction in the Affordable Housing overlay, and waive ground‑floor commercial requirements outside downtown; (2) consider targeted upzoning and monitor state legislation such as SB 79 that could require higher densities near transit; and (3) expand support for missing‑middle housing and accessory dwelling units (ADUs) by simplifying ADU categories and adjusting the inclusionary fee rules that affect very small projects.

Developers and housing advocates who spoke during public comment largely supported staff’s proposals. Andy Leaf of Charities Housing said a 100% waiver of park impact fees would amount to roughly $1,000,000 in soft financing for their project and could be the difference in securing state tax credits. Representatives from VTA, Path Ventures and Related California said the proposed waivers, longer entitlements and ground‑floor commercial waivers would materially improve feasibility for the Winchester transit‑oriented development and other 100% affordable projects.

Other commenters — including property owners and small‑project developers — urged the council to allow large projects and to consider fee‑in‑lieu changes that could increase the housing trust fund more quickly. Housing advocates warned that inclusionary and impact fees have made many multifamily projects infeasible under current market conditions.

Council members debated the trade‑offs: some favored extending entitlement timelines and waiving ground‑floor commercial requirements for qualifying projects, while several expressed caution about additional fee waivers because of impacts on park and CIP funding. A few members signaled support for raising the fee‑in‑lieu threshold for 7–9‑unit projects to 10 units so small projects would pay into the housing trust fund rather than be required to provide an on‑site unit; staff estimated that change could bring roughly $700,000 per small project and potentially several million dollars to the trust fund within a few years if several projects opted in.

Staff summarized council direction as generally supportive of studying the 7–9 unit fee‑in‑lieu threshold and noted limited interest in broad additional fee reductions at this time. Staff will return with more detailed financial analyses, options for subsidy sources, and draft ordinance language if council wishes to pursue any of the proposals. No ordinances, rezones or fee changes were adopted at the meeting; the item was a study session to provide policy direction.