Mountain View commission recommends council adopt changes to Below‑Market‑Rate housing rules

The Mountain View Environmental Planning Commission voted March 4 to recommend City Council adopt ordinance amendments to the city's Below Market Rate (BMR) housing program, after a staff presentation on seven proposed changes and more than two hours of questions, public comment and deliberation.

City housing specialist Anna Reoso opened the presentation by tracing the BMR program's history: "The city's BMR program was originally adopted in 1999 and underwent its first major update in August of 2019," she said, and described the program's core requirement that projects creating seven or more units include on-site BMR units, with smaller projects subject to a fractional in-lieu fee.

Why it matters: The amendments are intended to clarify how developers can comply when they do not build on-site BMR units, to better align fees with construction costs and to incentivize smaller infill projects. Staff said the package is intended to increase predictability for applicants while preserving program goals such as long-term affordability and fair housing outcomes.

What staff proposed: The seven main amendments presented by staff include: (1) requiring 15% of BMR units (one-unit minimum) be accessible; (2) tighter rules and documentation for alternative compliance pathways (land dedication, off-site development, acquisition/preservation) using an in-lieu fee equivalency methodology; (3) replacing CPI with the California Construction Cost Index (CCCI) to escalate fees; (4) cleanup edits and shifting administration to the Housing Department; (5) removing a separate HOA reserve fund because Assembly Bill 572 limits HOA fee increases for deed‑restricted units; (6) a graduated fee reduction designed to make small projects more viable (staff described an initial table and a council referral to analyze extending the approach to projects up to 10 units); and (7) allowing routine BMR guideline updates to be made administratively rather than by council resolution.

On alternative compliance, staff said applicants must show that an alternative is economically equivalent to providing on-site units and provide a feasibility and financing analysis, developer contributions, and a complete compliance plan. For off-site development, staff proposed reducing the off-site requirement from 20% to 15% and adding location and amenity-access rules (for example, if off‑site units are within 750 feet but lack equivalent amenities, off‑site residents must be granted access to market-rate amenities).

Questions and concerns: Commissioners probed how the local changes interact with the state's density bonus law (waivers vs. incentives/concessions), whether amenity-sharing could be treated as a concession, and whether permanence could be shortened for financing. Staff and the city attorney explained that density bonus rules constrain what can be waived and that financing considerations may require minimum terms (for example, typical tax-credit deals have 30–55 year restrictions). The city attorney also cautioned that state law requires the ordinance to include alternative compliance options, so the city's authority to categorically reject alternatives is constrained; commissioners asked staff to develop objective criteria for evaluating proposals and partners.

Public comment: Four people spoke during public comment. Builder and resident Ben Tinklinberg said the city's combined fees are a major barrier to middle-income projects, warning that "the fee burden in Mountain View tends to be around $350,000 per unit," and argued that high fees can prevent modest projects from being built. Another small-scale developer asked the commission to extend the graduated fee reduction to projects of up to 10 units to align with SB 684 and ministerial lot-split opportunities.

Funding context: Staff said the city has leveraged roughly $150 million in funding toward fully affordable projects in the last decade and that since the BMR program's start in 1999 the city has collected approximately $118 million in in-lieu fees; staff described most in-lieu revenue as loaned to affordable developers and cited a $4 million allocation for acquisition/preservation work as an example.

Commission action: After deliberation, the commission voted to recommend that City Council adopt the ordinance amendments to Chapter 36 with an added EPC recommendation. The EPC asked that the ordinance or accompanying administrative guidelines include explicit, objective partner‑qualification criteria within alternative compliance procedures and that staff return with additional analysis to ensure off‑site alternative compliance options do not exacerbate concentrations of low‑income households. The motion passed 6–0 with one commissioner absent.

Next steps: Staff told the commission the ordinance would go to City Council for first and second readings in May and June, with an effective date to follow in July. Commissioners asked staff to return with more granular analysis of where off-site alternatives would be permitted and to refine objective evaluation criteria for proposed partners and financing plans.

What was not decided: The Commission did not change the basic 15% accessibility proposal or adopt a final rule on expanding the graduated fee reduction to 7–10 unit projects; staff will return with additional analysis and administrative guidelines where appropriate.

The commission adjourned at about 9:22 p.m.