Get Full Government Meeting Transcripts, Videos, & Alerts Forever!
Get email alerts on the Housing Policy topic
No spam. Unsubscribe anytime.
Hillsburg directs staff to draft ordinance removing in-lieu fee for very small housing projects
Summary
After hearing builders and housing advocates, the council directed staff to draft an ordinance to eliminate the in-lieu inclusionary housing fee for projects of four units or fewer to reduce cost barriers for small infill development and to return with ordinance language and implementation details.
HILLSBURG — The Hillsburg City Council gave staff direction Tuesday to prepare an ordinance that would remove the inclusionary in-lieu fee for very small residential projects (four units or fewer), a policy change aimed at lowering cost barriers for small-scale infill and accessory dwelling development.
Housing Director Steven Stomayor summarized the staff analysis and said the fee has been one of the largest single cost components on small projects, representing roughly 20— 30% of development fees for some infill builds and amounting to about $890,000 collected citywide since 2019 (staff estimated roughly 30% of that total came from remodels or fractional credits).
Builders and housing advocates urged the council to act. Local builder Jessica Pilling, who said she has an SB9 lot-split project, told the council the in-lieu charge had been a last-minute, project-killing cost when due at permit pickup: "It was a huge deterrent for me. $40,000 on my SB9 project ... we're still sitting here with the building permit in hand because we can't get enough funding just to build our project," she said.
Generation Housing's Summer Lopez also urged the city to consider applying the change to projects up to 10 units and to pair fee changes with a broader review of development fees to align them with housing goals.
Council discussion considered three related policy levers: (1) remove the fee for four or fewer units (the action the council directed); (2) whether to round or retain fractional-unit fees when on-site obligations leave developers owing partial units; and (3) whether to revise the on-site inclusionary threshold (currently 20% on projects of five or more units) to an alternate threshold such as 10 units. The council asked staff to return with ordinance language and analysis and signaled support for the targeted fee removal as a first step.
Why it matters: Council members and participants said small infill projects are important to grow the "missing middle" housing supply. Staff cautioned the move would reduce fee revenue but said it could encourage more small projects to proceed and align local policy with recent state direction to reduce barriers to housing production.
