Livermore council permits in-lieu fees for some Shea Aura/Serenity moderate-income for-sale units

The Livermore City Council on June 8 approved a staff-backed amendment to allow alternative compliance (in-lieu fees) for a limited number of moderate-income for-sale units in the Shea Aura and Serenity projects, with council direction that staff negotiate the fee amounts and return with amended affordable-housing agreements.

Assistant planner Emily Leoo summarized the request from Shea Holmes: market conditions have made it difficult to sell the project's moderate-income for-sale units, the applicant sought to satisfy affordability requirements via an in-lieu fee for up to 25 moderate-income units across both projects while keeping the deeper (median-income) affordable units on-site. Leoo told the council the total unit counts would not change and that staff and the Planning Commission recommended approval of the amendment subject to a later negotiated affordable housing agreement.

Developer David Best said the request was driven by buyer demand and finance realities, and that the developer would negotiate in good faith on the fee amount with staff before any change was finalized.

Public commenters were divided. Jane King urged the council not to reduce on-site affordable units, saying that approval would "eliminate 26 affordable units" in the Isabel neighborhood plan area. Other speakers, including residents and housing advocates, said the in-lieu fees could be used to fund deeper-affordability rental projects such as the planned Pacific Avenue senior development.

Staff explained the in-lieu formula is project-specific and noted recent sales history: initial releases in November and December left at least one moderate unit unsold; further releases in March similarly remained unsold months later. Staff added that in-lieu fees can be leveraged with state subsidies and tax-credit financing so that, in practice, each in-lieu-for-sale unit's fee could help fund multiple deeply affordable rental units. As a rough staff estimate, using the subsidy levels in recent projects, one for-sale in-lieu fee dollar-for-dollar could contribute to the financing of roughly two deeply affordable rental units when combined with other funding sources.

Council members pressed on unit mixes, whether concessions in the density bonus limited the city's ability to require specific bedroom mixes on site, and whether the city should hold the developer to the original approvals. Several council members said they wanted staff to seek the highest practical in-lieu valuation and to prioritize that revenue for projects that deliver 100% deeply affordable units (for example, senior housing or special-needs projects). One council member said the decision was a difficult one but concluded the approach was the best path to produce more deeply affordable units in the near term.

After debate and direction on negotiation points, the council voted unanimously to approve staff's recommendation to allow alternative means of compliance for a portion of the moderate-income units, with staff instructed to return with negotiated in-lieu fee figures and amended affordable-housing agreements for formal council adoption.

The council recorded no dissent; the item returns to council for the final affordable housing agreement and fee approval.