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Quality of Life Committee declines immediate adoption of Santa Fe Homes fee-in-lieu change after debate
Summary
After a lengthy debate, the committee voted down a technical amendment to change the fee-in-lieu base from 65% to 30% AMI for the Santa Fe Homes program, citing a need for further economic analysis and community input; the measure now moves to the finance committee.
The Quality of Life Committee considered Bill 20-26-11, a proposed technical amendment to the Santa Fe Homes program that would change the fee-in-lieu calculation from 65% of area median income (AMI) to 30% AMI, on the grounds that the existing ordinance did not reflect earlier administrative practice. Chair Castro framed the measure as a step to capture more revenue for deeply affordable units, but committee members were sharply divided.
Director Chavez told the committee that the change corrects a long-standing technical discrepancy and would increase the fee-in-lieu amounts. "To what it currently is, it would double the fee in lieu," Director Chavez said, describing the proposal as a way to generate capital for units targeted to the lowest-income households.
Opponents urged caution. Councilor Cassett and others pressed for an independent economic analysis and more stakeholder engagement through the planned housing summit before changing the formula. "We haven't done the analysis yet," Councilor Cassett said, arguing the city could create "policy whiplash" and risk slowing production if fees become a disincentive. Councilor Travis echoed the need to bring developers, advocates and housing experts together and said he would not support the change without more data.
Staff presented data and examples during the discussion. A staff presenter showed an example in which a 100-unit proposal would generate roughly $135,000 under the current average fee but about $240,000 under the proposed calculation — an increase of roughly $105,000. Another staff presentation summarized historic program outcomes, noting the city collected about $2.8 million in fee-in-lieu payments since 2016 and that, in that period, several hundred housing units that might otherwise have been built were not developed when developers elected to pay fees instead.
After discussion, Chair Castro called for a roll call vote. The clerk recorded four "no" votes and one "yes," and the motion to adopt the ordinance in committee failed. The chair said the item will continue to the finance committee for further consideration.
Why it matters: Supporters framed the amendment as a fix to a technical inconsistency that would allow the city to capture more funding for very-low-income housing; opponents warned it could reduce new housing production without careful modeling. The failed vote keeps the proposal alive for additional study while avoiding immediate policy change.
Next steps: Committee staff and councilors said they expect the topic to be revisited after the upcoming housing summit and with additional economic analysis; the measure will be considered by the finance committee.
