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Committee holds vote on change to Santa Fe Homes fee-in-lieu, asks for analysis
Summary
Councilors held Ordinance 26-11, which would change the Santa Fe Homes fee-in-lieu calculation from 65% to 30% AMI and raise average per-unit fees by roughly $7,000; sponsors argued fees haven’t kept pace with costs and CDC input was considered, while several councilors requested further economic analysis before a final vote.
The Quality of Life Committee held action on Ordinance 26-11 — a proposed amendment to the Santa Fe Homes program that would revise the fee-in-lieu calculation — after extended discussion about data, market impact and process.
Staff read the ordinance into the record: the amendment would change the fee-in-lieu calculation to use 30% of area median income (AMI) rather than 65% when determining the base fee. A sponsor said the change would "right-size" a fee that has not been adjusted since 2019 and that on average it would raise the fee roughly $7,000 per affected unit.
Director Lamboy described the rationale to the committee, citing the general plan assessment's finding that rents have increased 74% since 2016 and noting that the city has not updated the fee calculation since 2019. "This being your legislation, truly, the only thing it does for now is changes the calculation from 65% of the AMI to 30% of the AMI," Lamboy said, adding that a comprehensive affordable housing plan is forthcoming and that the amendment is intended as an interim step to secure more revenue for housing programs.
Councilor Cassett pressed for empirical analysis and modeling before adopting the change, saying she did not have sufficient information on development costs, market equilibrium and how the change would affect multifamily construction and vacancy rates. Cassett said similar inclusionary zoning efforts in other cities have produced unintended consequences and that the city should not proceed without more detailed economic study. "Without an analysis, I don't feel like I have the information in front of me to determine whether or not I believe this would have the impact on our housing market," she said.
Mayor Garcia and other council members said the Community Development Commission had discussed the proposal and provided feedback; staff said the CDC conversation included a range of views and that the city intends to follow with a broader housing-policy study session. Lamboy repeated that a full affordable housing plan and updates to the land development code are in progress.
After debate, Councilor Cassett moved to hold the ordinance to the July 1 Quality of Life Committee meeting to allow additional analysis and discussion. The motion was seconded, a roll call was taken and the motion passed with recorded yes votes from Councilor Figalli, Councilor Barrett, Councilor Chavis, Councilor Cassett and the Chair. The ordinance will return for further consideration at the committee's July 1 meeting and is scheduled for a final governing-body vote on July 8 unless further amendments are made.
