Background

The City’s first Inclusionary Housing Ordinance (IHO) was adopted in 1999 and since that time, the City has focused on ensuring that a percentage of all new housing units are affordable to income eligible households (Below Market Rate Housing Standards).

More than 1,300 deed-restricted or otherwise secured affordable dwellings have been planned for, entitled, or built since the adoption of the IHO in 1999. The City has committed over 10 million dollars of affordable housing in-lieu funds to assist with the development of over 500 new deed-restricted affordable housing units.

On August 16, 2022, the City Council adopted an update to the City’s IHO (Municipal Code Chapter 17.138) and established a Commercial Linkage fee (Municipal Code Chapter 4.60). The update to the IHO took effect after September 15, 2022. The Commercial Linkage fees and Inclusionary In-lieu fees were imposed through Resolution No. 11349 (2022 Series).

The IHO is one part of an equitable-development strategy to address affordable-housing needs.

Inclusionary Housing Requirements Summary

All nonexempt development projects shall comply with inclusionary housing requirements by;

1. Construct the required number of inclusionary units for residential or mixed-use projects;
   • For Sale Projects = 10% of the units for condominiums or single-unit developments
   • For Rent Projects = 6% of the units for rental multi-unit developments
2. Pay an in-lieu fee* for residential or mixed-use projects;
   • For Sale in-lieu fee = $25 per square foot of habitable space
   • For Rent in-lieu fee = $20 per square foot of habitable space
   • See Section 17.138.080 for fractional in-lieu fee calculations
3. Pay a commercial linkage fee* for new nonresidential structures or nonresidential portions of mixed-use projects;
   • Office, service, hotel, and retail uses: $6 per square foot
   • Industrial and Institutional Uses: $5 per square foot

*These fees are reflected from the 2023-24 Fiscal Year, fees are updated annually on July 1^st, see the City’s Comprehensive Fee Schedule for the latest applicable fees.

Additional Materials

• DRA 2020 Affordable Housing Nexus Study
• EPS Feasibility Study Memorandum – February 2, 2022
• Affordable Housing Standards
• City’s Housing Webpage
• Major City Goals Webpage

Public Input and Review Process

• April 21, 2020 – City Council Nexus Study Agenda Report
• May 4, 2021 – City Council RFP Authorization Agenda Report
• December 9, 2021 – Developers’ Roundtable meeting
• January 11, 2022 – Developers’ Roundtable and Stakeholders meetings
• January 13, 2022 – Housekeys Meet and Greet #1 with affordable housing partners
• January 27, 2022 – Housekeys Meet and Greet #2 with developers
• February 3, 2022 – Housekeys Meet and Greet #3 with Lenders and Real estate professionals
• March 1, 2022 – City Council Study Session Agenda Report
• June 8, 2022 – Planning Commission Agenda Report
• July 19, 2022 – City Council Agenda Report Introducing IHO
• August 16, 2022 – City Council Agenda Report Adoption of IHO

Stay Informed

If you would like to receive continued updates on City initiatives associated with Housing Programs, please sign up for the City's e-notification list and sign up for the groups such as: "Housing and Homelessness" or "Planning and Building" or contact the City’s Housing Team by e-mail: housing@slocity.org.