CITYWIDE — City staff will come before the Housing Commission Thursday with recommendations for additional administrative fees for developers that choose to build affordable housing, a move that some believe will stall development in the city.

As proposed, the fees would equate to a $300 initial cost per unit with a $120 annual charge assessed to developers before the housing is occupied.

That would pay for the city staff time it takes to review personal income documentation to ensure that the people moving into affordable housing qualify under City Hall’s income restrictions, said Jim Kemper, housing administrator.

In August, the Housing Division opened its Master Waiting List for all those seeking affordable housing. Over 33,000 people applied to get on the waiting list, which housing officials will use to direct individuals and families to affordable units like those included in new development.

“Projects going forward have to take folks from our list that we’ve income qualified,” Kemper said. “That’s a whole burden of work that staff has taken on with no fee to fund it.”

The Housing Division checks income eligibility for those applicants before sending a developer or owner approximately three names for every opening, Kemper said.

“It’s easier in terms of effectiveness of ensuring that only eligible households get it,” Kemper said. “That’s the reason why we went to the [City Council] in 2009 to change the law. If we take on the responsibility to do that, we feel more comfortable that the right families are in there.”

Prior to the switch, city officials checked up on owners and developers sporadically to make sure that tenants fit the requirements for affordable housing.

The policy resulted in lawsuits against developments like the Arboretum, a 300-unit complex at the east end of the city, when an audit turned up tenants that didn’t meet City Hall’s income requirements.

Settlement agreements with those developments resulted in city audits, but there was no solid policy for city officials to audit all of the now-800 housing units, Kemper said.

“This will allow us to go through them on a more thorough, programmatic basis,” Kemper said. “The housing stock only gets bigger, not smaller.”

The City Council directed staff to draft an ordinance authorizing the fees. The proposal comes with a recommendation for a $300 charge for the initial review of an applicant’s financial wherewithal — based on five hours of staff time at $60 an hour — and a follow-up fee of $120.

The fees represent another barrier not only to affordable housing, but to development in general, said land use attorney Rosario Perry.

In the wake of the weak housing climate, developers are less willing to build apartments and condominiums, particularly when they come with requirements to include very low or moderate income housing units alongside market-rate places.

Developers have the option to build them off-site, but it means they must build larger numbers of affordable housing. They can also opt out and pay a fee; between $27.35 per square foot for apartments and $31.94 per square foot for condominiums as of Aug. 15.

Those fees can come up to many thousands of dollars depending on the size of the development, in comparison to the flat $300 initial fee and $120 annual fee for the monitoring.

Still, it all adds up, Perry said.

“What’s interesting is that no one can tell you that this $300 will do anything one way or another. No one, with any certainty, can tell you that,” Perry said. “We’ve been arguing all along that the low income housing requirements kill housing and makes them financially unbuildable.”

To incentivize affordable housing, builders get the option to build more densely than ordinarily required.

It comes down to a cost-benefit analysis, Kemper said.

“They’re making a financial decision to pay a fee and have all market units or get a density bonus,” he said.

If the Housing Commission approves the fee schedule, it will go before the City Council in November.

ashley@www.smdp.com

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