On May 24, 2022, the City Council adopted Resolution No. 2022-107, approving and adopting the Development Impact Fee Study prepared by NBS, dated April 18, 2022. Development impact fees are imposed on new development projects in the City in order to mitigate the impacts of new development on the City’s capital facilities. The City of Rocklin charges impact fees for several types of facilities, including such facilities as transportation infrastructure, parks and recreation facilities, police stations and fire stations.
At the June 28, 2022 City Council meeting, the City Council adopted the ordinance that established the Park Improvement, Trails, Community and Recreation Facilities, and Public Facilities. These fees will be effective January 1, 2023. Staff reports for the May 24 and June 28 meeting are attached as reference. At the June 28 meeting, staff presented the option to return with a fee waiver program for new affordable housing developments in order to incentivize the creation of more affordable housing in the city, and City Council was receptive to this program.
At the November 8, 2022 City Council meeting, staff introduced an ordinance that proposed a process by which applicants who are constructing affordable housing may receive a reduced rate of Park Improvement, Trail, Community and Recreation Facilities and Public Facility fees that are charged upon issuance of all building permits for development in the city. The November 8 staff report and ordinance are included for reference as an attachment to this staff report. Following questions and discussion, the City Council provided direction to staff to further incentivize the construction of very low and extremely low income units. In order to achieve the City Council's direction, substantive changes were made to the original ordinance presented on November 8. Therefore, the full ordinance is being reintroduced for the first reading at this time.
The proposed ordinance makes the following changes to the version introduced in November:
1. Modifies the definition of an “Affordable Housing Purchase Price” and “Affordable Rent” to include the low income category at a deeper level of affordability. Per the California Department of Housing and Community Development, “Low Income” is categorized by the income limit of 80% of the area median income. Under the definitions in the proposed ordinance, the income limit is set at 60% instead of 80%. The intent is to incentive affordable housing developments to build housing that reaches a lower level of affordability within the “Low Income” category while still allowing flexibility for a variety of affordability levels.
2. Removes the 100% affordability requirement for housing developments. Only those dwelling units that are affordable as defined by the ordinance would be eligible for a reduction of fees.
3. Revises sections 3.16.620 and 3.16.650 to remove mentions of a fee reduction cap and a fee reduction fund, as those provisions are not required for the enactment of the ordinance.
Next Steps
If the City Council approves this ordinance, it will be brought back for a second reading at the January 10, 2023 City Council meeting, at which time a resolution establishing the discounted rates will also be brought for City Council consideration.
The base fees for reduction are based on the original impact fees that were established at the June 28, 2022 City Council meeting. The reduction amounts will be set by resolution which will be brought for City Council consideration at the second reading of this ordinance. The intent of the resolution will be to establish a reduction in fees for housing developments with affordable housing to receive a reduced development impact fee rate similar to those before the January 1, 2023 increase.