San Ramon Council Approves Fee Waivers For Affordable Housing

SAN RAMON, CA — The San Ramon City Council approved a resolution Tuesday that will remove millions of dollars in impact and service fees for housing developments where 100 percent of units are affordable to households making 80 percent of the area median income or lower.

Four council members – Vice Mayor Sridhar Verose, Scott Perkins, Mark Armstrong, and Sabina Zafar – voted in favor of the resolution. Mayor Dave Hudson was not present.

City staff recommended the resolution as a way to help meet its required Regional Housing Needs Allocation (RHNA) numbers by incentivizing the construction of affordable housing units, particularly for city workers like teachers, police officers, and firefighters. The resolution will remove a number of fees from the rare project that contains only housing deemed affordable for those with incomes deemed “Low,” “Very Low,” or “Extremely Low.” (80-30% of the Area Median Income.)

The waivers would help the city match a number of state and federal credits to help finance affordable housing.

For qualifying developments, the city will waive a number of implementation fees entirely, including:

• City Traffic Impact Fee
• School Age Child Care Fee
• Park and Recreation Facility Impact Fee
• General Plan Recovery Fee

Service impact fee waivers will be capped at 25 percent of the original cost. These include:

• Building Permit Plan Check Fees
• Building Permit Inspection Fees
• Planning Plan Check Review Fees
• Engineering Plan Check Fees
• Engineering Inspection Fees

According to a city staff report, these waivers would mean an estimated $2,537,438 loss from both impact ($2.39 million) and service fees ($146,625) in the case of a hypothetical 100-unit, 1100-square-foot 100 percent affordable housing project. This money would not affect the city’s General Fund, and are instead drawn from the city’s Affordable Housing Trust Fund.

Still, the staff report acknowledged that “the lack of certain Impact Fee from projects that qualify under this Policy could result in certain funding delays or the need for alternative funding sources for those projects that rely primarily on the Impact Fees for funding.”

Even with the waived fees, developers would still be short of money building 100-percent affordable housing, especially when interest rates always fluctuate and construction costs have risen 30 percent from early 2020 to early 2022.

“Even with all the financing mechanisms out there, we still have about a $10 million gap we need to fill. [The proposed policy] would help about $2.5 million worth, so I still gotta go and find the other $7.5 million,” said Le Anne Thomas, an acquisitions manager at Anton Development, which has proposed a 162-unit, 100-percent affordable housing near Morgan’s Masonry Supply on San Ramon Boulevard.

Still, Thomas said the new program would make it more likely that Anton will receive the additional funding it requires. “Providing us this known quantity when we go in looking for sites is invaluable,” she said.

Councilmember Mark Armstrong asked why the program does not require developers to designate RHNA-compliant percentages of Low, Very Low, and Extremely Low Income units in order to qualify for the waiver.

San Ramon Planning Services Manager Lauren Barr said they wanted to grant developers maximum flexibility to be granted funding. “What it was intended to do was give more flexibility in how someone might structure a proposal - for example it could be 60 percent Low, 30 percent Very Low, and 10 percent Extremely Low. That all affects how they qualify for funding sources in terms of the breakdowns they can create,” he said, noting that RHNA categories shift over time.

The only San Ramon resident to comment on the item, a woman under the pseudonym “Taiwan’s A Country,” said that Anton Development is taking money out of the city’s pocket. “This is really not money going to the tenants like what the subject says or misleads people to believe,” she said. “This $2.5 million goes to Anton Development, and I assure you, they are not poor. They should be able to come up with the remainder of that money, and yet they want you to waive $2.5 million that will go to children, that will go to the quality of life of the tenants.”

“This is a tough nut to crack,” Councilmember Armstrong said before voting in favor of the proposal. “You have to balance the revenue, you have to balance the collection of fees, but I think this is such a rare thing when it happens that I think it’s the right thing to do,” he said.

“I see there is going to be fiscal impact, but when we look at the overall picture holistically, it is going to help San Ramon in a big way,” said Vice Mayor Sridhar Verose. “First of all we are going to meet our RHNA numbers, and…I’m looking forward to seeing more workforce live within San Ramon, and also I’m looking forward to more youth coming back to San Ramon.”