Inclusionary Housing Ordinance

[ Excerpt from: "City Council Buys Into Plan to Make Condo Developers Pay Up," By Rob Kuznia, Noozhawk, 6/25/2008 ]

... Closing a potential loophole for small-time condominium developers, the Santa Barbara City Council on Tuesday gave the nod to a draft ordinance that would require them to set aside money for building housing for the middle class.

Tuesday’s 6-1 decision was in favor of an amendment to the four-year-old “inclusionary housing” ordinance, which aims to help retain middle-class workers in one of the nation’s most expensive housing markets.

The ordinance requires developers of condo complexes of at least 10 units to set aside 15 percent of them for people with middle-class incomes. Tuesday’s amendment would extend the ordinance to include projects with as few as two units.

Under the new rules, the developers of such projects would not be required to build extra affordable units, but instead must contribute a fee of $17,700 per unit to the city’s affordable housing fund. It turn, the city could use the money for a variety of purposes, such as subsidizing developments for workforce housing.

Voting against it was Councilor Dale Francisco, who... [said of the ordinance] “It is extortion.”

... Council members Das Williams and Helene Schneider said the amendment would close a loophole, noting that the vast majority of condo developers have skirted the requirement of the original ordinance by building fewer than 10 units. Staff members said that 95 percent of the nearly 200 condos added to the market since the original ordinance was passed have been a part of such smaller developments.

“That’s about $3.5 million of inclusionary fees that we just didn’t capture,” Williams said...