Residential developers in Oceanside would have to include more affordable housing under a proposal supported this week by the city’s Planning Commission.
The commission recommended the Oceanside City Council approve an increase in the minimum requirement for inclusionary housing from 10 percent to 15 percent for developments with three or more units.
Affordable housing within a development must be spread proportionately throughout the project, with sizes equal to market-rate units, and affordable housing residents must have equal access to all amenities provided to market-rate tenants.
Also, accessory dwelling units or ADUs can be designated to satisfy part of the affordable housing requirement.
The commission voted 5-2 Monday, with commissioners Louise Balma and Michael Ogden opposed, to recommend the City Council approve the changes.
Balma said the increase seemed “harsh,” especially with all the other fees developers have to pay. She and others have said they worry that the fees could have a reverse effect on affordable homes by slowing overall construction.
City Council members proposed the increase earlier this year as a way to meet state-mandated goals for affordable housing. In December 2022 the council approved a two-phase increase in the in-lieu fees by developers who don’t include the units within their projects.
Formerly $8.92 per square foot, the in-lieu fee increased to $15 per square foot this year and will rise to $20 per square foot in 2024. Also, the fee will continue to increase annually based on the California construction cost index.
Revenue collected through the fees is placed in a fund that the city uses for other affordable housing projects. At present, the city has about $10 million in the fund, although a single unit of affordable housing costs about $600,000 to build, said Leilani Hines, housing and neighborhood services director.
Affordable housing or in-lieu fees are one of many costs that add to the expense of new housing in California. Altogether, the developer fees can be as much as 20 percent of the cost of a project, Hines said.
