At Monday's meeting, City Council reviewed and made important modifications to the Affordable Housing Ordinance, resulting in a reintroduction of the ordinance at the August 7th meeting, with second reading and adoption scheduled for the September 5, 2017 City Council meeting.
The ordinance is aimed at implementing and addressing one of the community's overarching goals for the City: to "encourage the continued diversity of housing, income levels and lifestyles in the community" (Mill Valley 2040 General Plan, Goal #2).
The affordable housing ordinance includes an impact fee to establish an Affordable Housing Trust Fund. All residential development projects with a construction valuation of $100,000 or more are subject to the impact fee. At the August 7, 2017 meeting Council established the impact fee at 1.0% of the construction valuation for projects with a valuation greater than $100,000 (a higher rate of 1.5% to the valuation had been discussed previously). Projects with 4 or more ownership units are required to restrict 25% of the units as affordable pursuant to Mill Valley demographics. Second units are exempt from the impact fee. Council also established a generous grace period (the effective date for the application/collection of the new fee) recognizing that many residents are pursuing project approvals presently and had not factored the new fee into their project finances.
The affordable housing impact fee is anticipated to generate approximately $375,000 a year.
An Affordable Housing Trust Fund is established as part of the ordinance to collect and maintain impact fees separate from other City revenues. All money collected in the Trust Fund "shall be expended exclusively to provide or assure continued provision of affordable housing in the City to meet the housing needs of the City's workforce through acquisition, construction, development assistance, substantial rehabilitation/maintenance, finance, rent or other subsidies, and for costs of administering programs which serve those ends." As an example, the City of Novato recently provided $400,000 to fund the Oma Village project, which includes 14 units of affordable housing.
The Affordable Housing Ordinance will come back to Council for a second reading and adoption at the September 5 meeting. Staff will develop administrative guidelines for the use, disbursement and prioritization of trust funds for public review and City Council adoption.