City Government, Community, Hayward Upward

New affordable housing requirements for developers

February 13, 2018

New affordable housing requirements for residential developers in Hayward took effect on Feb. 1—including an increase in fees for builders who choose not to include below-market units in their projects.

The amendments to the city Affordable Housing Ordinance (AHO), passed unanimously by the City Council Nov. 28, go into force as council members are weighing additional strategies to enhance housing access and stability for moderate, low and very low-income Hayward residents and people employed here.

Under the amended AHO, residential developers can satisfy city affordable-housing requirements by designating a percentage of units in their projects to be sold or rented at below-market rates; by agreeing to build the below-market units elsewhere; or by paying a fee in-lieu of providing the units. The fee revenue is held in a city Affordable Housing Trust fund, which in turn can be used to subsidize land acquisition and other development costs for affordable housing developers, such as Eden Housing of Hayward.

For developers choosing to make the in-lieu payment, the fee is $18.18 per square foot of habitable space—up from less than $5 per square foot. The increased fee is intended to more closely reflect the actual cost of creating affordable housing at a later date. Developers of high-density projects—those with 35 or more units per acre—pay $15 per square foot. Projects with nine or fewer units also get a discount based on a sliding scale.

Like similar ordinances across the San Francisco Bay Area, the Hayward AHO is one way the city seeks to provide for the housing needs of all economic segments of the community. It is based on findings that market-rate residential development has the effect of driving up land prices and with it the cost of creating housing affordable to lower-income households.