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Affordable Housing Impact Fee (AHIF) Program
UPDATE AS OF JANUARY 15, 2015

DISCLAIMER
The Housing Department is in the process of developing material to assist interested parties to better understand the City's Affordable Housing Impact Fee (AHIF) Program.  Therefore, the information provided below is neither exhaustive nor final, and visitors are encouraged to return to the Housing Department's website periodically for further updates.  Please see the brochure that provides additional information on the AHIF.

When was the AHIF approved?
On November 18, 2014, the City Council adopted a resolution to establish the AHIF Program and institute a housing impact fee on new market-rate rental housing development in San José. 

What is an Impact Fee?
An impact fee is a onetime payment charged to new construction projects.  The fee is calculated to cover the costs associated with funding capital projects and infrastructure needed due to the impact of new development.

Why was San José's AHIF Program created?
The AHIF on new market-rate rental housing development was adopted by the City Council in order to address the demand for affordable housing that is connected with new market-rate development.

Which projects are subject to the fee?
All market-rate rental housing developments of three (3) or more units that have not pulled all of the project's building permits and received approval to participate in the AHIF's grandfathering provision by June 30, 2016. (see below to determine if the development is eligible for grandfathering)

All new market-rate residential developments will be considered rental until the developer demonstrates that the project is a for-sale development by providing evidence that a bona fide sale of a unit has occurred.

How will the AHIF be assessed/calculated for each project?
The AHIF is $17.00 per net rentable square foot.  Developers will be required to submit detailed information about their projects, including the mix of unit types and the square footage of each unit.  In addition, any and all planning and/or building permits submitted by the developer must include information about the project's mix of unit types (including the square footage of each unit) on the plans and must be authenticated by a licensed engineer or architect.

How will square footage be calculated?
The AHIF will be assessed on net rentable square footage of all finished living space.  The fee will not be assessed on items such as balconies, patios, unfinished garages or outside storage lockers.

When are AHIFs paid?
The AHIF shall be paid prior to the issuance of building permits.

What is a Pipeline Grandfathering provision?
A development project may be exempted from the Housing Impact Fee if it meets the following conditions:

    1.    Prior to July 1, 2016, the development has received approval for one of the following entitlements, and that approval 
           is current and unexpired as of June 30, 2016:
            a.    Planned Development Permit
            b.    Site Development Permit
            c.    Conditional Use Permit
            d.    Special Use Permit;

    2.    The developer will need to submit, and have approved by the Housing Department, a complete Pipeline Application 
           with evidence of the required permit and associated fee by June 30, 2016; and

    3.    Prior to January 31, 2020, the development has received a Certificate of Occupancy for at least 50% of the units in 
           the building.

The fee will mitigate the cost of staff time to track compliance and monitoring.  Applications will be subject to the approval of the Housing Department, and those that are, in the Department's judgment, incomplete will be rejected, and the project will not be grandfathered.

The amount of the Pipeline Application fee (as well as the annual monitoring fee) will be established as part of the City Council's 2015-2016 budget process.  The Housing Department will begin accepting Pipeline Applications in July 2015, by which point the fee will have been established.

How will the money from AHIF be utilized?
AHIF revenue will provide financing for the development of new housing that is affordable to extremely low-, very low-, and moderate-income households and individuals.

How will the AHIF be adjusted over time?
Twelve months after the operative date of the Resolution, and annually after that, the AHIF will increase by 2.4% to address increases in construction costs.

How will the AHIF obligation be codified?
After the entitlement process but prior to the pulling of any foundation or building permit, developers are required to submit a signed Housing Impact Fee Compliance Plan Application to the Housing Department.  The Compliance Plan Application will provide the Housing Department with enough information to calculate the AHIF associated with the development.  The information included in the Compliance Plan Application will be included in the project's conditions of approval.

The Housing Department and City Attorney's Office will draft and record against the property an Affordable Housing Agreement that will codify the AHIF amount, when payment is due, and other program requirements.

The Housing Department will begin accepting Housing Impact Fee Compliance Plans in July of 2015.

How does the AHIF differ from the City's Inclusionary Housing Policy?
The City's Inclusionary Housing Policy remains in effect and requires affordable housing units be provided (or the payment of an in-lieu fee, at the developer's discretion) in newly-constructed for-sale housing projects with more than ten (10) units that are located in Redevelopment Project Areas.  At no time will a developer be asked to satisfy both a requirement of the Inclusionary Housing Policy and Housing Impact Fee Program.  If you have questions regarding which program may apply to a specific project, please contact the appropriate staff listed below.

The Housing Department has provided a flow chart that will assist in determining if a project is subject to either the City's Inclusionary Housing Policy or AHIF.

Where can I find the Program Regulations?
The Housing Department is in the process of drafting the Program Regulations of the AHIF and will upload them to this website once they are completed.

Who can I contact if I have more questions on the AHIF?
To address further questions about the AHIF, please contact Patrick Heisinger in the Housing Department at 408.975.2647 or by email at .

Related Links:
    Adopted Resolution
    Program Regulations (Coming Soon)

Tools and Worksheets
    Pipeline Application (Available after July 1, 2015)


UPDATE AS OF NOVEMBER 21, 2014

The signed City Council resolution establishing the Housing Impact Fee Program is now available.

UPDATE AS OF NOVEMBER 19, 2014


At the City Council meeting on November 18, 2014, the San Jose City Council adopted a resolution establishing a Housing Impact Fee. The substantive content of the motion that was approved on a 7-3-1 vote was, in essence, to "adopt a resolution approving staff's recommendation with the exception of exempting units in Downtown high-rise buildings until June 30, 2021."  The signed City Council resolution will be available in the next few days.

The motion also included direction to staff to investigate a number of follow-up issues, including investigation of a commercial linkage fee and exploration of regional funding opportunities.  The Housing Department anticipates reporting back on those issues in Spring 2015.

UPDATE AS OF NOVEMBER 17, 2014

The Housing Department has prepared and submitted to the City Council a Supplemental Staff Report with regard to the Housing Impact Fee item that will be heard at the City Council (Item 4.5) meeting on November 18, 2014.


UPDATE AS OF NOVEMBER 13, 2014

On November 18, 2014, the San Jose City Council will consider the Housing Department's recommendation to establish a Housing Impact Fee.  The Housing and Community Development Commission will also consider the Department's recommendation at its November 13, 2014 meeting.

UPDATE AS OF NOVEMBER 6, 2014

Final drafts (both dated October 2014) of the Residential Nexus Analysis and the Supplement to the Residential Nexus Analysis, which includes the Financial Feasibility Analysis - components of the City's study of a Housing Impact Fee - are available for public review.

UPDATE AS OF OCTOBER 24, 2014

The Housing Imact Fee Resources provides links to background information on the relationship between housing development and job creation, other jurisdictions housing impact fees, and pros and cons.


Upcoming Planning Commission Meeting - General Plan Text Amendment for Affordable Housing
Date Location Time
Wednesday, November 5, 2014 --
Planning Commission - Text Amendment
City Hall, Council Chambers
200 E. Santa Clara Street
San Jose, CA 95113
 6:30 p.m.

UPDATE AS OF OCTOBER 3, 2014

San Jose's Housing Impact Fee Program draft recommendations and policy alternatives are available for review.

During the month of October, the Housing Department will be conducting outreach meetings with stakeholders and the public to receive feedback on the draft recommendations and policy alternatives.  Staff will be accepting oral comments at the meetings listed below. 
Date Location Time
Thursday, October 9, 2014 -- Housing &
Community Development Commission
City Hall, Room 119-120
200 E. Santa Clara Street
San Jose, CA 95113
5:45 p.m.
Tuesday, October 14, 2014 -- Developer
Stakeholder Meeting
City Hall, Room 120
200 E. Santa Clara Street
San Jose, CA 95113
10:00 a.m. - 12:00 p.m.
Wednesday, October 15, 2014 --
General Public
Bascom Branch Library
Community Room
1000 S. Bascom Avenue
San Jose, CA 95128
6:30 p.m. - 8:30 p.m.
Monday, October 20, 2014 -- General
Public
City Hall, Room 118 -119
200 E. Santa Clara Street
San Jose, CA 95113
6:30 p.m. - 8:30 p.m.
If you have questions on the process, please contact Tom MacRostie by either email at , or by calling 408.975.4449.


UPDATE AS OF SEPTEMBER 24, 2014

The Housing Department is pleased to announce a new series of public outreach meetings regarding the City of San Jose's Housing Impact Fee Study.  The meetings are scheduled as follows:

Date Location Time
Thursday, October 9, 2014 -- Housing &
Community Development Commission
City Hall, Room 119-120
200 E. Santa Clara Street
San Jose, CA 95113
 5:45 p.m.
Tuesday, October 14, 2014 -- Developer
Stakeholder Meeting
City Hall, Room 120
200 E. Santa Clara Street
San Jose, CA 95113
 10:00 a.m. - 12:00 p.m.
Wednesday, October 15, 2014 --
General Public
Bascom Branch Library
Community Room
1000 S. Bascom Avenue
San Jose, CA 95128
6:30 p.m. - 8:30 p.m.
Monday, October 20, 2014 -- General
Public
City Hall, Room 118 -119
200 E. Santa Clara Street
San Jose, CA 95113
6:30 p.m. - 8:30 p.m.

UPDATE AS OF JULY 23, 2014

The Housing Department is pleased to announce a series of public meetings regarding the City of San Jose's Housing Impact Fee Study.


UPDATE AS OF JULY 8, 2014

Information Memo to the Mayor and City Council with an Update on the Housing Impact Fee Study.

UPDATE AS OF JULY 1, 2014


Revised drafts (both dated June 2014) of the Residential Nexus Analysis and the Supplement to the Residential Nexus Analysis, which includes the Financial Feasibility Analysis - components of the City's study of a Housing Impact Fee - are available for public review.

During the month of August, the Housing Department will be conducting outreach meetings with stakeholders to discuss these latest drafts.  We hope to announce the dates and times of those meetings shortly.

The Department looks forward to the community's critical and constructive response to these two reports.  We will be accepting oral comments at the August stakeholder meetings and at the September 11, 2014 meeting of the Housing and Community Development Commission (HCDC).  We will also be accepting written and e-mail comments through September 11, 2014. After that date, we will be finalizing our recommendations in preparation for City Council action later in the fall.

If you have questions, please contact Tom MacRostie at or by calling 408.975.4449.

UPDATE AS OF APRIL 4, 2014

On March 24, 2014, the Housing Department provided the Mayor and City Council with an Update on the Housing Impact Fee Nexus Study.  As noted in the information memo, staff anticipates that the updated Study will be ready for public review in May 2014.  Prior to returning to City Council, staff will conduct public outreach, engage with stakeholders, and prepare draft recommendations.

If you have any questions on the process, please contact Jacky Morales Ferrand at or call 408.535.3855.


UPDATE AS OF DECEMBER 11, 2013


On June 4, 2013, the Council directed staff to identify a consultant to conduct a Housing Impact Fee Nexus Study to determine the impact that residential development has on the need for affordable housing in San Jose.  Since that time, the consultant has completed a draft nexus study, and the Housing Department has held a series of meetings to discuss the draft and obtain input and suggestions from various stakeholder groups.

Staff originally intended to request the City Council's approval of the draft nexus study at the December 10, 2013, City Council meeting.  However, after discussions with stakeholders, the Housing Department made the decision to continue working with the consultant to ensure that all the concerns that have been raised thus far are considered.  The Department also made the decision to narrow the focus of the study to rental residential development, this time.  This will reduce any potential confusion with the City's Inclusionary Housing Ordinance and allow the City to move forward with a post-Palmer affordable housing program.  The consultant will be updating the draft nexus study to account for the changes just mentioned and will continue to validate the study's data to ensure its comprehensiveness.

Refocusing the study on rental residential development and responding thoughtfully to concerns that have been raised cannot be completed within the time frame needed for the December meeting, so staff has postponed this item until February 2014.  At this time, staff anticipates the updated nexus study to be available early next year.  This delay will enable us to continue to reach out to stakeholders to obtain feedback and work through issues in advance of Council direction.

Should you have any questions, feel free to contact Jacky Morales Ferrand at or call 408.535.3855.


                                                                                                ≠ ≠ ≠


At the March 12, 2013, the Housing Department returned to the City Council to answer questions stemming from the November 13, 2013, Housing Needs and Strategies Study Session.  On June 4, 2013, the San Jose City Council directed the Housing Department to conduct a Housing Impact Fee Nexus Study to determine the impact that residential development has on the need for affordable housing in San Jose and to return to the City Council with recommendations.

On June 12, 2013, the Housing Department issued a Request for Qualifications (RFQ) to identify qualified firms to conduct the Study. Keyser Marston Associates (KMA) was selected as the consultant (proposal) based on its expertise in conducting nexus and feasibility studies. (Agreement between the City of San Jose and KMA)

Prior to starting the Study, the Housing Department and KMA hosted two informational meetings with the development community. The meetings were well attended and the audience members provided fruitful input on the Study's process. After the meeting, the Housing Department and KMA drafted a Nexus Study Work Plan taking into account several comments from the development community.

The public process includes multiple meetings with developers, stakeholders, the public and the City's Housing and Community Development Commission. Please see below for the time, date, and location of future public meetings.

Presentations

Reports
Document Description Release Date
Residential Nexus Analysis This study evaluates the impact that residential development has on the need for affordable housing in San Jose. 11.6.14
Supplement to the Residential Nexus Analysis including Financial Feasibility The purpose of this supplemental report is to provide additional context information and analyses potentially useful for selecting housing impact fee levels appropriate to San Jose. 11.6.14

2014 Housing and Community Development Commission Meetings
Date Location Time
Thursday, September 11, 2014 San Jose City Hall
200 E. Santa Clara Street
San Jose, CA 95113
Wing Rooms 119-120
5:45 p.m. - 8:00 p.m

2014 Community Outreach Meetings
Date Location Time
Tuesday, August 5, 2014
Develop Stakeholder Meeting
(Powerpoint)
San Jose City Hall
200 E. Santa Clara Street
San Jose, CA 95113
Wing Rooms 118-119
10:30 a.m. - 12:30 p.m.
Wednesday, August 13, 2014
General Public
(Powerpoint)
Southside Community Center
5585 Cottle Road
San Jose, CA 95123
6:30 p.m. - 8:30 p.m.
2013 Housing and Community Development Commission Meeting

Date  Location Time
 Thursday, November 14, 2013 San Jose City Hall
200 E. Santa Clara Street
San Jose, CA 95113
Wing Rooms 118-119
 5:45 p.m. - 8:00 p.m
     

2013 Community Outreach Meetings
 Date Location Time
 Tuesday, September 24, 2013 Camden Community Center
3369 Union Avenue
San Jose, CA 95125
 6:30 p.m. - 8:00 p.m.
 Thursday, September 26, 2013 Berryessa Community Center
3050 Berryessa Road
San Jose, CA 95132
 6:30 p.m. - 8:00 p.m.
 Tuesday, October 1, 2013 Southside Community Center
5585 Cottle Road
San Jose, CA 95123
6:30 p.m. - 8:00 p.m.
 Thursday, October 3, 2013 Mayfair Community Center
2039 Kammerer Avenue
San Jose, CA 95118
6:30 p.m. - 8:00 p.m.
 Tuesday, November 5, 2013 Roosevelt Community Center
901 E. Santa Clara Street
San Jose, CA 95116
6:30 p.m. - 8:00 p.m.
     
To receive automatic e-mails on updated information and upcoming meetings regarding the Affordable Housing Impact Fee (AHIF), please sign-up and select "Affordable Housing Impact Fee (AHIF)".
News and Announcements
San José's Affordable Housing Impact Fee - Public Meetings
The Housing Department is hosting two public meetings to obtain input from stakeholders on the feasibility of the Affordable Housing Impact Fee (AHIF) on a variety of development types. Read on...