REDWOOD CITY — Despite resistance from the building industry, the city plans to start charging commercial and residential developers a new fee to raise money for affordable housing projects.
The fee, approved by the City Council on Monday, is expected to generate more than $3 million per year, provided the economy remains strong.
“We’ve got to find another way … to facilitate housing diversity in our city,” said Mayor Jeff Gee, referring to the dissolution of the city’s redevelopment agency, which is credited with helping build over 700 units of affordable housing. “To me, the status quo doesn’t work.”
Opponents including Dennis Martin of the Building Industry Association of the Bay Area warned that the fee “would grind all housing production to a halt.” He suggested pursuing other options, such as passing a regional bond measure and revising local land-use policies.
“This fee would raise the cost of housing here in Redwood City and in San Mateo County,” he said.
Jim Pollard of Classic Communities, which is finishing up an 18-unit housing project in downtown, also argued against the fee. He said building more homes would result in lower prices.
“We recognize the need for more affordable housing,” he said. “We salute your actions as a community to create more housing. But imposing a fee on new housing is based on flawed logic.”
Vice Mayor Rosanne Foust wasn’t convinced.
“I think when it comes to the situation that we’re in right now, the rules are different,” she said. “And if one housing developer decides, ‘you know what, I’m not interested in paying that fee,’ my guess is there are four other housing developers that are going to be behind him.”
Assistant City Manager Aaron Aknin agreed.
“There are definitely people lining up to develop in Redwood City right now,” Aknin told the council.
The fee would apply to commercial projects over 5,000 square feet and residential projects of five or more units. Depending on the type of project, developers would pay $5 to $25 per square foot.
Some on the council said they believed the fees should be used to rehabilitate existing housing.
“I have a feeling that our dollars will go a lot further if we can acquire some substandard property in Redwood City … bring it up to higher standard and work with a nonprofit housing operator … to maintain that at a certain affordability level,” said Councilman Ian Bain.
Developers who agree to build affordable housing or provide land for a project could be exempted from the fee.
“Land ownership is still king,” said Gee.
In the same vein, developers who agree to pay an “area standard wage” would not have to pay as much.
“It puts our people that live here to work,” Gee said. “And, it hopefully provides an incentive to a builder, to a developer, to hire workers and pay them what it costs to live in the area.”
Email Jason Green at jgreen@dailynewsgroup.com or call him at 650-391-1337; follow him at twitter.com/jgreendailynews.
