Chapter 19.36 — COMMERCIAL DEVELOPMENT HOUSING LINKAGE FEE

A. Mitigation of A)ordable Housing Impacts Linked to Nonresidential Development. The purpose of this chapter is to

(1) implement the goals and objectives of the general plan housing element of the city of Petaluma; (2) mitigate the

housing impacts caused by new, changed and expanded nonresidential development in the city of Petaluma; (3)

provide housing aIordable to persons who earn between eighty and one hundred percent of the area median

income. The city council has determined that aIordable housing requirements are needed, has found the

following requirements to be consistent with its general plan and, pursuant to Government Code Section 65913.2,

The Petaluma Municipal Code is current through Ordinance 2916 NCS, passed December 1, 2025.

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has considered the eIects of the fee with respect to the city’s housing needs as established in the city’s housing

element, as amended from time to time pursuant to state law.

(Ord. 2444 NCS §6, 2012.)

A. Need for A)ordable Housing. The city council has found that persons of low and moderate income are

experiencing increasing diHculty in locating and maintaining adequate, safe and sanitary aIordable housing.

B. Housing Needs and Impacts Created by Nonresidential Development. Pursuant to the Sonoma County Workforce

Housing Linkage Fee Study published by Economic and Planning Systems, Inc., in December 2001, the city council

Gnds that the construction or expansion of nonresidential development is a major factor in attracting new

employees to the city of Petaluma and the county of Sonoma. A substantial number of these new employees and

their families seek residence in the city and county and place a greater strain on an already impacted housing

stock. Current and new employees who are unable to Gnd aIordable housing in the jurisdictions in which they

work are forced to commute long distances. This situation adversely aIects their quality of life, consumes limited

energy resources, increases traHc congestion and has a negative impact on air quality. Employers have or will

have problems attracting a labor force because of the shortage of housing aIordable to many workers.

C. Means of Meeting A)ordable Housing Demand. Increasing the production and availability of aIordable housing

is problematic. Prices and rents for aIordable housing remain below the level needed to attract new construction.

At the same time, land costs and rapidly diminishing amounts of land available for development hinder the

provision of aIordable housing units solely through private action. Federal and state housing Gnances and subsidy

programs are not suHcient by themselves to satisfy the aIordable housing needs associated with employment

resulting from nonresidential development. Programs and activities to expand aIordable housing opportunities

can be accomplished through public/private partnership action. It is the purpose of this chapter to establish a

feasible means by which developers of nonresidential development projects assist in (1) increasing the supply of

low- and moderate-income housing and (2) increasing the supply of housing in proximity to employment centers.

D. Imposing Housing Requirement on Developers Whose Projects Create the Need. It is appropriate to impose some

of the cost of the increased burden of providing housing for low- and moderate-income people necessitated by

such development directly upon the sponsors of a development, and indirectly upon the occupiers. The imposition

of a commercial linkage fee requirement is an appropriate means to accomplish the purpose of this chapter. In

calculating the commercial linkage fee requirement, the city council has taken into account other factors in

addition to the simple calculation of contribution. These include impact on construction costs, special factors and

hardships associated with certain types of development, and legal issues.

E. Rational Relationship Between A)ordable Housing Need Created and Fee Requirement. The unit requirements and

housing fees contained in this chapter are designed to create a rational relationship between the amount of

housing need created by the land use and the size of the fee, taking into account the eIect of such fee

requirement on providing aIordable housing opportunities and the economic feasibility of imposing such

requirements.

The Petaluma Municipal Code is current through Ordinance 2916 NCS, passed December 1, 2025.

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(Ord. 2444 NCS §6, 2012.)

As used in this chapter:

"Addition" shall mean adding gross square feet to an existing development project or building subject to this

chapter.

"AIordable housing" shall mean the total cost of monthly housing payments does not exceed thirty percent of

gross household income.

"City manager" shall mean the city manager of the city of Petaluma or his/her designee.

"Director of community development" shall mean the director of community development for the city of

Petaluma, his or her designee, or such person as the city manager may designate.

"Expanded nonresidential development" or "expanded nonresidential development project" shall mean

construction that results in a net increase in the gross square footage of an existing nonresidential space or any

conversion of residential space to nonresidential space.

"Gross square feet" or "gross square footage" shall mean the area included within the surrounding walls of a

nonresidential development. This area does not include enclosed parking for vehicles.

"Low- and moderate-income" shall mean a household with total annual income between eighty percent and one

hundred percent of the area median income, adjusted for family size, and in accordance with the Area Median

Income Schedule as published annually by the U.S. Department of Housing and Urban Development for the Santa

Rosa MSA.

"Nexus Study" shall mean the "Sonoma County Workforce Housing Linkage Fee Study" published by Economic and

Planning Systems, Inc., in December 2001 as may be amended from time to time.

"Nonresidential development" or "development project" for purposes of this chapter shall mean any project

resulting in new or expanded nonresidential gross square footage.

(Ord. 2444 NCS §6, 2012.)

A. Payment of Fees Required. Every person constructing or causing to be constructed within the city

nonresidential development projects and/or expanded nonresidential development projects as deGned in this

chapter shall pay to the city a fee computed as set out in this chapter.

The Petaluma Municipal Code is current through Ordinance 2916 NCS, passed December 1, 2025.

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B. Determination of Land Uses. For the purposes of this chapter, nonresidential land uses shall be divided into

three classiGcations: commercial, retail, and industrial. When necessary, the director of community development

or such other person as may be designated by the city manager shall determine the land use classiGcation that

most accurately describes the nonresidential development, or in the case of mixed use developments, the portion

thereof, for the purposes of determining the fee to be imposed.

C. Computation of Fees. The fee charged shall be established from time to time by resolution of the city council

and adjusted consistent with the provisions of such resolution and this chapter.

D. Adjustment of Fee. The fees speciGed herein shall increase or decrease annually by the same percentage as the

latest "Engineering News Record Construction Cost Index—20 City Average" ("Index") annually increases or

decreases. The adjustment shall be based on a comparison of the most recent Index to the Index in the month of

the adoption of the fee, or the Index used for the prior adjustment of the fee. The Gnance director shall compute

the increase or decrease in such fee. The Grst adjustment shall take place on July 1, 2014, and each following July

1st.

E. Time of Collection. Such fees shall be due and payable prior to issuance of a building permit, or if no permit is

to be issued by the city, at the time a new business license is issued.

(Ord. 2444 NCS §6, 2012.)

A. Fee Credit. A developer of any project subject to the fee requirement of this chapter may apply to receive a

credit against the total amount of fees due, or a portion thereof, if said developer provides aIordable housing

through some other means agreeable to the city of Petaluma.

B. Refund of Fee. If the aIordable housing fee is paid and the building permit is later canceled or voided, or the

permit which triggers the application of the fee fails to vest within the terms of said permit, the director of

community development may, upon written request of the developer, order return of the fee if (1) the fees paid

have not been committed, and (2) work on the private development project has not progressed to a point that

would permit commencement of a new, changed, or expanded use for which a fee would be payable.

(Ord. 2444 NCS §6, 2012.)

A. Use and Disbursement of Monies in the Fund. Monies collected pursuant to this chapter shall be used in

accordance with and in support of activities to implement the city’s adopted housing element, consolidated plan,

and implementation plan. Activities shall be limited to direct expenditures for the development of aIordable

housing as deGned herein or incidental non-capital expenditures related to such projects, including but not limited

to land acquisition, applicable predevelopment costs, construction, rehabilitation, subsidization, counseling or

The Petaluma Municipal Code is current through Ordinance 2916 NCS, passed December 1, 2025.

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assistance to other governmental entities, private organizations or individuals to expand aIordable housing

opportunities to low- and moderate-income households, and ongoing administration and maintenance of the

commercial development housing linkage fee program, including expenditures for the cost of studies, legal costs,

and other costs of administering, maintaining and updating the program. Monies in the fund may be disbursed,

hypothecated, collateralized, or otherwise employed for these purposes from time to time as the city council so

determines is appropriate to accomplish the purposes of the aIordable housing fund. These uses include, but are

not limited to, assistance to housing development corporations, equity participation loans, grants,

predevelopment loan funds, participation leases, loans to develop aIordable housing or other public/private

partnership arrangements. The aIordable housing funds may be expended for the beneGt of both rental and

owner-occupied housing.

B. Accounting of Fees. All fees shall be deposited into a segregated account and all expenditures of funds from

the same shall be documented and available for public inspection during regular business hours.

(Ord. 2444 NCS §6, 2012.)

This fee may be adjusted from time to time, based upon amendments or updates to the Nexus Study, or based on

any other data and analysis which the city council determines to be applicable to the continued establishment of

this fee. (Ord. 2444 NCS §6, 2012.)

The Petaluma Municipal Code is current through Ordinance 2916 NCS, passed December 1, 2025.

Disclaimer: The city clerk’s oHce has the oHcial version of the Petaluma Municipal Code. Users should contact the

city clerk’s oHce for ordinances passed subsequent to the ordinance cited above.

City Website: cityofpetaluma.net

Hosted by General Code.

The Petaluma Municipal Code is current through Ordinance 2916 NCS, passed December 1, 2025.

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