Sacramento County Municipal Code Art. 1 General Provisions

A. Construction of new office, hotel, commercial, research and development, manufacturing, warehouse and other special non-residential buildings or structures (hereinafter referred to as "non-residential construction") in the County of Sacramento has been and continues to be a major factor in attracting new employees to the region. A substantial number of these employees and their families reside or will reside in the County of Sacramento. These new employees and their families create a need for additional housing in the County.

B. Traditionally non-residential construction has benefited from a supply of housing for the new employees available at competitive prices and locations close to the place of employment. However, in recent years the supply of housing has not kept pace with the demand for housing created by these new employees and their families. If this shortage were to grow or continue, employers would have increasing difficulty in locating in or near the County due to problems associated with attracting a labor force. Employees would be unable to find appropriate housing in the area, and accordingly would be forced to commute long distances. This situation would adversely affect their quality of life, consume limited energy resources, increase congestion on already overcrowded highways, and have a negative impact on air quality.

C. The competition for housing is especially acute with respect to low-income households. An identifiable portion of the new employees attracted to the County by new non-residential construction will live in low income households and will therefore compete with present residents for scarce affordable housing units in the County. Increasing the production and availability of low income housing is especially problematic. Prices and rents for housing affordable to households of low income remain below the level needed to attract new construction. Federal and State housing financing and subsidy programs are not sufficient by themselves to satisfy the low income housing requirements associated with this employment.

D. In 1990, the County of Sacramento, in cooperation with the City of Sacramento, created a City/County Housing Finance Task Force to examine housing needs and financial mechanisms to address those needs in the Sacramento area. The report of the Task Force (the "Nexus Report") examined the connection between new non- residential construction and housing needs, with special emphasis on very low income housing needs. The report concluded that a clear nexus can be established between the construction of various commercial and industrial buildings or land use types and the number of very low income employee households that are directly associated with such buildings or uses and will accordingly impact the Sacramento housing market. The report further quantified the share of this need represented by very low income households.

E. In 2020, the County of Sacramento contracted for preparation of a Housing Trust Fund Nexus Analysis and an Analysis, Context, and Recommendations Report (Studies). These studies evaluated conditions as of early 2021. The nexus analysis revealed that an appropriate maximum fee amount for Sacramento County would be in the range of $15.40 to $69.60 for low income housing. The analysis concludes that each additional square foot of non-residential construction contributes to the need for low income housing subsidy in the following amounts: office, $47.60; research and development, $15.40 manufacturing, $38.90; warehouse, $16.40; retail (commercial), $69.60; and hotel, $16.50.

F. It is clear that construction of new office, hotel, commercial, research and development, manufacturing, warehouse and other special non-residential buildings or structures brings in new employees, an estimable percentage of those employees will live in Sacramento County, and that this number yields a certain number of households from which a definable number will be of extremely low, very low and low income. Adjustments may be made to this number of households to take into account household size, and multiple earner households, previously housed employees, etc., to yield the approximate per square foot contribution each new non-residential construction activity contributes to the net new need for housing subsidy.

G. Accordingly, it is appropriate to impose some of the cost of the increased burden of providing housing for low income households necessitated by such construction directly upon the owners of the construction, and indirectly upon the occupiers. The imposition of a housing impact fee is an appropriate means to accomplish this purpose. In calculating the amount of such fee, the Board of Supervisors has taken into account other factors in addition to the simple calculation of contribution to the need for housing subsidy. These include impact of the fee on construction costs, special factors and hardships associated with certain types of development, and legal issues.

H. This chapter carries out provisions of the Sacramento County General Plan. The Housing Element of the County General Plan calls for the provision of housing for all sectors of the population to accommodate the demands of both existing and new residents attracted to the region by increased employment. The Housing Element also provides that the County should make special efforts to encourage an increased supply of housing affordable to low, very low and extremely low income housing households.

I. Various elements of the Sacramento County General Plan, including, but not limited to, the Land Use Element, and the Open Space, Conservation and Resource Management Element require the promotion of in-fill development and the discouragement of urban sprawl in order to preserve agricultural lands, reduce air pollution, minimize commute distances and traffic-related impacts, and avoid undue increases in the cost of urban services. In the absence of sufficient subsidy, low income families would be forced to find housing, if at all, in areas far removed from employment centers, thus increasing urban sprawl and its associated impacts. The creation of a housing fund is designed to reduce this impetus for urban sprawl and its associated impacts.

J. Most land uses in the County clearly fall within one of the six basic use types studied in the Nexus Analysis and are charged a fee accordingly in this ordinance. In a limited number of situations, the fee must be based on a project-by-project determination due to insufficient information as to the general characteristics of that type of use or special attributes of the use which make building size an inappropriate determinator of employee density.

K. It is recognized that it is inappropriate to impose a fee requirement on certain individual new construction because the fee would violate previous development agreements, other quasi-contractual agreements, or is preempted by state law; or because special characteristics of the use otherwise address the needs of the same low income population to which this ordinance is addressed, and such contributions would be adversely affected by the fee; or because it can be determined that the use categorically will have few or no employees.

L. The County-wide housing fee update on new non-residential construction is based upon the Sacramento General Plan, the Sacramento General Plan Environmental Impact Report, the Housing Trust Fund Nexus Analysis and Analysis, Context, and Recommendations Report quantifying the nexus between new non-residential construction and low, very low, and extremely low income housing need. In view of the numerous assumptions and potential inexactitudes which must attend any such studies and recommendations, the Board of Supervisors has determined that the fees and unit requirements will be set well below the calculated cost of providing low, very low and extremely low income housing to persons attracted to the County by these employment opportunities.

(SCC 0801 § 1, 1990; SCC 1686 § 1, 2022; SCC 1748, 1/7/2025)

The provisions of this chapter are the exclusive procedures and rules relating to housing impact fees unless explicitly stated otherwise in another Code Section policy, or regulation. Except as stated in the prior sentence, this chapter shall prevail over any other provisions of the County Code.

(SCC 0801 § 1, 1990; SCC 1748, 1/7/2025)