San Luis Obispo County Municipal Code Ch. 29.01 Purpose

On June 7, 2022, the San Luis Obispo County Board of Supervisors repealed the inclusionary housing provisions of the county's Land Use Ordinance (Title 22 of the County Code, Section 22.12.040) and Coastal Zone Land Use Ordinance (Title 23 of the County Code, Section 23.04.096) to eliminate inclusionary housing in lieu and housing impact fees. As such, all fees established by this Title are eliminated and shall not be applied to or collected from development projects. The provisions of this title shall remain in effect only to the extent they allow the county to allocate and expend affordable housing fund and housing impact fee account balances that existed prior to June 7, 2022, when the inclusionary housing ordinance was repealed.

(a) It is the intent of the County of San Luis Obispo to create an affordable housing fund, in-lieu fee and housing impact fee as permanent and annually renewable sources of revenue to meet, in part, the housing needs of the county's very low, low, moderate income and workforce households. There are households which are income eligible and also possess one or more of the following characteristics: (1) they are burdened by paying more than thirty-five percent of their gross income for housing costs; (2) they live in overcrowded conditions; (3) they live in substandard housing units; (4) they are homeless individuals and families; or (5) they consist of individuals and families with special housing needs such as the elderly, the developmentally disabled, the mentally ill, the physically disabled, single-parent households and large families.

(b) The affordable housing fund will serve as a vehicle for addressing very low, low, moderate income and workforce housing needs through a combination of in-lieu fees, housing impact fees and other funds as provided for in these regulations.

(c) It is the intent of the county to foster a mix of family incomes in projects assisted by the affordable housing fund and to disperse affordable housing projects throughout the county, in accordance with its housing policies and its intent to achieve a balance of incomes in all communities so that no single neighborhood experiences a disproportionate concentration of housing units affordable to very low, low, moderate or workforce households.

(d) It is the purpose and intent of this part to preserve and maintain ownership and rental housing units which are affordable to low, very low, moderate income and workforce households and that are located throughout the county, including federally assisted units and units located in mobile home parks.

(e) It is the further intent of the county to foster and encourage the private sector to join with the public sector and the nonprofit sector to further the goals of this title.

(Ord. No. 3171, § 1, 12-9-08; Ord. No. 3473, § I, 6-7-22)

(a) In order to implement the goals and objectives of the county general plan and housing element, to create a balanced housing stock that offers housing choices affordable for all income groups throughout the county, to mitigate the demand for affordable housing caused by new development projects within the county, and to mitigate the shortage of affordable housing stock created by development of housing that is affordable only to higher income households, it is necessary for the county to establish the affordable housing fund, the in-lieu fee and housing impact fee. The fees are needed to finance affordable housing units for low, very low, moderate income and workforce households. The fees will help to assure that new development projects provide for their fair share of affordable housing.

(b) The board of supervisors finds and determines that:

(1) New development projects cause the need for construction, expansion, or improvement of affordable housing within the County of San Luis Obispo.

(2) Housing market conditions and new development projects have provided a disproportionate quantity of housing units that are not affordable to all income groups. This has created, county-wide, an unbalanced housing stock which lacks an equal share of housing units affordable to very low, low, moderate, workforce and above moderate income households.

(3) Funds for construction, expansion, or improvement of affordable housing are not available to accommodate the needs caused by development projects; which will result in an inadequate supply of affordable housing stock within San Luis Obispo County.

(4) The following studies evaluate the housing market conditions in San Luis Obispo County: 1) San Luis Obispo County Inclusionary Zoning Ordinance Financial Analysis (Vernazza Wolfe Associates: December 21, 2007); 2) Commercial Linkage Fee Nexus Study (Vernazza Wolfe Associates: December 21, 2007); 3) Residential Housing Impact Fee Nexus Study (Vernazza Wolfe Associates: October 2012); 4) Updated Commercial Linkage Fee Nexus Study (Vernazza Wolfe Associates: October 2012); and 5) Affordable Housing Nexus Studies (Keyser Marston: August 2017).

(5) The Inclusionary Zoning Ordinance Financial Analysis evaluates the financial impact of the inclusionary housing ordinance on residential development (Title 22 Section 22.12.080 and Title 23 Section 23.04.096, all of the county code), and establishes an in-lieu fee schedule that will enable residential development projects to provide a fair share of affordable housing units and yet receive a net profit that would meet the minimum expected return anticipated by residential developers.

(6) The Commercial Linkage Fee Nexus Study evaluates and quantifies the demand for affordable housing caused by new commercial and industrial development. The study establishes a reasonable and justifiable housing impact fee schedule that can be imposed on commercial and industrial development projects in order to mitigate the impact to the county's housing stock that is caused by such development projects.

(7) The studies establish a reasonable relationship between the use of the in-lieu and housing impact fees and the type of development projects on which the fees are imposed. The in-lieu fee shall be used to produce affordable housing units and mitigate the actions by residential development that generates a disproportionate share of above moderate income housing in the county. The housing impact fee shall be used to produce affordable housing and mitigate the need for such housing that is generated by the construction of new commercial and industrial projects in the county.

(8) The studies establish a reasonable relationship between the need for affordable housing and the type of development projects on which the in-lieu and housing impact fees are imposed. Residential development in San Luis Obispo County is generating a disproportionate number of dwelling units for above moderate income households, which has created an unmet need for affordable housing. The studies provide an in-lieu fee schedule to be imposed on residential development. The in-lieu fee will be used to produce the needed affordable housing yet still allow residential developers to receive a net profit that meets the minimum expected return anticipated by them. The studies document the number of affordable housing units needed when new commercial and industrial development is built. The studies provide a housing impact fee schedule to be imposed on commercial and industrial development. The housing impact fee schedule provides a reasonable and justified fee amount that matches the cost of producing the affordable housing units needed to serve new commercial and industrial development.

(c) The board of supervisors finds that the public health, safety, peace, morals, prosperity and general welfare will be promoted by the adoption of the affordable housing fund, the in-lieu fee and housing impact fee. These instruments will provide permanent and annually renewable sources of revenue that will be used to fund the construction, expansion, or improvement of affordable housing, the need for which is caused when new development projects create an unbalanced housing stock mat is not affordable to all income groups. In establishing these fees, the board of supervisors finds mat the in-lieu fee and housing impact fee are consistent with the county General Plan/Land Use Ordinance. Pursuant to Government Code Section 65913.2, the board of supervisors has considered the effects of the fees with respect to the county's housing needs as established in the Housing Element of the General Plan/Land Use Ordinance.

(Ord. No. 3171, § 1, 12-9-08; Ord. No. 3384, § 1, 3-12-19)

This Title is adopted under the authority of Title 7, Division 1, Chapter 5 of the California Government Code (Section 66000 et seq.) and Title 5, Division 2, Part 1, Chapter 13.7 of the California Government Code (section 54999 et seq.) and the San Luis Obispo County Code.

(Ord. No. 3171, § 1, 12-9-08)