San Luis Obispo County Municipal Code Ch. 31.03 In-Lieu Fee

The in-lieu fee is hereby established to allow applicants to accrue incentive points by contributing to the Regional Housing Fund, pursuant to Section 22.12.010 of Title 22 (Regional Housing Incentives), based on the number of incentive points granted by the county.

31.03.01 - In-lieu fee amount per incentive point.¶

The initial in-lieu fee shall be thirty thousand dollars per incentive point (within the initial in-lieu fee range of thirty thousand dollars to fifty thousand dollars per incentive point) through June 30, 2026, and shall be annually adjusted within the in-lieu fee range for the following fiscal years in accordance with Section 31.03.02 (Automatic Annual In-Lieu Fee Adjustment). The annually adjusted in-lieu fee shall take effect on July 1 of each fiscal year.

(Ord. 3550, § 2, 10-21-25)

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31.03.02 - Automatic annual in-lieu fee adjustment.¶

The following automatic annual adjustments shall be applied to the in-lieu fee, cumulatively.

A. Annual Inflation Adjustment. An annual adjustment to account for inflationary changes in construction costs shall be applied to the in-lieu fee and in-lieu fee range. The annual inflation adjustment for the in-lieu fee and in-lieu fee range shall be the percentage increase or decrease of the Construction Cost Index, as published by the Engineering News-Record, for the period ending April of the previous fiscal year; meaning the adjustment shall be by the percentage equal to the percentage increase or decrease of the Construction Cost Index between the Construction Cost Index published in April and the corresponding Construction Cost Index for the same period twelve months previous. The adjustment shall be applied to the in-lieu fee and in-lieu fee range beginning on July 1, 2026, and continuing each July 1 thereafter.

B. Annual Adjustment Based on Program Success. The initial in-lieu fee was intentionally set at the bottom of the in-lieu fee range to encourage participation in the program. To balance program success and community benefit, an annual adjustment based on program success shall be applied to the in-lieu fee within the in-lieu fee range. This annual adjustment shall be based on the three-year rolling average of the number of incentive points approved annually (calendar years) by the county, pursuant to Table 1 of this subsection. This adjustment shall be applied to the in-lieu fee beginning on July 1, 2029, and continuing each July 1 thereafter.

Table 1

Three-year rolling average for number of Incentive Points approved annually	Annual adjustment to In-Lieu Fee
15 or more	5% increase
6 to 14	No adjustment
5 or less	5% decrease

(Ord. 3550, § 2, 10-21-25)

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31.03.03 - Assessment, collection, and deposit of fees.¶

The department of planning and building shall assess and collect in-lieu fees pursuant to the provisions of Title 22, Section 22.12.010 (Regional Housing Incentives) and deposit the in-lieu fees into the appropriate accounts of the Regional Housing Fund in accordance with this title, on a quarterly basis.

A. Assessment of In-Lieu Fee. A project subject to ministerial or discretionary approval shall be subject to the in-lieu fee in effect [A] at the time that the first construction or grading permit is applied for or [B] at the time of final map recordation, whichever occurs first.

B. Payment of In-Lieu Fee. The in-lieu fee shall be paid in full [A] prior to issuance of the first construction or grading permit or [B] prior to recordation of the final map, whichever occurs first.

C. Requested Changes to In-Lieu Fee Amount. Changes to the in-lieu fee amount shall only occur when an applicant requests and receives approval of an amended land use entitlement that changes the required number of incentive points for the project. Otherwise, the in-lieu fee shall be paid based on the amount of applied incentive points specified in the original land use entitlement approval.

(Ord. 3550, § 2, 10-21-25)

Exceptions & meaning →